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Kevin Drum, an analyst on CBS.com had this to say: 

“Last year I speculated that when the housing bubble burst, prices would decline by 10-20%, with the high end of that range being more likely than the low end. Aside from fellow bubble pessimists, most people at the time thought that seemed pretty ridiculous. But here’s what the LA Times says today:

No one knows how severe the slump will be, but economists and real estate experts interviewed by The Times, and who were willing to make predictions, said prices could fall 15% to 25% before turning back up.

Most said values would continue falling through at least next year, and some thought the market wouldn’t reverse course until 2010.

….Leamer and Thornberg are among the most bearish of analysts, saying the recently ended housing boom pushed prices out of sync with incomes….”Southern California prices will fall 25% from their peak and won’t find their bottom until the end of 2009,” Thornberg said. Leamer also sees a drop-off at the high end of the range — 20% to 25% — and sees the downturn lasting into 2010.

Yuck, yuck, yuck. This is really not going to be pretty.” (http://www.cbsnews.com/stories/2007/11/27/politics/animal/main3541740.shtml)

 With that in mind, it is important to reiterate the importance of bargain shopping. Look for everything you could want in a home and offer what you think could be accepted. (read this article for more details.) It is important to not strap yourself with a mortgage that you cannot afford as more than likely your home will be worth less than what you paid for it if you pay the asking price. From the look of it, this is applying more to higher end homes than the bargain homes. Housing prices are finally expected to meet up with incomes. Now, when will we see sporting events costs decline to meet family incomes?

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