aggregate prices will fall 10% or so from their highs this year and another 5%-10% or so in 2007. then in 2008 and 2009 we’ll see two mid-single digit declines, such that prices will hit bottom around 2010 at about 30% below the peak. then we’ll have two years or so of stagnation – not much movement in either direction. we’ll see late-2005 prices again in ten years or thereabouts. the only reason that i don’t think prices will fall further is there’s a lot of money on the sidelines waiting for disaster, which may end up limiting the downside, which by all rights should be a 40%+ decline. also, the fed will pull out all the stops to prevent an outright disaster… as they always do. it isn’t just the american consumer that believes in “buy now, pay later.” our politicians and the fed (oh, that’s redundant) believe the same thing.
