I am constantly questioning others here who believe a big price drop (>30%) is in the bag. Nevertheless, I have seen very recent prices on a few properties that truly surprised me. For the last 5 or more years, there wasn’t any such thing as a property with no major problems being offered for more than 20% less than all the others. Now we’re seeing one or two of those in several places at once, and it seems it’s becoming more common very quickly. We know it’s just a sprinkling in the better areas now, and it’s anecdotal.
So do the standard broad price measures show double-digit price drops? Not yet, but it does seem more likely than before. If it happens, it’ll be at the low end first, where inability to pay for loans is most severe. Mortgage investors are beginning to realize repayment of the loan with full interest is a problem, and one no one else will fully take care of for them. A spreading from there to more expensive or desirable markets is not assured, but it makes the higher end markets more vulnerable, and we’ll just have to see how that plays out in 2008 and later.
I don’t see stbh as a troll. His mixture of conviction and evidence is not all that different from many others here, if in a different direction. While we are looking to provide mutual emotional and other support for our position that prices will drop a lot, we should also be challenging group-think, and stbh and others can help serve that purpose.