Business Week: Prices could fall another 25%

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Must reading from Business Week’s Peter Coy, who writes that the housing crisis is likely to get much worse. ‘Brace yourself: Home prices could sink an additional 25% over the next two or three years, returning values to their 2000 levels in inflation-adjusted terms.’

More: ‘While a 25% decline is unprecedented in modern times, some economists are beginning to talk about it. ‘We now see potential for another 25% to 30% downside over the next two years,’ says David A. Rosenberg, North American economist for Merrill Lynch, who until recently had expected a much smaller slide.’

Still more: ‘Shocking though it might seem, a decline of 25% from here would merely reverse the market’s spectacular appreciation during the boom.’

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