Gary Shilling of A. Gary Shilling & Co believes that the housing market has another 20% to go before it will bottom out. BusinessInsider has a pretty extensive slide show explaining how he came to that conclusion.
I noted a few weeks ago that I don’t think the housing market has bottomed out. Despite what various talking heads may suggest, the numbers and historical trends suggest it still has more to drop. It still seems to expensive for there to be enough of a market to warrant the price. This is a cyclical problem. Unless housing becomes more affordable, or potential buyers become more affluent (unlikely) housing prices can’t be stable much less climb in any meaningful way. Eventually prices must drop.
I’m glad to see validation that my head scratching isn’t totally unwarranted. This has bugged me for several months. People claim it’s bottomed out, but there doesn’t seem to be any rational reason to think that other than wishful thinking, which I’d argue is optimistic, rather than rational.