7% is an unrealistic high average gain for housing. I’d guess that the extraordinary gains of 2000-2005 have distorted your average.
Second item, a 3% monthly loss would be absolutely devastating, that’s a 30% annual loss. Which is abolutely unprecedented. In previous downtowns, the revision to mean typically as zero to 4% loss during which inflation over-run the price driving the “real” price down.
We’re in uncharted territory. Real estate has not seen nominal losses in double digits, that are obvious to everybody. When the median starts to buckle and the median starts reporting 5% below last year, people will worry. When it goes month after month reporting 5% or more annual loss, people will really worry. If, and that’s a big if, annual median lost starts to show the kinds of dramatic price cutting that is showing up in CV, and the median shows 10% or more annual losses, buyers and investors will flee.
Simple question for all of use on the board, we may say will buy, but what will be our trigger? If the market enters freefall, what will you buy with? Is your money parked in cash? Will the local encomony belly up on the loss of RE jobs?
