patrick.net

Very simple. At the end it is all about supply and demand (domestic demand, excluding foreign cash buyers).

Most factors pointing to lower demand:
1. High unemployment rate
2. Rising interest rate
3. Would-be move-up buyers trapped with negative equity
4. High inflation in non-housing items such as energy and food
5. Less sub prime lending; fewer people qualify for mortgage

Most factors pointing to more supply:
1. Retiring baby boomers who need to trade down
2. Foreclosures and short sales; shadow inventory

There is no bottom until supply meets demand. Home prices cannot go up until demand out grows supply, or people's real income after tax after non-housing necessities go up.