Industrial News

Each regional expert candidly answered multiple questions about both local and national real estate markets, foreclosures, home sales, mortgage lending, Fed rate changes, and much more. The existence of a U.S. housing bubble and the pressure it has placed on individual markets was also a common topic, and nearly everyone had a different view.

One thing that almost every interviewee could agree on, however, is that the country is currently in the midst of a market correction that is likely to cause home prices to drop dramatically.

Excerpt from Interview with Schahrzad Berkland (CaliforniaHousingForecast.com):
"Prices will fall in half. We'll go back to 1999 prices. It could be worse. Don't be surprised by my statement. Let's just look at what happened in the 1980s and 1990's downturns. It's easy enough to look up at the County Recorder Office, or on the MLS, but neither the County Recorder, nor the realtors, wants to advertise the ugly truth: CA has 15 year housing cycles and prices fall 30 percent to 50 percent in a downturn." (http://efinancedirectory.com/articles/State_of_the_Housing_Market%3A_Update_from_Schahrzad_Berkland.html)

Excerpt from Interview with Mike Shedlock (Mish's Global Economic Trend Analysis):
"It took Japan 18 years to hit bottom. I suspect it will take at least 5 to 7 here and 5 is very optimistic. It could easily take 10 years or more. My best guess is 7 but it all depends on what the Fed does to fight it. Prices will decline most in the bubble areas: California, Florida, Phoenix, Las Vegas, Boston. Some of the rust belt states where masses of jobs were lost will also get hit hard."
(http://efinancedirectory.com/articles/Housing_Bubble_Analysis%3A_Interview_with_Global_Economic_Trend_Analysis_%28Mish%29.html)

Excerpt from Interview with Patrick Killelea (Patrick.net):
"I think it's safe to say that asking prices will keep falling until they get back in line with historical norms, probably 5 years or more. I agree with Scharzad Berkland that a 50 percent fall is entirely within reason, but it seems that 40 percent is more likely since inflation will hide some of the loss." (http://efinancedirectory.com/articles/The_San_Francisco_Bay_Area_Bubble%3A_Interview_with_Patrick_Killelea_%28Patrick.net%29.html)

Excerpt from Interview with Rich Toscano (Professor Piggington's Econo-Almanac for the Landed Poor):
"Assuming that prices decline slowly, that inflation isn't too high, and that there's no government bailout, San Diego prices would have to fall at least 25% to get remotely back in line with fundamentals. They could fall less if inflation raged or the government intervened. They could also fall more if lenders really tightened, rates went up, or the market followed its historical pattern of going from being overpriced to underpriced (not just fairly priced)." (http://efinancedirectory.com/articles/Future_of_the_Southern_California_Housing_Market%3A_Interview_with_Rich_Toscano.html)

Excerpt from Interview with Mark Gregg (Texas Housing Bubble Blog):
"I think a 5 percent decrease across the state [Texas is quite possible with some areas experiencing a decrease closer to 10 percent. These numbers could go even higher depending on how much migration is derailed due to the crash in other parts of the country." (http://efinancedirectory.com/articles/Texas_Housing_Market%3A_Interview_with_Texas_Housing_Bubble_Blog.html)

Excerpt from Interview with Warren Brussee (The Second Great Depression):
"Homes would have to drop an additional 25% to be back at the expected value of homes based on their historical 2.3% yearly increase. And, since homes were being built to satisfy the increased demand of the last few years, there are too many homes for the reduced number of qualified buyers that will be standing after the crash. This makes it likely that homes will fall even MORE than 25%." (http://efinancedirectory.com/articles/The_Second_Great_Depression%3A_Interview_with_Author_Warren_Brussee.html)

Excerpt from Interview with Chicago Bubble Blog:
"In the Chicago area as a whole, I think 10-15% would be a fair adjustment over the next 3-5 years. I think it will be a protracted adjustment with the bottom being sometime early next decade and a period of flat growth for another 3-5 years after that. We might not see any real growth in the area again until 2015-2020." (http://efinancedirectory.com/articles/Chicago%27s_Housing_Crash%3A_Interview_with_ChicagoBubbleBlog.html)

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