With mortgage interest rates edging down and the price of homes a good 30% below their peak in Southern California, Ryan Ratcliff made a decision on the minds of many: He decided to buy a house.
Ratcliff, a University of San Diego economist who makes his living forecasting the housing market, hopes to close escrow next week on a three-bedroom house in a northern San Diego neighborhood known for its good schools.
"I may not have exactly timed the bottom," said Ratcliff, who paid 25% less than what the foreclosed house sold for in 2006, "but I think we're close enough that I'm comfortable."
Slowly, excruciatingly, buyers are beginning to return to the housing market.
Home shoppers report competition for the cheapest foreclosures, and agents say business is picking up.
But is the crisis over?
Far from it, experts and economists say.
Any market recovery "will be long and bumpy," said Leslie Appleton-Young, chief economist of the California Assn. of Realtors. There probably will be false starts -- periods in which home prices flatten or even rise for a month or two, and then fall again.
Many point to the last time the housing bubble burst in the early 1990s, when real estate lost 20% of its value in the first three years but then continued to bleed for four more years before beginning to rise.
Still, there is no denying that activity has picked up in recent weeks and months. In July, the number of homes sold in Southern California was up from the same month a year ago, the first such increase in three years.
Some industry watchers, as a result, are becoming positively boosterish.
"Home prices are about to bottom," cheered Barron's magazine in a recent cover story. Popular business commentator Jim Cramer said much the same thing late last month on his CNBC television show.
But whether the recent activity is a one-time spike driven by fire-sale prices on foreclosed houses or the beginning of a bottom can't be decided in a month.
The rash of foreclosures, for example, may have created an opportunity for a mini-bubble of sorts, in which speculators and others rush in to buy homes that are perceived as very cheap.
But the overall pressures on the economy and the housing market are serious -- and remain very much in place.
A key problem is that despite the crash, prices remain historically high when compared with people's incomes. So even though home prices have come down, people can't afford to buy them. And the exotic mortgage products that made it possible to buy expensive houses in the past are no longer available.
