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Real Estate Investor Guru Predicts Huge California Price Declines

In 1997, Bruce Norris, author and self-taught prognosticator, came to an astounding conclusion: real estate prices, after plummeting for seven years, were about to take off.

He predicted that home prices would double in eight years�missing the mark only in that he was too conservative. Prices actually tripled.

Now he prognosticates that prices are going to slide downward for the next four years, erasing all of the gains of the last two years or more.

In a forthcoming book, California Crash, Norris says a price drop will change the mood and it�s coming because of housing�s weak affordability. Norris points out that the two times affordability fell to 17%�in 1980 and 1989�the market was flattened.

Low affordability leads to reduced demand (depressing home-building and elimination of jobs), increased foreclosures, and falling prices. (California�s affordability rate is now 14%, according to the California Association of Realtors.)

43% Of First-Time Home Buyers Highly Leveraged

Norris asserts the most dangerous modern trend is the belief that real estate prices go only in one direction. A recent announcement by the National Association of Realtors confirms that notion. They report that, nationally, 43% of first time buyers financed 100% of their purchase and an additional 50% financed from 71% to 99%.