Were the Kuznets Cycle to confirm to past patterns, real median CA house prices will not again return to the '04-'06 levels for another 15-20 yrs., if then given the longer-term demographic profile, normalized lending standards, and likely slower real GDP growth trend (2% vs. 3-3.5%).
Seen another way, nominal SoCal median house prices will not bottom until prices return to the '99-'01 levels, implying another 20-30% avg. decline in prices hereafter; but even then nominal prices will likely not rise more than inflation for many years thereafter.
By the early to mid-'10s, CA mortgagees will have made no money in real terms on their real estate purchases for ~15-30 yrs. (worse when counting home-equity loans).
Cumulative Real Changes Of Southern California Median Home Prices
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0KkhQh6sL-GawmkfkAysrXpykgOdpxKBkkiiQxjodd4oAJNOEG0B224LQseLB2GgJd44UjE0-RFb29z2r5zeQWpDi3MBB50V56SkNBnmc_6c5PnXqR2Z4KiB_YM7ISL9vlaZWHq0vhj6I/s400/so-calprices-bc.png)
click on chart for sharper image
Real Annual Change Of Southern California Median Home Prices
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_0KyZv_RefNN1UTgtqrIn0y7IM8vmjwtBJkEdd5ho08RNl0RWsdTagKUdEezgUZYqAKo1M-e6yuA_YWU7CzBN7WHmuuUUFXGi_eNWspWRwGFhUX8BLB6ljU-FbZ16-MWq_ZdVYpwvYVRO/s400/so-calprices-bc1.png)
click on chart for sharper image
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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