BobS
There will not be a “bounce back”. History shows that housing and building cycles are a lot longer than economic cycles. The latter have averaged 3 – 6 years peak-to-peak (or trough-to-trough) since WWII. Housing cycles more like 10 – 12 years. Public sentiment propels the housing cycle, and it takes longer to turn around, and is not always correlated with the state of the economy.
Consider: CA housing prices had their big run-ups toward the end of the 1970’s, then the 1980’s, and then the 1990’s, with the last one lasting longer and being more powerful than normal.
If you believe that the strength of this downswing is rooted in and dependent upon the excesses of the previous upswing, then this decline will be all the more powerful. Accordingly, crowd behavior should lean heavily against real estate investing once we bottom out a long time from now.
