A lot of the commentary out there suggests at least two things that I see dragging prices down even further regardless of rates, inventory levels, or how how strict lending standards are:
– job losses: likely to shoot up further
– down payments: up to 20% now required
If someone is in a recession-proof job and sitting on $200k to drop into a house then they’ll be okay, but that brings up another issue: buyer sentiment.
I think most people believe all the experts who claim prices will turn-around in 2009. Once that idea fades, particularly in the post-bubble areas they’ll likely wait it out longer.
We’re 2 years into the correction of a 10-year run-up that when it should have ended in 2002 went absolutely insane the next 4 years.
The 30% drop so far may be half way, but expect declines to slow and then stay flat for some time.