An extremely interesting statistic also comes to light in this today's Union Tribune article; "Most of the California loans that went into default last quarter were originated between January 2005 and February 2006, DataQuick reported. " Readers of the blog will recognize this time period as the most likely to be underwater. The market has clearly moved back to pre-2005 prices. I expect that we'll start to see a trend of more properties purchased in 2003 listed below purchase price.
I know a lot of people are hopeful that the downturn is over however I just don't see it happening in the short term. Affordability is still very low and the risk of buying overpriced property is very apparent to regular people on the streets. Prices need to continue to correct to a point where the disparity between buying and renting returns to pre-2002 levels.