Houses are still substantially over-valued even though prices have already fallen by around 10% on
the Case-Shiller national index
.
An additional decline of between 10% and 15% this year would
put house prices back in line with the fundamentals.
However, in a market driven by fear and panic,
there is only a slim chance that house prices will stop falling once the price-to-rent or price-toincome
ratios return to their historical averages.
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