How much longer are houses going to continue to drop in Los Angeles california?

Question

How much longer are houses going to continue to drop in Los Angeles california?

Answer 1

Price will continue to drop for about 18 more months.  Here's why.

Foreclosed homes are beginning (just beginning) to show their ugly face in neighborhoods.   8 foot fences are surrounding the homes to protect them.   Grass is not being cut and swimming pools are growing cesspools.

Soon, city governments and homeowners groups will put pressure on the lenders to reduce their prices to move the homes into the hands of qualified and caring buyers.  Lenders don't want to do that right now because a lower price reduces the value of their large inventory of homes.   But they will be pressured to get the homes to market, lower the price and sell them.

Answer 2

the last housing bust lasted 8 years 1990 - 1998. Today we are hopelessly overbuild with overpriced houses in the USA, besides some hot spots like Seattle or Manhattan.

My guess, prices will stabilize, when enough builders go bankrupt and stop building, maybe in 5 years.

Now builders are feverishly building condos, which will be the next mega bust.

Answer 3

for as long as they continue to get knocked down hope this helps

Answer 4

They will start going up next wednesday at 11:00 am.

Know one knows for sure. It is all a guess.

Answer 5

They'll continue to drop until the tectonic plates reverse.

Answer 6

Hard to say really. My guess is it's going to take some radical measures by the new government post November to revive the real estate market out of its slump.

Answer 7

It's going to take some time longer.  When some banks finally start to fail, then you can expect some movement in the inventory of foreclosed properties and a bottoming of prices.

Right now, some of the troubled So.Cal banks can't keep up with their foreclosed properties.  When they sell properties, those sales provide information that they have to use when calculating their loss provisions.  They don't want to immediately increase their loan loss charges because that will cause several banks to be insolvent (and then out of a job).  They don't want to start cutting deep discounted deals in order to move the properties and stop the bleeding because that would increase the loan losses further.  They are hoping to draw this out for as long as they can, but we know from experience that the bottom will not come until there are some bank failures.  

I understand that there are millions of those option ARMs that are now getting to the point where the full payment kicks in.  I've read that the peak for the issuance of option ARMS was in 2006 and that it takes 2 or 3 years before the borrower can no longer defer making the full payment.  These option ARMS will be upside down and go right into foreclosure.  Unitl that vintage of mortgage issuances passes, there will be more pain.

Answer 8

California?  I dunno.  But U.S.  Here's straight from the horse's mouth:

AP

Bank economists say home prices yet to bottom

Tuesday June 17, 12:59 pm ET

By Marcy Gordon, AP Business Writer  

Bank economists see home prices only halfway through decline, gloom for consumers

WASHINGTON (AP) -- U.S. home prices are only about halfway through their decline and most of the further erosion should occur this year, major bank economists said Tuesday.

The 10 economists, including those from Wells Fargo Bank and JPMorgan Chase & Co., also cited the negative overall tone of the economy, with consumer spending curbed, spiking fuel and food prices, tight credit and relatively high unemployment.