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house prices are likely to drop by 50%. And even that will only bring them back to fair value

http://www.gusmorino.com/pag3/greatdepression/index.html

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82 Morse Ave
Dedham, MA 02026

more info » $200,000 increase less than a year! Real estate is longterm (30 years) investment

The seller shouldn't pass on the cost of the remolding to the buyer in the shortterm!

"All the gold that lies beneath the moon,

Or ever did, could never give a moment's rest

To any of these worried souls."

— The Inferno; Canto VII

three "markers" to occur before he turns more bullish on the US economy:

1) The personal savings rate needs to return to the 8% level of the late 1980s and the early 1990s. Last year the savings rate even turned negative for the first time since the 1920s, as people started believing they could retire on the back of soaring asset prices. Now the reverse is happening: saving must rise again from the present 2.5%, so as to store up demand for the next bull market and period of economic expansion, reckons Rosenberg.

2) House prices have to hit bottom. For Rosenberg, this means the inventory-to-sales ratio, which "including total vacant units for sale, plus foreclosed properties", is around 17-months' supply, and should be sliced in half. All that housing stock could still take several quarters to work through.

3) The household balance sheet needs to improve sharply. The ratio of total debt to income, now at record levels, must be reduced. But specifically, the interest coverage ratio , the proportion of household income absorbed by principal and interest payments is currently at a near-record high of 14.1%. It needs to drop to 10.5%. That's the level it fell to in 1992, and 1982, in both cases providing a launch pad for multi-year bull markets and economic expansion. But remember that there's never been a recession with household debts as high as they are right now. So maybe this ratio needs to fall even further.

Perhaps that sums it all up. As Rosenberg puts it, economists base their forecasts on the past, yet we're in uncharted economic territory. New York University professor Nouriel Roubini has said that total credit write-downs in the financial system could reach $2 trillion – we've never seen anything like that before. We certainly don't know how bad the fallout might be on the US economy. That all makes end-recession estimates very open-ended.

http://www.gusmorino.com/pag3/greatdepression/index.html