The National Association of Realtors recently reported that contracts signed to buy existing homes dropped down month over month by 11.6%.  This means that the number of homes expected to close..the best predictor of the future health of the real estate market…are showing very dire signs.
Year over Year (April 2010 vs April 2011) pending home sales are down 26.5%. Anyone still need proof that real estate is in a double dip?
The problem is there was never any real recovery in the US economy or the US housing market. Both were boosted by artificial governmental stimulus. The $8,000 Federal housing rebate was nice for many San Diego home buyers. But, if that was their main impetus to purchase a San Diego home last year, they may now be sad to know that the value of their home has subsequently gone down well more that the amount of the tax rebate they received.
httpv://www.youtube.com/watch?v=ElggSbH5flw
I think that the new mortgage reforms could be playing a role in the drop in home sales in San Diego and in other major cities. Many prospective homeowners are not able to meet the stringent income to mortgage payment ratio of 28% and heftier down payments. As a result we will see more renters.