Shiloh

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    • Thu Apr 10th 16:23 PM | Rating: 0 0
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      How Far Will House Prices Fall? Implications From the Latest WSJ Survey
      I thought fundamentally, home price is supposed to be 3x income. When it goes higher, other discretionary spending goes down. Then there are helocs..to finance other consumption --those are going to dry up after this credit mess. So either we have to return to fundamental ratios or one or another sector is not going to get paid. The middle class...is the backbone of capitalism, tax revenue, etc.

      San Diego is having a price collapse in middle and low income neighborhoods and there is no major industry there to prop up prices -- where are all the 100K jobs? SD is overbuilt and there are plenty of bank-owned properties sitting, whilst they sit and deteriorate.

      Common sense would indicate that prices have much further to fall.
      But the historical graphs could indicate that the drop will continue through 2011 --stay flat for an additional 4 years.
      It is possible from graphs that prices could fall back to 1998.

      Keeping in mind that <b>wages</b&g... relative to prices have been stagnant. Now - we are in a so-called "deepening recession."

      I think it all adds up to a major market correction and neighborhood blight.
      View article »
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