Call me näive, ignorant or just plain dumb, but I honestly think prices will drop an average of at least 10% annually for the next 4-5 years. I think the end of ’07 will be the start of a major decline that will cause people to no longer view housing a short term viable investment. Maybe in 2-3 years the decline will slow, but I think it will pick up again after that, until we are at 2002-2003 levels.
Prices in many areas have doubled, and some have tripled. Nothing will sustain that, except of course incomes tripling. When I see houses in absolute ghetto outskirts of LA asking $500k, I know something is wrong.
I can’t even guess about the stock market, and I think that says it. I think housing will continue to hurt it, but I think people will again look to it as an alternative to RE investing, as the RE speculators take their money out of homes. People are emotional short term.
