It always takes “X” length of time for reality to set in. I told my wife several months ago that I didn’t think that there would be any significant drops in the SFR segment of the San Diego housing market until the end of next summer. My reasoning is that by then, reality will have truly set in and panic will be the next phase. Right now, anyone who doesn’t truly have to sell is not going to significantly drop their price. By the end of next summer, when those who have to sell due to job transfers, job loss, divorce, or loss of income due to illness are going to really start feeling the squeeze. Add to this equation the REO’s that will be at a staggering number………………then, we’ll see some real price cutting in the single family home segment of the market in SoCal. Of course, we already have homes dropping like dead birds in Temecula and other outlying places but these areas were a whole different can of worms in the first place. I don’t think that this whole mess will hit the bottom until late 2011 or well into 2012 at the earliest due to the large amount of inventory that will be on the market and lack of qualified buyers that will be able to qualify for a loan.
Just my two cents.
