No question it was unemployment that drove r/e down in the 90’s. California’s economic downturn was second only to the great depression. While driving to work during the early to mid 90s I recall loaded-up uhauls driving north out of SD because people were leaving due to no jobs. Unemployment was ~ 7.5%. Freeway traffic congestion did not increase during this time. The construction trades moved to Las Vegas.

I noticed a very subtle shift in r/e demand in the summer of 2004.
What happened? Demand equation changed – investors / flippers backed away from the market at that time. Since then the herd late to the market, trade ups and people that had to buy due to job transfers have bought into the market. You are now seeing rising inventory BECAUSE DEMAND HAS BEEN SATISFIED in this cycle.

Up to now sellers have not blinked hoping to obtain top $$ for their house. It’s been estimated that 60% of sellers are just fishing and don’t need to sell though. (SD Realtor pls comment)

What happens next? Will the 60% sellers allow listings to expire thus lowering the inventory? Will the tighter inventory coax sidelined buyers to purchase?