Here's the thing, I think that report if skewed... Let me explain.

The price drop they are reporting:
1) Has already taken place. What I mean is, sellers have already dropped their asking prices 20%-25%. But since there are many sellers and few buyers, there haven't been enough transactions to post the changes.

For example.
A $500,000 home two years ago is now for sale for $400,000. That means the price has already dropped 20%. But only in terms of ASKING price. Cause the selling prices haven't recorded yet as the homes are still unsold.

So the 20%-25% drop has already happened and as transactions post in 2009 the national surveys will show it.

In otherwords, we have already SEEN the drop in asking prices they speak of. Now as 2009 nears, those sale prices will be recorded and the premonition will become reality.

That does not necessarily mean that the asking prices are going to drop an additional 25%. Just that the recorded selling prices will reflect that dropped asking prices.

ALSO. Since California and the areas mentioned in the article are some of the last areas of the country where prices have held, it's only reasonable to assume they were going to correct eventually.

So if the rest of the country has dropped some 50% and the areas in California drop 25%, isn't it fair to say that California real estate has largely beaten the market? Or at least been on par with the rest of the country? It just happened later here than it did in say Vegas.

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