I have been hearing in the mainstream media (this week) that mid 2008 should be the bottom of the market – but that could just be NAR marketing disguised as news.
One thing that has to be considered is population growth, which in Southern California still seems explosive.
I think the 2008 prediction is based on the lower number of foreclosures forecast (by some, Ex.: Jerry Siegel) in 2008.
I agree with a previous poster – downturns on average last around 36 months or so (based on what I have read).
My personal time line:
End of 2006: Start seeing weakness in the market
2007: Prices decline significantly
2008: Repeat of 2007
2009: Repeat of 2008
Sometime during 2010 prices stabilize
Total Price Decline: I would say around 30% from the peak on average.
So, if you had a house that was worth 400k at the peak, I would look for that same house to decline to ~280k.
Following that, I would look for an average of 3% in year-over-year appreciation.
