SD Realtor, here is the reasoning behind my prognostication:
1. I see steep price drop highly correlated with the amount of foreclosure homes in the market (as banks always cut price relentlessly). We have a spike in foreclosure activities in earlier this year, that is when we see 3%+ price drop each month in SD real estate price.
2. In May-June, we reached a psychological threshold of 30% price drop from the peak, as a result, we see a lot of “investors” jump in but I believe at the same time we should be seeing people walking away from their houses since they are under water so much.
3. It takes 5 months for homeowner to stop payment and the NOD are being filed against them, then 1-4 months for the house to go into foreclosure pool. That is why I think toward the end of the year, we will see 3%+ price drop every single month all over again.