The point we (those of us who think 50% is reasonable) are trying to make is that the numbers out there – rising foreclosures, prices, inventory levels, rents, and incomes – all point to a downward direction.
The last two bubbles saw declines all the way back down to more or less where they started.
I forget how many months of inventory there are currently, but I believes it’s close to a year. Foreclosures in CA are up 400% from 1 yr ago, and even the CA association of Realtors now expects a 9% drop. What does THAT tell you?
There’s simply not enough people making enough money to sustain these prices, so they will fall. I think they will fall past what would be an equilibrium because of how housing moves and how people react.
