The Union-Tribune’s latest monthly housing data wrapup features a parade of industry types saying that now is the time to buy. A few of them acknowledge the inventory glut, but not a single one happens to note that homes are still far too expensive in comparison to rents and incomes.
This continued overvaluation is the root of the problem with our local housing market, and now that home prices are no longer being artificially supported by speculative enthusiasm and overly loose lending, there’s little reason to expect them to stop falling until they are back in line with the fundamentals. Yet it would seem that we have people lining up to tell the public that it’s a great time to buy a home.
Moving on, let’s take a look at something else being ignored by the housing cheerleaders: the continued sky-high foreclosure rate.