The blog Calculated Risk that has built its reputation on good calls for real estate and the housing market had yesterday as title: The Housing Bottom is Here (http://www.calculatedriskblog.com/2012/02/housing-bottom-is-here.html).
Calculated Risk has become the best blog for US macro data, with especially the real estate market elaborated.
That is why it is very encouraging that they say with some conviction that around March 2012 the nominal house prices in the US will set the bottom (in real terms that can last longer).
First we have seen the bottom in housing starts, the sales of new houses and the top in the inventories. After some time the bottom in the prices arrives.
What do they give as reasons for the bottom?
1. The price to rent ratio is low enough (certainly versus the low interest rates)
2. the real house prices are low enough
3. the inventories of unsold houses is now low enough to make a rise of prices possible
4. you will see help from politics to soften the payment problems/ help for refinancing at the current low mortgage rates.
I liked the argument of affordability as PragCap mentioned. Affordability has tremendously improved. The average buyer commits itself to a burden of $ 931 per month and that is in rea terms 66.1% below the top of 2006 and 58% below the previous bubble top of 1989.
The decline of the house prices in the past year occurred only for foreclosed properties, the voluntary sold houses rose already in value.