Speculations about housing market bottom

May 20, 10:09 AMReal Estate Marketing ExaminerSpencer Rascoff

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Where's the bottom to the housing market? When will the bottom come? These are the media's favorite questions to ask, and you can't blame them. However, these questions are only relative to where you live because the only thing that matters is when local home prices -- homes at the neighborhood level -- will turn around. So, it doesn't matter if home values in San Diego have reached a bottom when yours haven't.

Frankly, I feel that we're still about a year away from a national bottom in home prices (fall 2011) and then we're likely to see an L-shaped recovery (i.e., values will stay flat for at least 2 years before starting to turn up). But, here's an interesting housing market poll by Reuters.

My colleague at Zillow, Stan Humphries, writes that as a bottom begins to be realized, a flood of shadow inventory will hit the market, further delaying a full-on recovery.

If there is a shred of optimism in all of this, it's the opportunity for those who couldn't afford to buy before. Mortgage rates are at historic lows and home values have dropped 14.2% nationwide. Homebuilders' sentiment is improving for the second straight month, saying  these are the best home-buying conditions in a lifetime.