BlueDome

What the Homebuilders Are Telling Us

Real estate is local. Prices are based on affordability and a premium for desirability.

Places where average prices were 10 times average household incomes (california for one), the real estate will continue to fall at least until they reach whatever premium these places deserve as nice places to live. But in places where prices never went out of sight, they won't fall much either.

That assumes constant interest rates. If rates go up, prices will fall everywhere because it decreases affordability.