Were the Kuznets Cycle to confirm to past patterns, real median CA house prices will not again return to the '04-'06 levels for another 15-20 yrs., if then given the longer-term demographic profile, normalized lending standards, and likely slower real GDP growth trend (2% vs. 3-3.5%).
Seen another way, nominal SoCal median house prices will not bottom until prices return to the '99-'01 levels, implying another 20-30% avg. decline in prices hereafter; but even then nominal prices will likely not rise more than inflation for many years thereafter.
By the early to mid-'10s, CA mortgagees will have made no money in real terms on their real estate purchases for ~15-30 yrs. (worse when counting home-equity loans).
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com