I don’t think that “reasonable” has anything to do with pricing. Like the upswing before it, this downswing isn’t going to unwind based on “reason”, but based on immediate supply and demand. Reason is an external unit of measurement of the pricing, not an integral part of it.
If a potential buyer doesn’t at least try to time the market a little bit they run the risk of paying way too much for a property and tying up too many assets in the process. I’m not talking about being greedy or getting it down to the last penny, but just keeping an eye on the supply of listings vs. the rate of sales.
Prices are adjusting right now because we have way too much inventory relative to the current pace of sales. The prices won’t stabilize until that inventory is burned off.
I don’t think there’s any point in establishing a target because on the one hand the trend might not ever converge with your target, and on the other hand the trend might end up racing way beyond it. Whether you buy when the amount of inventory and rate of sales achieves some semblance of balance is going to be dependent on your ability to swing the deal, not on whether the deal itself is reasonable.
