Did I say anywhere that printing money is a good thing ? It is in fact a path to disaster although a prolonged one and therefore politically more easily passable. Any country with trade deficit and debt measured in it's own currency has incentives to devalue it's currency for two obvious reasons. Countries with positive balance are trying to resist that. Unique US position as the world largest consumer adds some (but not infinite) leverage to the game forcing countries-producers to devalue their currencies as well. US essentially inpose a world tax in the form of global inflation. After first hard signs of US economy slowdown and before the global financial system fuses break there will be massive flight of liquidity to hard assets - real estate, precious metals, etc. And I do not expect this transitional period to last long - till the end of 07 maybe...
Things, in general, come to Seattle with delay. But they come eventually. Have you seen the cranes in Bellevue? There is a lot of stuff coming to market. Whole city looks like a construction site. And they are building really fast. Heard cases from flippers of negative cashflow. Same stories as in another parts of the country.
I read somewhere a good point, which is a lot of nasdog stocks declined around %90 from the peak. Do you really think home prices anywhere in america will decline %90? I don't know I really am asking. I think if prices decline even %20 to %30 it is more a correction.
20% is a huge decline. it's a crash. even 10% nationwide decline will make thing very bad. What would be the best thing is around 3-5% decline nationwide and then prolonged flat period. maybe for 5-10 years or even longer to allow wages to grow so they would correspond to house prices as at prebubble levels.
Don't forget it also depends on where you live. They're still predicting a 15-20% increase in 2007 here (Calgary)
The way realty funds are trying to enter India and the way property stocks in india are going up, I doubt that bottom is still near. The best i think is sideways move when weak players exit and then next rally should start. Here in India prices are stagnant from last 6 months.