We need to let this mess (self-inflicted) settle down and get people back to a more rationale and conservative fiscal lifestyle.

I expect another 2 years of pain…

We humans are funny in that we don’t like to moderate often from our position once we believe we are right; I think all people, and blog writers for sure, have that flaw to one extent or another.

While the housing market is slow to play out the mortgage market has been pure carnage with over $2 trillion is wealth erased in the last month alone in terms of losses associated with the ills in the mortgage market.

Thanks for the thoughtful and well reasoned comments.

Again, there is definitely a debate to be had, but that’s not what I’m even talking about… that said, it’s important to note that 2 and 3 years before this inevitable slowdown, some alarmists were shouting about a bubble bursting, and all that time it never happened. Now there has been a slowdown that (so far) hasn’t been catastrophic. That’s not to say it won’t be, but I can’t count the experts that predicted the “crash” to happen years ago, and the numbers continued to defy them… the years of a surge in the face of conventional wisdom only makes it all the more necessary that we need a significant slowdown.

Chicken Littles usually incorrectly worry about events unlikely to happen. The sites mentioned above are actually closer to reality than many of the other media sources out there. And are far more accurate about reality than say the NAR.

So if we use the original fable as a guide than they are not chicken littles because to say so would mean that they are wrong or misguided which I think the last 8 months has borne out otherwise.

One can debate on whether or not there will be a necessary and manageable correction or a painfully severe one, but to pretend these sites aren’t chicken little sites is insane because that is exactly what they are, whether you feel their attitudes are justified or not.

Thanks for your comment. You are right; many people once they form an opinion are loathe to give it up. It is human nature to “stick to your guns” and I believe everyone (including yours truly) is guilty of it to some degree or another.

I agree that some kind of correction is necessary, and correction can’t occur with out some being left out in the cold (which is unfortunate). While I think 5-10% is a bit mild I do think 30% may be a bit strong. So put me somewhere in the 15-25% range nationally.

In California we’ve seen some significant declines already in the 20% range in parts of the inland empire and San Diego counties; so while I think a slow-down nationally is to be expected there will be pockets of severity – especially in over-blown markets.

Morgan

Kidding. I’d just go to Canada. At least there my tax money gets me some free doctor visits. Ha!

Anyway, I think the reason those people get called chicken littles isn’t so much that they think prices will drop, but rather, the vehemence with which they believe it. As in, they often seem as though they really wouldn’t be satisfied with anything less than a 30% or more drop. I foolishly tried to have a reasonable discussion (well, reasonable right up to the point when I started wanting to poke out my own eyeballs and it started coming across in my comments) about this with some bubble-people on RCG and even when I said that I thought that a 5 to 10% drop was possible in Seattle, I still got shouted down. Then I decided it was a waste of time to try to have the conversation when it was apparent no one wanted to hear any viewpoint but their own. I actually disagreed with them less than they thought, they just didn’t want to hear it.

I like the OFHEO chart though…if I had to guess how things are going to go down, I’d guess it would look something like that. It makes a lot of sense, and it really isn’t that dire of a prediction…what, a couple of off years, and soft recovery within a couple of years? That is not the stuff of which economic collapses are made. It’s going to be hard on some people that have gotten in over their heads and have to sell or refinance in the next couple of years, but the majority will be okay. The only people who seem like they might really suffer are the bubble-people since they will still be pissed if we don’t reset to 1990 pricing.