JJ
You are correct that less inventory is not generally bad for prices. The coming decline is my opinion. In general, I feel it will be due to the eventual shift of inventory from nicer homes being sold by choice to crappy homes being sold under distress. There isnt much distress in my submarket yet but it’s coming. I dont see it really hitting around here until 2010 for better homes. There arent as many Option ARM timebombs floating around here IMO. I beleive there most homes in my area were bought/refinanced at the peak with 5/1 ARM’s which dont reset until 2009 or later. If someone wants to sell but doesnt like the prices, many will hold on or keep it as a rental. 20010 is where I see the real potential for damage around here. Of course, there are alot of things that could happen between now and then which could change my opinions and the outcome. For someone looking seriously around here (North county Coastal) I think you’ll need alot of patience or alot of money for the foreseeable future. Personally, my timeframe for buying investment properties and my retirement home is 5 to 20 years. I’m certainly in no rush, are you?
