I think you meant “pre-bubble” prices. I also think it depends on how you qualify “pre-bubble”. I would quality “pre-bubble” as pricing that was perhaps above the long term trendline but still within the standard deviation of +25% or so. Under that definition, we’d only need a 30% or 35% correction in most areas to get there. That’s still a massive correction and it would still hurt a lot of people – some badly enough that they wouldn’t recover.
If you define “pre-bubble” as anything over the trendline then we are talking about corrections of up to 60% or more. If you’re talking about rolling prices back to 1994 then those prices were undervalued relative to the long term trend.
Of course, these numbers apply to SD County. I think a couple markets might be in for a little worse than what we get, but most markets won’t be hurt as badly because most markets are not as overextended. Some markets are not significantly overextended at all – they’ll only suffer to the extent the indirect damage reaches them.
