Contra Costa Vacancy

I showed you the rise of the Rental Vacancy Rate from the low of around 8% in 1998 to above 10% in 2004. In a historic prospective, however, 8% was actually a high vacancy rate. Chart above shows that the rental vacancy rate was above 8% in 1965/1966, in the beginning of the Vietnam War. But, as this vacancy rate declined below 8% in the subsequent years, the median home price experienced its largest gains from 1968 to 1988. The median price of a single family home in California rose from $23,210 to $168,200, a total increase of 624% or 31.2% per annum. My concern here is that, rather than moving down, the vacancy rate is now rising to a historic high of around 10%. If history serves as a good learning lesson, where would the housing market go from here???