One of the big reasons for the current state of our real estate market has been declining affordability. With home values outgrowing income almost three-to-one from 1992 to 2005, it should come as no surprise that it was unsustainable. While people often refer to our current market as a ‘down’ market because of declining values, perhaps a more accurate description would be a ‘correcting’ market.
The silver lining of the current ‘down’ market is the ‘up’ side in terms of affordability. Housing affordability for March 2008 shot up to the highest figure in a long time!