bob007, home prices in the long run will be determined by one set of factors, but they can be blown off course by different factors over shorter horizons, like the next 2-10 years, for example.
I tend to think that long-term prices will be determined by how well Southern California can use its natural and cultural resources to compete for top-notch mobile global talent, and by the growth of that talent.
But in the next 2-10 years, any long-term trend could be dominated by an old-fashioned, more local, supply-demand cycle. And if a credit crunch is going to drive us into a downturn for the next few years, then these last few weeks at least contained some important milestones. Whether any of those is a unique tipping point, I don’t know. A concerted private-public bail-out could change everything, but that may or may not happen.
