I like reading about the housing bust because it serves as a sort of nexus for several things that interest me: I care about people and their ability to live and rest within the safety of a shelter; I am curious about systemic corruption, greed, and malfeasance that is "technically legal" but seriously "hurts people's lives," and perhaps even "hurts America"; and of course, I aspire to someday obtain something approaching the standard of living I enjoyed while I was in grad school (seriously).
In a story in the NYTimes about the persistence of high prices in major cities (NY, San Francisco, etc.) I found this:
30% too high in Florida! Very good to know: so if you're making an offer on a house, you should shave about a third off of the asking price. Hm. Or maybe half. You want to leave yourself some room to negotiate.
Mark Zandi, who runs Moody’s Economy.com, has built a statistical model designed to predict the proper level for housing prices in every major metro area. The model is based on population, housing supply, income and various other factors. As of the end of last year, Zandi estimated, prices were still 30 percent too high in much of Florida and roughly 25 percent too high in Las Vegas and Phoenix. But prices looked somewhat more sensible in New York (16 percent overvalued), Los Angeles (10 percent), Washington (9 percent), Boston (7 percent) and San Francisco (6 percent).
Zandi told me that he thought prices in the high-cost metropolitan areas could fall by even more in the next couple of years, as the psychology of the bust takes hold. The recent turmoil on Wall Street has shown what can happen in the aftermath of euphoria. But he doesn’t expect the new geographic inequality to reverse itself anytime soon. Other economists, including Glaeser, agree. However much Americans may fantasize about having a big house in the countryside, or in the exurbs, this is still a golden age for a handful of glamour cities.