It depends upon the type of property, its condition, where it is located, and what scale you are using to determine the price drop.

Properties that are ready to move into, are well priced, in good neighborhoods, well retain their value.

Properties which were bought at the peak, were an experiment by a do it your self home flipper, who was under capitalized, will probably see a very large drop.

The question is how many of these property types make up the Seattle market? When I look in the central area of Seattle the prices are back to about 2005. I was showing a client some houses in Tukila and Seatac area, it seems that they prices are hovering around 2003 prices.

How much lower they will go will depend upon interest rates, gas prices and employment. Higher interest rates will make prices lower, higher gas prices will drive up costs for new construction, and the amount of employment will dictate how many new people will be moving to the area, or leaving the area.

Look at your crystal ball and maybe you can tell me how those three factors will change, and then you can tell where housing prices will go. .

I don't consider Seattle's demographics and San Jose's to be very similar. Seattle should stay more stable in general because its in a much more stable area.

Seattle,

Yes, Year-on-year, prices are down. However, we're seeing some consistent stability in prices over the past 5 months with consistent drops in the relative supply of homes. I use a measure called "Months Supply" as one of my data points.

Months Supply measures the ratio of buyers to sellers and basically says "if no more homes are put on the market and buyers buy at the same rate, the inventory will be exhausted in XX months" OK, it's one number.

As we turn around, we need to be looking month-to-month (and going back, say 6 months) to watch for recovery.

King County median home price From January through May has been relatively flat with 4 of 5 months either $379k or $380 median home price. Supply relative to demand has been consistently dropping. For this analysis (like golf) a lower number is a good thing for sellers.

I posted a pdf on my web site. You can click the link below (hopefully) to download it. I hope it helps.

We can't predict the future except to look at the past and extrapolate. We don't know what external factors may influence the market - war, terror, bank defaults. But, extrapolating the data looks encouraging...

Seattle Home Buyer: I am constantly looking at my stock portfolio and asking the same question. How about you? Where is the bottom? How bad will this economic dip or recession last?

Real estate agents are in denial? I don't think so, Half the agents in many offices are GONE. Offices are closing or merging to reduce overhead. Agent incomes are in the tank. People are having trouble feeding their families. YET — for those who are hopeful for the future, we need more of them. My mother use to tell me as I was growing up to BE POSSITIVE, walk on the bright side. And we should. We owe it to our families and our self esteem.

WHAT DO WE KNOW for sure? Death and taxes — right? WE know that the economy of the US and the World flows in waves. Up and down. Always has. That is a fact. Yet, it seems so many people in the world are always waiting for things to improve so they can THEN make their fortune. We hear that all the time. How realistic is that? If the stock market is off 2000 points and homes are down 20% to 40% (after jumping the same percentages from July 2004 to July 2005) , is this a correction. Is NOW the bottom?

Yes, you do know the story. Most of us wait for the bottom until the bottom passes on to "going up" or the "all time high". That is when we have just got to jump in. Or, to say it another way, THAT certainly is the place for us to jump in -- RIGHT?

Maybe your friends in the real estate business are NOT in denial. Maybe just smart investors. They may be focused on that old AXIOM "buy low, sell high!" People with foresight maybe. If we listen close, isn’t everybody saying that it is a buyer's market. Maybe it is?

What if NOW was the time to buy? The perfect time? What is your strategy?

It's actually 11% from the peak I believe. The peak median was 481k, and the August was just under 424k. That's a decrease of 57k, or 11.8% if I'm doing my math right.

You're right no one can predict. What surprises me is that Pierce County is doing so well. I'd read they have much more exposure to sub-prime than King. It just shows how looking at one factor won't necessarily give you the right result going forward.