Will Home Prices Bottom Out In Late 2009?

Source: NYT

According to the New York Times, they are reporting falling home prices through late 2009. “The No. 1 thing that drives housing values is incomes.” States Todd Sinai, professor of real estate at the Wharton School at the University of Pennsylvania.

First, here in California we will be lucky if it’s 2009 when we see the bottom. I think we are looking 2010 or 2011, until we hit bottom. This is supported by the last California housing boom and bust of the 1990’s.

“In a previous boom, home prices peaked in the Los Angeles area in 1990 but did not hit bottom until 1996. Prices remained near that low for more than a year before starting to climb again.”
Second, the fact that home values are now based on incomes is shocking. By not using income as the measure if a person can afford a home, is what caused the housing bubble and collapse.

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