Yesterday reader jd asked for an opinion:  Given the way our govt. and financial institutions work, how do you see the next 4 to 5 years going in housing (in San Diego)?

I have a big interest in the future, mostly because I intend to turn over this enterprise to the kids.

The government intervention hasn’t worked much, and I don’t think there is anything left to try – at least anything that will get passed by Congress.  Between them and the banks, they might come up with one more watered-down proposal to grab votes this year, but that should be the end.

We as a society have become numb to the intervention – and now ignore it.  Yes, the low mortgage rates are enticing, but once you see the low inventory and analyze all the other reasons not to buy, the ultra-low rates are a sideshow.  You have to find a house to buy before they serve any benefit.

I think we’re going to see a new phase develop this year around San Diego:

Because the inventory is so tight, recent comparable sales are hard to come by.  All participants will be increasingly reliant on their experience, and have only sketchy data to back it up.  As a result, sone buyers will overpay – or at least so it’ll seem.  But they become the next comp that future buyers, sellers, and agents will try to digest as real or not real.

In some of the hotter neighborhoods, this will lead to a flurry of sales that build to a crescendo – and voila, we’ll see 10% appreciation or so over a six month period.  But it will be short-lived, because the pent-up supply will flood the market, and thwart any momentum.

The end result?

For the next few years we’ll see dramatic swings in pricing – with wild rollercoaster rides up and down.  It will be even more exaggerated by the greedy sellers who won’t be happy with 10% more, they’ll lop another 5% to 10% on top of that, only to be disappointed – though they caused their own demise.

Other things you can count on over the next few years:

1.  Lousy, inaccurate generalized data being spewed forth as reliable truth.

2.  A growing group of uninformed, ill-equipped realtors – which is already the majority.

3.  The big corporate residential real estate companies get out of the business, as agents flock to smaller boutique firms with better commission splits.  The corporate guys have no way to compete, unless they cut mid-and-upper management.

4.  Rampant short-sale fraud that tempers any pricing upswings.

5.  More upstart internet gizmos.

Things we could really use:

1. Either realtor.com revamps and takes charge, Redfin takes over, or a new real estate portal that focuses on what the consumer comes in and crushes all competitors.  This is the big game-changer that would define the future of realtors, and the role we play.

2.  Rules and regulations – or just some uniform guidance on how to handle short sales, multiple offers, exposing a new listing to the market, showings, etc.  Currently it is the wild, wild west.

3.  I think financing availability is fine the way it is, if any new lenders want to take a chance on riskier underwriting, go ahead.  A good indicator to watch – if you see it happening, it’ll bring in more amateur buyers and agents.

4.  Transparency would really benefit from a realtor feedback website, with sales history.

5.  I think the real estate bust and re-defined who everyone looks at housing, but it doesn’t make the future any more certain – probably less.  Those who have learned the most lessons are those likely to stay out of the game, so it’ll be the lesser-schooled who make the market.

What do you think?

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