Chapman University (Orange Cty, Ca.) economist Esmael Adibi, and director of Chapman’s Anderson Center for Economic Research, predicts home prices to stay inflated. He says that homes will be overvalued by 20 percent even after prices fall 8.1 percent in 2008. He also added that home prices could drop by an extra 20 percent after this year, or prices could stay flat until income catches up.

Adibi said the last housing slump lasted 54 months and that home prices fell 17.7 percent peak to trough. The current slump is in its 27th month.

Merrill Lynch Sees Real Estate In A Far Different Light

Investment bank Merrill Lynch forecasts a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010.

They contend housing prices still remain compapatively high–still far above historical norms when compared to other measures such as rent or Gross Domestic Product (GDP).

Merrill Lynch also believes housing starts will most likely slide another 30 percent by the end of 2008–a historic low.

So there you have it…two contrasting outlooks for the real estate market. What do you think? Your comments are appreciated. Scroll down below article to add your 2 cents…

The BarterNews web site has an extensive real estate section, see: RE

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