But, not so much of the 'why' the prices declined... that is pretty evident and basic economics 101 stuff (lack of buyers for the prices of the homes on the market).
I'm thinking more of the 'why' prices have declined so quickly. Here is the snippet of the article linked here...
Phoenix has achieved the unwelcome distinction of becoming the first major American city where home prices have fallen in half since the market peaked in the middle of the decade, according to data released Tuesday.
Though historical statistics are scant, experts said the precipitous decline probably had few if any equals in modern times.
“Even during the Depression, I’m not sure prices fell this quickly,” said Karl Guntermann, a professor of real estate at Arizona State University.
The professor is not sure because data from that time (The Great Depression) is hard to come by. But that is not the case today is it??
Well I don't think it is. Sharing information is practically the clarion call in these current times. Everyone's doing it... it seems.
One of the main reasons I started this blog was to share local information about the housing market here in the Kingman area. I got really tired of looking for such information (that didn't seem to exist) and had been collecting data for a couple of years on the market before MOCO hit the Internet. So that decision was easy and at least a few hundred people a month stop by this blog to see some of the information.
This blog certainly wasn't the first that provided local housing information (actually it was the first in this area, but not the first in the state or beyond) I was inspired by others in the real estate industry that were doing much the same thing on their blogs and websites. Add in that I had received email inquiries about the market which told me that others wanted to see the best data possible, and no matter how large or scant -- there was a market or demand for the information (not a financially beneficial market to my wallet, as yet anyway, but an intellectual market for certain).
People... out there... somewhere... demand relevant information on practically everything. The Internet provides the outlet of information and others take it upon themselves to supply the information. It works rather well I must say.
So back to my thinking... I surmise that if the Internet was around for the Great Depression era, housing prices (any asset class actually) probably would have declined at a faster rate than it had (depending on the best guesses of professors and historians). Today with all the information a mouse click away practically, the masses (buyers in this case) figured out that at the peak prices of a few years ago -- prices were too high and left the market.
That left the sellers, of course, holding the bag so to speak. There was no easy transition to a buyers market (if you want to call it that). Seemingly one day it was clearly a sellers market, and the next day -- clearly something else. So in essence I don't think the rapid rate of decline in housing prices is all that shocking, given the circumstances.
My feeling is that the best remedy for an overinflated market is a corrected market... as soon as possible. The Internet is having a huge impact on the correction from my view of things.