5year you have to analyze your own situation and your needs and then apply the macro perspective to see how much it will affect you.
SDEngineer brought up an extremely important point that you should apply to your own search. Are you looking to live in an area that has already experienced a 40-50% decline from the peak or an area that is only off 20%? Are you looking for a long term residence or is there a chance of another relocation in a few years? Are you a 4S Ranch/CV/LCV guy or are you a Mira Mesa or East County guy? Answering some of those questions can help you figure out how far down the depreciation cycle the areas you are focussed on have fallen.
As far as the policy that Geitner has put in place I think it is way to early to pass judgement. However nobody has seemed to acknowledge that this is a VERY effective vehicle for lenders to offload all the turds they have on the books. Make no mistake, this DOES NOT HELP ME OR YOU. This helps the lenders AND it helps the private investors who will purchase this crap and then sell it, keep it, rent it out or whatever. Furthermore these investors have virtually NO RISK in these private purchases. This MAY very much help to mitigate the upcoming tsunami that everyone has been crowing about.
We will see.
What concerns me more is not the domestic issues. Left on our own these problems do not seem insurmountable. If you are a true bear in hopes for large depreciation chunks then you are rooting with every once of hope for China to pull the plug on treasuries which while probable in the long term, is highly improbable in the short term. Thus with rates pushed to these absurd levels, and a government that WANTS YOU TO BUY, will help keep demand up.
Peter brought up absolute certainties with regards to unemployment. Yet I think we would all agree that we are pretty darn well up that unemployment hill. Will it go up another 2%? 3%? 5%? I don’t know but at some point it will rain money and people will be digging holes and getting paid well for it. At about that same time inflation will kick in and who knows what will happen.
Sorry for not giving you a direct answer. To be very honest… I just do not know. It just keeps getting more bizarre every day. Maybe at the very very very least let this spring rally get over with. I still maintain we are not even close to a bottom in many of the better areas.
