SOUTHLAND HOME PRICES MAY BE DECLINING, BUT DON'T LET THAT DISSUADE YOU FROM TAKING ACTION

Most economists agree that this year will be better than last year.  But everything this year already seems better.  Restaurants are crowded again; the expensive luxury line hotels experienced a huge surge in 2011.  Theme parks are crowded, and the malls packed once again.  This doesn't necessarily mean everything is rosy.  California's "shadow inventory" has been estimated as low as 5 months and as high as 11 months.  This bodes much better for us than many other states, and certainly other states with even the same "shadow" number, will take much longer to climb out from under because they don't have the volume of transactions or growing populations that we enjoy.  Who is still underwater in a negative equity situation?  A lot of people.  According to KCM Blog, 11.1 million homes are under water, or approximately 22.8% as of 4th quarter last year.  That number increased from the 3rd quarter which was 10.7 million homes and 22%.  Before you panic, this only makes common sense.  If prices are going down, then people are losing equity.  But not all these people are trying to sell, nor should they.  And perhaps, in closing, one should reflect on an important aspect of home ownership, namely, where we live and how we live.  It's great that for many people, housing prices appreciate and it becomes their greatest investment.  But not everyone can live on a coast or in an urban center where there is demand.  Yet despite that, home ownership remains the American Dream, and home ownership first flourished on farms and rural areas, and appreciation was slow, if it was there at all.  No, back in the day, you created the haven where you rested, relaxed, and were sheltered from the storm.  You made your payments and at the end of your working life, you had paid off your home and now could sell it or pass it on to your kids.  Perhaps we all need to remember, houses were never meant for a stock certificate mentality...buy and short hold, then sell. It may be time to return to the true meaning behind the housing market -- a place to call your own, build equity, and eventually, actually own.  See you next month.