I believe Bugs once posted something about, ‘3-4% declines per quarter’ is reasonable. Effectively these losses add up to about a 10-12% decrease per year.
That would be 12-16% per year. Prices are going to drop, and while I think 20-40% on individual homes is possible, you’ll never see that kind of drop on the sale statistics.
In all actuality, I’ll be completely happy taking 10-12% drops annually. I’ll be estatic once the typical measures and media start reporting that home values really are down 10-15%. When that happens, the herd will realize the gravy train is over. They’re getting a whif of it now with the inability to reappraise and refinance, but once they get it in their face that like for like homes are really down 10%+ and that homes in general are down, the final psychology will dramatically shift.
