May 06, 2008

How Low Will They Go?

Calculated Risk links a 2005 Orange County Register front page article that highlighted an Orange Country home on its way up the leading price curve (just over $600,000).

oc-housing-1.JPG

In 2008, the house once again represents the larger story in Orange County. CR has a chart that shows what the house value would have been if the price had tracked with inflation instead of a bubble. If the house price falls back to the inflation adjusted value, it would need to fall over 50% (from $603,000 at it's peak to it's early May price of $439,000 to reach the inflation-adjusted price of $239,000).

So how much lower will prices go? The indicators seem to say that they will go a whole lot lower.

Posted by Mary at May 6, 2008 12:50 AM | Economy | Technorati links |
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