What’s driving the existing market is the same thing that caused the bubble in the first place: GREED! There are too many morons in SoCal who don’t take the time to truly educate themselves about what’s going on before spending ridiculous amounts of money on a house. They have convinced themselves that buying a home in SoCal is the road to wealth accumulation. Many of these people are the same people who will shop twenty car dealers (who sell the same brand) in order to drive down the price and save $200 when they buy a new car. They are convinced that if they don’t buy a house, NOW, that the price will magically shoot back up to late 2005 prices.
If you could get these morons out of the housing market and housing sales dropped another 50% +, then prices would fall almost immediately to 1997 pricing. Of course, if unemployment in CA hits 15% (which would be a real 20% due to the way the government now counts the unemployment figures), you’re likely to also see 1997 prices because at that point, housing sales will drop drastically…………………unless the fools in the White House and Congress decide that they will print even more money and announce that they’re going to pay the mortgage for everyone in the nation for ten years if they will buy a home immediately.
