Price-busting “foreclosure clusters”

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A couple of quick links: We wrote this guest post today for Blown Morgage, in which we argue that it’s somewhat pointless to predict how much prices will decline in the current slump, because there’s no single accepted method to measure prices, so we’ll be arguing about the price decline long after it’s over.

We also predict that price declines will be uneven and will be most severe in ‘foreclosure clusters’: ‘Think it through: Who’s the natural buyer of a home previously owned by a sub-prime borrower in a neighborhood full of homes that last sold to sub-prime borrowers? The natural buyer is another sub-prime borrower.... Except: That type of loan isn’t available anymore. Sadly, I see a downward spiral of prices in those areas. It’s quite likely some of the single-family housing stock becomes rental housing.’

Another link to ourself: This interview we did with efinance directory, in which we talk about the similarities between the dot-com crash and the current housing slump.

But enough about our thoughts. We’re more interested in yours -- your thoughts, predictions, analysis and commentary.
Photo Credit: L.A. Times