If you look at past cycles, once prices reverted to the mean they continued downward and over-corrected. There’s no reason not to expect that this time.

To that historical trend we can add the fact that we are only now starting to see conditions that can cause a decline in a normal cycle, i.e. recession, job losses, consumer fear.

We’re still in the bargaining stage. It’s now accepted that prices will fall even as much as 25%, but the general consensus is for a turn-around by the end of ’08. We heard the same thing a year ago.

Prices have no chance of bottoming out as long as inventories and foreclosures are on the rise.