Will Prices Really Fall?

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Lou Barnes, whose weekly column we enjoy at Inman News, writes this week that housing prices will not fall sharply: ‘Housing in the Bubble Zones is still sliding, inventory accumulating, foreclosures rising, all likely to continue for years. Those ignorant of housing propose resolution by sellers cutting prices, but it doesn’t work that way: overextended prices stay flat until purchasing power accumulates to support them. The farther the boom pushed prices beyond purchasing power, the longer it takes. This time, years and years.’

So Lou sees a very long period of flattish prices in LA, because this market was clearly pushed well beyond purchasing power.

That said, we’d like to hear your thoughts on what will happen with prices, and we’d like you to be specific. That is, if you believe prices will fall by 10%, do you mean median prices of existing homes sold? Or do you have in mind some other metric (adjusted for inflation, etc.)? And over what period of time?

You can include in your answer, if you care to, how much you believe prices have already fallen, if you believe that’s the case.

We anticipate your thoughts on this one.
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