Murray, the period of decline will be long. We are still just beyond the tipping point. The crazy, easy mortgages that created the bubble will also doom it to collapse. The overuse of margin was a significant cause of the stock market crash of 1929. The housing market will find an equilibrium point. If you believe that current prices are justified, then SD prices (as related to affordability) before the bubble must then be considered too low. The weather is the same that it was four years ago. People lived here then for the same reasons they live here now. There is a new element, however. More and more people are leaving because the cost benefit of the nice weather no longer tilts in favor of SD. Further, people in SoCal are way over leveraged. Something has to give.
