Home buyers in Southern California, Preparing for the rebound?

Are you waiting for signs the time is right? I can tell you that I'm constantly on the lookout for signs that will help me conjure the foresight to know when to buy. I could act as a walking, talking Zillow service for my local zip code.

Frankly, I don't care (as much) if home prices stabilize or if we're looking down the barrel of another 36 months of declining prices, so long as I know which happens to be the course. I am not a physic and frankly I don't invest much in others crystal balls either, but I can tell you that if you watch the basics you should be fine. I listed a few things that I've applied that might help you out in your search too.

The largest US lender, Countrywide, CEO Angelo Mozilo says his gut is telling him that housing will remain sluggish through the rest of this year, next year, and begin to "head in the right direction" in 2009. believes the decline will last until late 2008, and not to expect a rebound before then.

So, here's what I think you can do. Research - and guess what - a little more research. A few metrics I'm using as guiding principles:

1. Home inventory. This is the supply. How long would the homes on market take to sell at the rate they're selling? A good indication of oversupply is 9+ months, an under supply is less than 90 days.
2. Watch the days on market. This is the demand. How long is it taking the average home to sell? Is this decreasing?
   
   ...And then watch a couple things that require a bit more research and gut feeling.
3. Ask, what do the experts think? A good resource for this is RealtyTimes.com.
4. Watch for whether sellers are acting desperate. Keeping an eye on the homes for sale in your area, and through the sale, can be the best way to measure this.

Now, perhaps a bit overdue, here's a bit of background on my situation. My wife and I have been looking for a place to live for about a year. It's hard to look and not take things very seriously, for a couple reasons. First, today's market conditions are more encouraging for home buyers, more so anyway than at any point in the past few years. Considering that we need a place to call home, it feels like we're looking at brand name merchandise on the discount rack. The obvious problem is we don't know how long the store will keep it on the rack. Second, the analytical side of me is telling saying all this window-shopping we're doing is really just research, and I don't have enough data to make a decision. The fact is, I'll never have enough data to not feel a little uncomfortable entering into such a large purchase.

We're looking for a place to call home, and while we do own a house, the reality is that we aren't your traditional homeowner. Reason is, we can't live in the house that we do own and while we rent a decent two-bedroom condo, and it's just the two of us living in it, we're looking for more to call the home we can live in for the next 5+ years.

We have a few things working for us. There's some equity in the house in Arizona which should help leverage a purchase here in California. Second, we have a little saved away, stable jobs, decent income, and our credit is pretty good. I think the last inquiry on the FICA scale registered around 750. With lenders clamping up on their requirements this may still be, just enough.