A number of you have asked me when I think housing prices will bottom. The short answer is: I have no idea, but most smart people I have asked think it will be 2010 before housing prices stop falling.
Here is a realistic view from Irvine Housing Blog that suggests that in least in the Los Angeles market, it will likely be 2011 before we reach a bottom based on historical S&P/Case-Shiller forecasts.
In any event, there appears to be a lot more pain for individual homeowners left to come. Hopefully some of the liquidity pumped into the system over the last few weeks will help to dampen the blow in the form of more reasonable renegotiations and restructuring with individual homeowners who are facing the prospect of foreclosure.
It seems like it is in the banks’ collective self-interest to reduce the excess supply of housing as the wave of adjustments in a wide variety of exotic mortgages continues to play out.