50% off of houses already 50% from peak would be 75% off peak. That would put us into mid 80’s to late 80’s nominal pricing. Recall at this time interest rates were 10+% and you could buy a nice home in La Jolla Farms for well under 1 million. I don’t see the government pulling their support out from under the mortgage market until the risk premimum has been severely diminished. I think this will happen when the economy is robust again at which point housing in SD will have stabilized and likely be moving up.
I do agree that the economy is awful and that the bubble has done incredible damage to the short term health of SD real estate. Personally, I could see most housing go to 00-01 nominal prices but not 87-88 nominal prices which are at the extreme end of some of the bearish views on the board.
I recently bought at probably an ’02 price so I full well expect that my house will drop in value before it starts to rise. For me it came down to really wanting a particular neighborhood that is hard to get into at my price point.
