Now that sanity has returned to the lending business for home mortgages, housing prices will eventually drop to where median income translates to median house prices. It’s that way in most parts of the country and I think it will happen in SoCal. I’m not trying to gore anyone’s ox but to me, it’s just common sense. Buyers have to be able to get a loan to buy a home and to do that, they must qualify by meeting income, debt and credit history requirements to buy a home that equates to their income. The only thing that threw this fundamental out the window and allowed prices to escalate into crazydoom was the lowering of borrowing criterion to anyone who could fog a mirror, claim that they made $150k+ per year and sign their “X” where it said “buyer”. It was absolute lunacy and now that it’s gone bye-bye, there are too many homes on the market and the inventory will continue to grow until median income equates to median price.
(Alex Angel. are you paying attention?)
p.s…….There are a bunch of homes in the Sacramento area (geographically much closer to SoCal than Florida) that are REO’s and that were built within the last four years. They are being offered at 50% less than they sold for when new which has driven the property values down the tube. If it can happen in Sacramento, Ft. Lauderdale, Miami, Fort Myers and Tampa. not to mention Baltimore and the Inland Empire of Los Angeles…………..it can happen in San Diego.
