I agree, Rt. 66. In the mid and higher end areas, prices for homes are still too high. There is virtually no move up market, since most of the sales in the lower end are foreclosures, not someone who wants to sell and move up. And those that do want to sell and move up are facing a huge gap between the lower and mid level areas.
I keep hearing that low interest rates are a good reason to buy, but I don’t necessarily agree. If interest rates go up, the selling price of the home will have to fall. I’d rather buy a home for a lower selling price, with a lower property tax assessment, and a higher interest rate paying more interest (a better tax advantage). I can always refinance later on if rates fall.
But you hit the nail on the head when describing the macro economic conditions we are facing, and will be facing over the next several years, especially here in California. A massive number of people losing jobs, or fearful of losing jobs, does not lead to an improving real estate market. Wages are not going up, and have been stagnant for years. It keeps coming back to affordability. Without the magic loans we had during the boom, which allowed unqualified buyers to pay artificially inflated prices for homes, and now with people having to prove they are qualified, and have down payments, I don’t see how (real) home prices don’t keep falling.
