I think that the possibility of real estate dropping 50% is too frightening for most people to handle. I personally don’t think it’ll be all that bad because it’s a 50% drop from the PEAK. 300k median for San Diego is not the end of the world. Many homeowners will be in trouble but overall we’ll be just fine and the world will still go ’round. I think that all properties will drop in equal percentages; the difference will be the timing.

As with any bad news, human psychology prevents us from fully dealing with the signs of a coming crash. We only want deal with with the bad news in increments as it occurs.

For example, with Iraq, now that we’re in there, we want to succeed. Questioning the initial decision to invade strikes many as counter productive because it doesn’t solve the current problem. Considering that we may “loose” this war is like capitulating and unpatriotic to some. Better hope for the best.

I think that human nature is such that we want to dream about pie-in-the-sky but don’t really want to face the hard reality. Life is more pleasant is you have a better tomorrow to look forward to. Looking forward to a bleaker future is against our survival instincts.

I think that Powayseller comes across as “strong.” But I admire her courage in expressing her views. It’s always courageous to go against the trend. As I’ve said before, someone who predicts pie-in-the-sky is lauded for being visionary and bold. But someone who predicts a depression is attacked from every angle and is berated to show “facts” and “proof.”

Predictions are based on assumptions. Predicting Dow 30,000 is not anymore “factual” than predicting Dow 3,000.

I beleive that Powayseller will be vindicated in time.

Powayseller, please don’t stop your posts. We need more like you to keep us in balance. We should have all types of opinions. It’s up to the reader to make up his own mind. I look forward to reading your blog when it’s ready.

For more circumspect opinions, we can just listen to our policy makers. They have a stake in keeping the market stable. Even if a policy maker thought that RE would fall 50%, he could never say so because his statement would cause a panic.