patrick.net

Mark Flemming from CoreLogic says:

“When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets. Price declines are increasingly isolated to the distressed segment of the market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared."

Uh, pretty much the only thing selling are distressed properties, so 'removing them from the equation' doesn't make much sense if we are trying to get an idea of where we are going. I believe that distressed sales are going to dominate the market for years to come. It seems logical that we will have to return to 2000 to 2002 price levels before this all sorts itself out.

Check out Washington DC metropolitan area home prices:
http://bubblemeter.blogspot.com/2011/04/washington-dc-real-housing-prices.html#disqus_thread

You will see that nominal prices (non-inflation adjusted) rose barely 4% a year from 1990 to 2010. From what I've read, the historic annual rate of price growth is 7% for the Washington DC metro area. Perhaps housing is inflated in Patrick's neighborhood, but how do you explain home prices in the Washington DC area?

Jeff O, there are many metro areas that are at 2002 or earlier levels such as Las Vegas. Granted the economy and reduced tourism are reasons for that. The DC area and other metro areas are at 2004 levels according to Zillow.