A drop -- or not
But Motley Fool contributor Marko Djuranovic has a piece this week arguing against such a swoon. He thinks "most homes are probably priced near their fair value." He says housing costs have risen in large part because new homes are bigger and generally more expensive to construct than they were a generation ago, not because builders are taking huge profits:
This is important because it creates a floor for the price at which homebuilders will be willing to create additional inventory. Buyers will thus be faced with builders willing to slash prices drastically on existing inventory but unwilling to offer similar discounts on future projects.
One thing seems certain: The debate over prices -- whether they're artificially high, and if so, how much -- won't be resolved soon.