California Housing Prices: Fall, Baby, Fall?

Following the California Association of Realtors' predictions, the New York Times take a broad look at the housing crisis, but also focuses on California's problems. Notably: The Times states we're nowhere near bottom (prices will fall all the way till "late 2009"). But if jumbo loan-lending and our fat inventory of foreclosures are making prices fall faster in California, according to Times, there's an upside (well, for some) to a fast plummet. Via the Times: "While those declines have been painful to homeowners in those cities, economists said the quick decline might help the markets reach bottom faster than in previous housing cycles, said Edward E. Leamer, an economist at the University of California, Los Angeles. In a previous boom, home prices peaked in the Los Angeles area in 1990 but did not hit bottom until 1996. Prices remained near that low for more than a year before starting to climb again. 'In some areas of California, we are really at appropriate levels,' Leamer said. But he added: “The risk is that we are going to get some overshooting, meaning that prices will be lower than they ought to be."
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