I don’t think the median price/sqft will decline by 50% peak to trough here in SD in nominal terms. I think we’re down about 11%-12% now (after almost two years) and I’ve been saying for some time that a 35%ish decline is possible. But I may be too bearish on that prediction. Now, clearly, there will be plenty of individual properties that do decline by 50% and more, but that’s not the “market,” those are anecdotes.

Recall that the government will help (however little) to put a floor on the decline by way of cockamamie bailout schemes and the Fed will fire up the inflation furnaces. In addition, you’ll see plenty of money enter the market once we start seeing larger price declines. Despite its issues, SD is still widely considered one of the more desirable places to live in the U.S.

Clearly, a 50% drop in the median p/sqft isn’t impossible. But it seems HIGHLY unlikely even under the most bearish interpretation of the data. Although I’d welcome it, I just don’t see it happening. Just my two cents.