You are right. That is a very good argument. But to really understand the big picture there are a lot of factors to consider. Human psycology not being the least. Construction costs are dropping actually with the lower costs of lumber etc. Labor costs will go down as more unemployed construction workers take less pay just to have the work. Cities are lowering or limiting the permit costs. All these factors and many other factors of a slowing or crashing economy will contribute to possible lower prices in the future. It may not be “Logical” or make sense but neither did the fake prices on the way up. All I am saying is there is a real possibility of an over shoot on the down side.

Just looking at the straight numbers your argument for a bottom based on the Aguanga house seems to make sense. But the consumer is not always rational and as we have seen sometimes is completely irrational. Markets are driven by greed and fear. Right now fear has the upper hand and I just have a feeling we are in for worse times ahead.

I will also say as I said before, I am guessing. I do not know where the bottom is just as I did not know where the top was. I thought the market was insane in 2003. Look what happened in 04 and 05. So all I am saying is sometimes people do not act rational, in up markets and in falling markets.