sdr –
Thanks for giving us a boots-on-the-ground perspective. It is very much appreciated.
There are plenty of reasons cited here as to why property values will continue to tank as others have stated. I too expect that prices will decline into 2009, particularly at the higher end. But I believe that your bottoms-up recovery scenario is very likely to happen.
This reminds me of back when I was a first-time homebuyer. It was late 1995 and we were preparing to buy in early 2006. I had just moved to San Diego from the midwest. All the locals were telling me that I was nuts and that house prices will decline forever, or at best flatten out. However, by my calculations buying a house in Clairemont was only slightly more expensive than the 2-BR apartment I was renting. I am glad I relied on a cold-blooded, conservative cost analysis rather than the informed opinion of the wise people who had experienced the previous 4 years of price declines.
The truth is that at the low end (less than 400K) there are plenty of cases where buying a SFH is cheaper than renting after taxes for those who fit standard affordability metrics and who have 20% down.
