Bottom Line

Existing Home Sales: Trying To Make A Bottom

Now that all the smoke and mirrors have gone, there are very few "creative ways" to buy a home you can't really afford. We won't have a bottom or even be close to it until home prices reach historical norms when it comes to pricing.

Housing isn't a great investment historically, normally you can expect slightly above inflation returns on that investment, not 10,20 or 30% a year.

Case-Shiller Index says we've lost around 10% in "value", so if houses appreciated around 50% from 2002/2003 we still have to come back another 10-15% at least. But I think we'll overshoot things on the downside around 2009/10.

It's funny that people still neglect the affordability issue in searching for a bottom.