The 990K in Summer 05 was a number pulled out of thin air with no analysis or support. The market peaked in most areas by the end of 2004 not in the Summer of 2005. It was an assumption that was completely invalid. It was chosen because it fit in with the “I want to beleive prices are down 10% across the baoard already” stance of the author not because of anything that was researched.
As for the price paid being the only one that matters that simply is not true. In most areas there is a fair market value as determined by prevailing previous sales. I have seen homes sell way more than they should because an out of area agent comes in and does not understand a specific local market. When it happens everyone in the neighborhood say “can you beleive that person paid $XXXX”! Invariably the next sale is back in line and the unfortunate owners are the comp everyone uses to refinance. It’s kind of like lightening striking once and as we know lightening never strikes twice…….
