Most folks would just as well let California break off from the rest of the country in a nasty earthquake and just drift away. My friends on the East Coast always ask me if I've met any intelligent life out here since I moved out. I just think “winter,” and wonder why intelligent life lives elsewhere?
But facts are facts. According the October 21, 2008 Los Angeles Times (yes, it is actually a very good newspaper… even has words ‘n stuff): “The median Southern California home sale price was $308,500 in September, down 7% from August and 33% from a year ago, according to real estate research firm MDA DataQuick.”
Nevada and California were hurt the worst, particularly at the lower-end of the housing market, the entry-level home most susceptible to gullible subprime mortgage pitches. The big homes in the best locations rippled a bit, but the real loss is “down below,” particularly in the outlying counties like Riverside and San Bernardino . Yeah, I know, I'm hearing East Coast laughter.
Many Southern California experts, including the prestigious UCLA Anderson Forecast, see the real estate floor at least into if not at the end of the second quarter next year. Many feel there’s another 9% left to fall, but there’s where the pessimism stops. Some experts believe that then prices are expected to level off, if not begin a very slow climb back up.
Why does this matter to the rest of the country? Because the markets that fall the most, particularly in formerly hot markets (meaning, that’s where people want to live), are the leading indicators of a bottom and the beginning of a slow recovery in the housing market. California and Nevada fell first, fell hardest, and thus created the best real estate bargains in the U.S. So guess what, freezing-cold-in-the-winter fans, California' s going to be turning around before the rest of the nation. Pause in East Coast laughter (I hope).
But we really do need to stop job loss (real estate needs job growth to support real estate lending), and we need a government that doesn't offer just country club solutions to the mega-corporations at the top of the food chain and ignore the folks in the unemployment line, but if you've been reading my blogs, that message cannot have escaped your attention.
Believing in a future, investing in a future, needs a few guideposts along the way. Maybe there'll be few more people coming out to California in the next few years. Whatever the result, as California real estate goes, so goes the nation!
I’m Peter Dekom, and I approve this message.
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