So Cal Real Estate News

“The nation is in the throes of a housing downturn that is shaping up to be the worst in a generation,” according to Harvard’s State of the Nation’s Housing report, released Monday.

“The slump in housing markets has not yet run its full course,” according to Nicolas P. Retsinas, the director of Harvard’s Joint Center for Housing Studies. “Mortgage rates have barely responded to the aggressive easing of the Federal Reserve, the supply of for-sale vacant units continues to grow, and much tighter underwriting is locking many would-be home buyers out of the market.”

This is pretty much old news, but it’s a pretty accurate summary of what’s been going on both nationally and here in Southern California. Looking ahead, Retsinas says, “At some point demand will bounce back. Historically, housing markets recover only after the economy has entered a recession and a combination of falling mortgage interest rates and house prices have improved housing affordability. It is difficult to judge how far away from these conditions we may be.”

We certainly agree with that last statement, as we’ve been saying since last November (see “How low will prices go?“). However, we think the significant drop in Southern California home prices coupled with a moderately strong local economy and lack of overbuilding in the coastal plain may well lead to a recovery beginning in the next 6 to 20 months.

For more details, see Harvard’s press release, for the full report, click HERE.

Remember, real estate is local, and projections for your neighborhood may vary, even if Harvard is correct. To see our latest projections post, check out So Cal home price bottom near?