Yoski

Housing Prices Expected to Bottom in 2010, 21% Off '06 Highs

Fairly optimistic assesment. Suppose inflation is 3.5%, median price in 2000 was $100K. 1.035^10=1.4. So inflation adjusted we're looking at about $140K in 2010. Given a peak of 226K we're looking at 140/226=0.62 or about a 38% decline. Since wages are not increasing any faster than inflation there's nothing to support higher home values. Especially in light of tightening lending standards even a 38% decline seems somewhat optimistic. Of course it could all drag on for several more years in which case inflation would take a bigger bite out of nominal declines. We might not see a bottom until 2012 or later.
As for the argument "the population is increasing faster than the supply of homes", certainly not here in Miami. Tens of thousands of condos and homes are sitting empty, rents are falling. Builders have clearly proven they able to outbuild any population increase anywhere in the country.