I started a post back in December about how the housing market was still weak. To be clear, it is still weak. It is moderately local, but the overall US housing market is garbage. As always, my main man Ritholtz at The Big Picture cuts through the flim flam with his explanation of why there will be a second leg down in housing. Basically, unemployment is still high, real wages have staganted for a decade, inventory is high, and price-to-rent ratios are still high. Further context for a drop in new home sales and I recommend checking out the first few comments from this blurb on a debate on the state of the housing market.
For those of you in the Bay Area, you all know that market works in an alternate universe than everywhere else. However, a word for some of the married and/or soon-to-be-married young folks I know might be in the market for a domicile in the next 24 months is to be judicious. The market may rebound sooner (and has partially rebounded off the bottom), but keep an eye out for deals and taking advantage of what is fundamentally a buyers market. Have fun.