How low will prices go?

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Good morning. The L.A.Times’ Peter Hong explores a favorite topic on this blog -- how low will prices go? The consensus in the story is that prices will fall in the 15% to 25% range, but maybe not that much in higher priced areas. The piece contains a mini-debate that has also been popular here: Will prices eventually weaken in more expensive coastal areas, or are those neighborhoods immune?

‘Southern California home prices have fallen for five straight months, according to data released this month, and are now down 12% from their peak last spring and summer,’ Hong writes.

This sidebar contains a few predictions, including these:
--Michael T. Carney, professor of finance and real estate, Cal Poly Pomona: A decline of at least 15%, bottoming at the end of 2009.
--Delores A. Conway, director, Casden Real Estate Economics Forecast, USC: A decline of 5% to 10% in areas of L.A. and Orange counties where housing supply is tight; 5% to 15% in other parts of those counties; and 10% to 20% in the Inland Empire. ‘The downturn will not be as severe in some areas. It really depends on the sub-market,’ she says.
--Edward E. Leamer, director, UCLA Anderson Forecast: A drop of 20% to 25%, bottoming in 2009 or 2010. ‘It will get back to normal when people buy a home to live in, not invest in,’ Leamer says.

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