Housing bubble right now? California and nationwide

[Dani Sung]

I have some real estate holdings in Southern California and so I tend to watch the market pretty closely. According to http://www.car.org/marketdata/data/haitraditional/HAISoCal/, the affordability has drastically decreased in the last 2 years and it's a downward trend. Some of the properties have increased by 10% in price in a mere 3 months. What do people think about that? housing bubble? Time to sell?

[David Dachtera]

@Dani Sung,

What you're seeing with rising values right now is purely the product of supply-and-demand.

In the crash, some 80% of home builder went under. The demand for housing, however, was not changed and it continued to grow as it does today.

There simply isn't enough housing to meet the demand right now. Housing starts are still way behind the demand. Rentals are being gobbled up as fast as they go vacant.

Keep perspective and stay vigilant. There may be another economic event coming, who knows? Mis-reading the current signs, however, could be disasterous.