[quote=sdrealtor]Eventually as the middle and up reach stability (a few years from now) we will have affordable entry level homes and homeowners (not homebdebters) that have been in them for several years and now have substantial equity in them. When these folks decide to move up they will have the means to and voila!!! Back in balance.[/quote]
sdr – thanks for the insight. I’m wondering if the people buying are downsizing. During the bubble a lot of middle class families upgraded. On the way down are they downgrading back to something they can afford?
What you say makes sense, but I tend to think first we will see several years of slower declines, and then a few years of no appreciation (5-7yrs). I wouldn’t expect prices to be higher than they are today for at least 5 years. Though SD may be further ahead in that cycle than my area.
Don’t forget the renters. People who have no equity still need to be able to afford to buy for prices to rise again. With tighter lending standards, rising unemployment, and falling wages that may be a while.
