Ahem….SD realtor:
“For the record, I think prices will return to 2003 levels and then settle there for a few years.”
When you take into account that the majority of recent homebuyers (past 2 – 3 years) are ARMed, then prices returning to their 2003 values will wipe a lot of them out. They will most certainly be squeezed even harder if prices stay flat. Even if prices stay flat, inflation will eat away at any equity gains so that is not a good scenario either. The logic of home prices returning to their 2003 prices is somewhat circular. If homes were overpriced in 2003 then they will still be overpriced in 2006 or 2007.
Nope, this thing is coming down hard and fast. Remember, “It’s different this time!!”
