Mr Pasadena

Housing in a Death Spiral, Taking the Mortgage Industry with It

It will be at least 5 - 10 years before housing prices start moving up again. I'm looking at homes in prime California areas like Pasadena, Arcadia, San Gabriel, etc. These areas still falling in prices, slowly. Pasadena is already down over 25% from 2006 prices. I know, I own a house next to two that is down that much. But Arcadia and San Gabriel has gone down much less. Historically, these three areas mirror each other in prices appreciation and decline but Arcadia is only down about 10% and San Gabriel about 15%. I expect Arcadia and San Gabriel will go down further and Pasadena stabilize. Be realistic, how many people can afford a home in the $700-$800K range with their current family income. Unless income catches up, there is no chance prices will go up anytime soon. What did I hear? Unemployment is at 10.5% in California and 11% in Los Angeles County. In the long run, I think prices will eventually move back up. That is why I'm not selling and will be leaving my house to my daughter. When she grows up, past it to her children (my grandchildren), and they can sell it at the 2006 price.