No big price drops for Southern California real estate?

As home buyers retreat and wait on the sidelines for the Southern California real estate market to crash, some sellers are taking action. According to the LATimes, many home sellers are taking their homes off the market, rather than reducing their home sale prices. Many other sellers are still leaving their homes on the market, but refusing to drop their price. If these sellers can't sell without a hefty price reduction, they are ready to stay put. Consequently, the number of homes available in all the Southland real estate markets is dropping, even though home sales are also dropping.

Since the economy is strong and the job market remains steady, many home sellers are in no rush. Unlike the last downturn in the So Cal real estate market, there are only a small amount of foreclosures occurring. As a result, even though home sales are declining, home prices are still sheltered, as long as the economy remains strong.

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Los Angeles real estate prices stabilizing?

In recent months many home buyers have pulled out of the real estate market, deciding to wait for a few months to see what happens. To be sure, more homes have hit the market followed by some price depreciation, however, is the big price correction still to follow?

Realestatejournal.com points out that while real estate data has shown declines in recent months, many real estate reports, such as one by Harvard, point out that declines of 5% are extremely rare and require severe overbuilding and massive job loss - neither of which have occurred in the Los Angeles area. Consequently, predicting the real estate market is like predicting the stock market - it's almost impossible to predict.

Then, last Friday, Allen Greenspan noted that the "worst may be over" for the real estate market (more).

Consequently, if the job market in the Los Angeles area stays strong and mortgage rates stay at their current levels, or even drop, real estate prices might just stabilize. Sure home values might not appreciate much, but they won't depreciate much either, until something causes the next real estate boom or bust.

Again, predicting that is almost impossible.

Los Angeles real estate to depreciate 4.8% by 2008?

The housing bubble. Is there a real estate bubble? Will there be a soft landing or will home prices crash? No one really knows and different surveys and experts claim different things. Still, according to a study by Moody's Economy.com, Los Angeles real estate is expected to depreciate by 4.8% over the next year and a half, bottoming out in April of 2008. (more)