<p>The vast majority of homeowners–not speculators, bought them well before 2005 and have not plans of selling now into the slump. Also much of the slumping prices are in the fringe suburbs far from the CBD. Homes in desirable close-in neighborhoods have been far less impacted–even in towns where prices are down significantly. The gas prices will make this even more important. So if LA is down 15% overall, Santa Monica might be off only 5% as they never could overbuild new homes there. Regional averages are not very good indicators of housing markets in large cities.
The excess inventory in most cities will be gone in a year or so and then prices will resume a slow steady climb as we come out of the slowdown loaded with BO optimism about change.</p>
<p>I guess I’m one who actually likes driving a nice newer car and going on nice vacations, eating at nice restaurants, etc. Money is for spending and enjoying. So is life.</p>