Free Fallin

Here are lyrics from two of my favorite Tom Petty songs:

• "Yeah I'm free, free-fallin" - Free Fallin
• "I'm learning to fly but I ain't got wings, Comin down is the hardest thing, I'm learning to fly around the clouds, But what goes up must come down." - Learning to Fly

Another day and another horrible housing number. This morning S&P/Case-Shiller realeased housing data for the month of September. The Composite 20 index is now off 21.8% from the peak and there are no signs that this epic fall will end anytime soon. The bubble markets (Las Vegas, Phoenix, Miami) look like they are in a race toward zero. Although markets such as Dallas and Charlotte are holding up much better, they are also down (no one can escape the great housing collapse).

Any recovery in home prices is many months if not years away and when we do reach the bottom the "rebound" will leave many wanting. I expect housing prices will return to annual appreciations we saw before th bubble, specifically home prices will rise roughly in line with incomes...something along the lines of 3%-5% annually.