That is why a drop to 2003 prices is not enough. 2003 prices were created on the back of teaser interest rates that have gone the way of the pumpkin. Until they return, there is no way that buyers can pay 2003 prices. That is the main reason I disagree with sdrealtor about a return to 2003 pricing. Pricing has to go down to a level where buyers can purchase a first time home paying no more than 40% of income with the current mortgage rates.
Prices going back to 2003 levels and pricing going to a level where buyers can afford a traditional mortgage at 40% of income are not necessarily mutually exclusive.
