Economics, shmeconomics: In this real estate run-up, prices were largely driven by a herd mentality. The herd rushed to buy, prices went up. Then the herd paused--and started bitching for the prices to come down. So while experts can give their opinions on when the bottom is coming, no one can really tap the psychology of people buying and selling, according to today's Los Angeles Times. Nevertheless, let's see what these experts predict. Oddly, not one expert opines to the Times that perhaps this is it, that home ownership in America going forward will be more like European model, out of reach for a good portion of middle-income and lower-income families. But let's see what these experts do say:
---"Given how fast prices are falling now, we could see the prices adjusted by the end of the year." Dean Baker, co-director at the Center for Economic and Policy Research. Believes prices have to fall 40 percent to reach pre-bubble levels.
--"I see absolutely no signs of a bottoming, either nationally or in the regions." Patrick Newport, economic forecasting tracker.
--"We didn't get here quickly. There were years of excesses." Treasury Secretary Henry M. Paulson Jr. Believes "crisis likely to last into next year."
--"Because the prices are going down so fast, we'll be hitting the stabilization point sooner. Lawrence Yun, chief economist at the National Assn. of Realtors. Believes we have another 10 percent or more price fall.
--"Do you want a slow bleed? Wouldn't it be nice to just get it over with? It might be that that's what we're seeing." Housing economist Thomas Lawler.
---"The housing correction is still going to be with us this time next year. Celia Chen, housing economist with Moody's Economy.com. Believes "we're halfway there" and that prices have to fall another 10-12 percent.
· Steep drop in home prices may help economy [LA Times]