Delores A. Conway, director for the Casden Real Estate Economics Forecast with the University of Southern CA, recently attended a PCBC conference for annual builders. She presented a forecast of what is to expected with our economic and housing future. According to Conway, prices have gone down almost 30% in the last 2 years. She particularly highlighted upon the sharp declines in CA areas like Sacramento and San Bernardino.

She also noted how in the past similar declines were common in CA, but took place during a much longer duration. For example, there was a prior 20% drop in region of Los Angeles, but it occurred over a 6 year stretch.

While the price decline is bad for those who those who are selling or want to hang on to their home, it can be both a positive and a negative indicator from the aspect of buying.

Buyers can see the price decline as a bad sign, as they could lose their investment if they buy the home and the price keeps going down. This also tends to keep big homes on the market longer. Banks are tighter to loan money, buyers are scared to get big loans, and it is very very hard to get loans for homes that are over the $1 million mark.

The flip side on all of the bad news, is that some low interest rates are starting to kick in, which can help with monthly payments and put some buyers at ease. Conway reported that in Riverside County, home payments have dropped almost 33-38%. Condway did note that the process to jump start the market in Riverside has been 2 years in the making and that finally offers are starting to be made on more of their foreclosure properties. She feels that it could take another 12-24 months to really see a big change there.