Southern California home prices in “overshoot”

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When housing market cycles head downhill, they often keep going past the point where prices are at their historical average level compared to incomes. We’re likely at that point or past it now in Southern California, according to different studies reported in today’s Times. That doesn’t necessarily mean we’ve hit bottom. History shows when a market overshoots the long term price/income ratio it can keep going down for some time.

--Peter Y. Hong