THE SHIP APPEARS TO BE TURNING, OR HOUSE PRICES TO FALL OVER NEXT SIX MONTHS

Well, both are true. October 31st, CNN Money reported: "Home prices headed for triple dip." Fiserv (a financial analytics company), has predicted a 3.6% fall in prices on a national basis by next summer. Now remember, southern California is a very different place than Las Vegas or Florida. But still, nationally it means that the Case-Shiller Home Price Index is going to fall to 35% below its peak in 2006. But what Ken Johnson, Ph.D. (Florida International University and Editor of the Journal of Housing Research) points out, is that the dip depends on circumstances being in place to lessen the impact that market anxiety causes. What circumstances? According to Johnson they are sometimes referred to as "housing affordability measures, and some of them are: 1) Price of income to the house 2) mortgage payment to income 3) buy versus rent analysis for various markets that encourage buying. Did you know that the payments to income ratios are at a 30-year low in all 50 states? Why haven't the local papers reported that? The downturn in prices will bring more affordability factors into play for more people, especially the Gen Xers and Gen Yers, which is where the pent up demand is going to come from in the first place.

Also of interest locally to southern California is the best prognosis for recovery you can have: skilled labor, desirable location, and economic resiliency.