Does anybody else find it amazing how entrenched the “RE prices do not Fall” meme is with the general public? It’s almost like magical thinking on a very large scale. I run across this all the time, I feel like I am talking to people that have been hypnotized by the NAR.
Scruffy, Sales are down a whole bunch, I mean unit sales are falling below the worst levels of the last downturn in the early 90’s as I have shown using the San Fernando Valley as an example. Now to address your argument; at the peak of the current market people and economist were saying that actual home sales would not fall that much unless unemployment returned to the 90s levels or worse. As long as people have jobs they will continue to buy houses, Yet we are looking at sales transactions plummet across the entire state of California. So, yes home sales can fall with the current rate of unemployment, in fact they can fall further than anytime in this states history. Now go out on a limb with me here. If actual home sales can fall with the current rate of employment then wouldn’t it be possible that home prices can fall with the current rate of employment. I know it’s a stretch. I mean i had to agonize over this but i figured that home sales signifies demand in relation to price and supply and much to my surprise the conclusion that i came up with is that unless demand increases, like if we all win lotto at the same time, then something will have to happen to price. Maybe you can help me with my thinking here.
