The chief executives of a major home builder and the country’s leading mortgage lender offered bleak assessments Monday of their industries and the economy, saying falling home prices would force more homeowners into foreclosure.

Housing prices in California could fall 10% to 15% in the next 18 months, said CEO Jeffrey Mezger of Los Angeles-based KB Home, who appeared on a panel at a Milken Institute conference about California’s economic prospects.

The other members of the panel agreed that prices would fall, a trend that one panelist — Angelo Mozilo, chief executive of home-loan giant Countrywide Financial Corp. — said would drive foreclosures to record levels for the entire mortgage industry.

Timing RE is an art, not a science. I agree with Bayfamily that being a little bit late in entering the market is in fact a good strategy because

1) usually the new trend in RE will by sticky, often lasts 5 years and longer.
2) most of the gain is realized at the latter portion of the cycle than the early portion, by being 1 year late is not going to hurt your return that much.
3) Being a little late may ensure that you not get caught into a false trend.

The following exchange took place on Craigslist - the investment banker’s response is a classic!

Original Post

What am I doing wrong?

Okay, I’m tired of beating around the bush. I’m a beautiful (spectacularly beautiful) 25 year old girl. I’m articulate and classy. I’m not from New York. I’m looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don’t think I’m overreaching at all.

It will be data-heavy week with numerous important releases throughout the next couple days. The market’s focus now is on the FOMC meeting on Wednesday with a pricing in more than 25bp cut However, today’s BBG head line news indicates the Fed remains cautious in signaling a more aggressive monetary easing, even though recently there are more evidence of economic slowdown in the US has emerged.

Thought on Bay area housing future
I believe you live in Bay area where it’s very different from other regions of the country. Bay area has been fortunate because of the Silicon Valley effect. It probably never had a bad few years of price drop. Every body has been lulled into thinking that the price will continue to go up forever. I don’t blame that. In fact, price has been going up for the last 10 years at average annual rate of 8.9% according to OFHE. Whereas DC area only rise at the rate of 7%. That 1.9% extra growth rate has made Bay area the most expensive region outside of Manhattan.