I agree with most of your rebutal. But this time even in SoCal you had a massive hit in the fast growing inland empire where prices bottomed by early 2009 while the coastal diverse economy and high end held up much better. So yeah maybe in a couple of years just like Florida we will have had most all the shadow inventory cleared out and ready for a new cycle inland. Not so sure about the coast though. I am prepared for this to drag another five plus years as the other places catch up to us as the worst case..
The Inland Empire always gets hit worse than the coast. Its the least desirable part of the metro area.......mostly desert. You should have seen it in 1992......Palmdale was called a ghost town. People were leaving in droves. I can't tell you how scary it was. You could not sell a house anywhere in the LA metro area no matter how cheaply you priced it. I wanted to leave LA in 1994-95......I was not able to sell my house until 1997.....and I wasn't underwater at all.
In 1995, someone I knew took a flyer on a 2 bdr view condo along the coast in Santa Monica. He bought it for $200K..........I was the agent. All through escrow, he kept calling me asking if he was crazy. All his friends told him to back out. He ended up closing. Today, that condo is worth over a million......in this market.
CA will recover faster than FLA just because it has had 30+ years of experience dealing with bubbles. With housing bubbles, you have to remember they are not building any more land........esp desirable land. What goes down will come back up....usually pretty fast once the worst is over and people regain their confidence.
In the NY area I am seeing and hearing of the enormous pressures of families, some related to me, up there in the big expensive 'boom' cities .. Too many in our age range and a bit younger bought into their dream home at very high prices, two new SUV's in the driveway and a decade plus of debt slavery. Now even they are way upside down like the ground zero markets as prices finally fell back to 2002 levels at best only it took them 2-3 years longer to get there so in essence with a weak job market even there and pressure in the public sector on job cuts, plus RE taxes are so high they are squeezed on all angles.. I also watch home prices and boy have they fallen from the subprime minority hoods in NJ like Patterson and Plainview to high end McManions in the exhurb to gritty blue collar commutable to Manhattan three family homes in Queens and Brooklyn the past couple of years.
You know........if you live in a bubble city......NYC, LA, SF, Miami, Seattle, DC, Boston etc............you are going to get bigger price swings than if you live in a Pittsburgh, Albany, Rochester, Cleveland, Chicago, Kansas City, Spokane etc. This notion that housing will keep appreciating year in and year out doesn't apply when you live in a bubble city. However, Pittsburgh, Rochester, Albany, Kansas City have all seen price appreciation in the last two years.
Unfortunately, most Americans still do not understand the nature of housing bubbles. This last go around is the first time most Americans have experienced a housing bubble. They don't understand the positives and the negatives that come with the territory. When a housing bubble pops, people need to start reciting the poem, If, by Rudyard Kipling.
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