Where is the inventory going to come from? I don’t see where.

-It’s not going to come from a flood of REO’s, the “next wave” that was always “just around the corner” never happened and was an urban myth
-Not going to come from builders, they can’t build that fast
-Not going to come from normal sellers, still not enough equity
-I don’t see a sudden rush of short sales, anyone who wanted to short sale has had ample chance the last few years

…so I think inventory will be tight all of next year. That plus low rates and healthy buyer demand: boomerang buyers coming back into the market who had short sales or foreclosures 3 years ago, plus household formation, plus investors, etc… will drive prices up again next year. Prices went up about 15% in San Diego in 2012, they should do that again at least in 2013. Wow 30% rise in 2 years? Who was predicting that in 2011????

And as we know well this is mostly artificial based on the Fed keeping rates low & all the stuff they did to stop foreclosures from happening. People don’t realize how low rates are, we literally have not seen rates this low since the 1800’s! But artificial or not, prices are still going to go up.

It’s disappointing they have to blow another bubble of CA prices once again with these rates instead of just letting the market correct once and for all to it’s natural level with normal rates.