I agree deadzone, I think that not only will prices go down to pre-2000 levels, I think they will go down to affordability. The baby boomers are selling, and there is too much pressure to the downside. The downward pressure (people that have to sell, retire, die) and the huge unfinished inventory will keep pushing down the resale market.
Buyers were only in the market because as sick as the prices are, they weren’t worried about price deflation. Realtors controlled all the data and the media. This is changing very rapidly. As prices keep slipping the Zillow’s, Trulia’s, and Redfin’s will keep adding tools and data. Folks are getting pissed that they can’t see actual selling data until way after the fact (months) if at all.
The buyers (like me) will sit on the sidelines as long as prices are even within 50% of where they are now as long as prices keep falling. Most people will not buy a generally overpriced asset if it doesn’t seem like it has an upside potential. Add to that the real estate commission and you have a poor deal unless the prices are going up. With falling prices comes loss of equity and inability to get out. Then the economy starts sucking wind like a pump without water.
This cycle will keep going down, there is no real stimulus which can prevent it.
