I was predicting a SFR median price reduction of %25 – %30 some time in late 2005. We are already past that, and I believe we are entering the “holy shit” phase where the nicer ‘hoods take a dive.(Certainly, the credit and stock markets just went through their “holy shit” phase.)

So I guess I have to change my prediction of where the bottom will be, though not when.

Still looking to late 2011 on timing.

What may happen now is the vanilla median stops dropping as those houses priced near the current median start to stabilize and the pain train cruises into the higher end.

Analytically speaking, when houses that are priced higher or lower than the median have their price lowered but houses priced near the median don’t change, the median actually doesn’t change. We saw the median hold steady as the bottom end fell out of the market, then we saw the median really drop when houses priced around the medan lose their value. Next, the median will again stabilize though the pain is far from over. It’s a characteristic of the median.

Median price per sq. ft and Case-Shiller, though, will show the pain to some extent.

I feel like Japan 15 years ago. We may hit bottom in 2011 but we may not leave the bottom until 2017.