Now that the (current) government subsidy has passed, the following red line shows the likely direction of home prices needed to revert back to the long term trend.
(This trendline is based on the assumption that the government will continue to nationalize 100% of new mortgages with the Fannie and Freddie tax payer money. If they were to do the right thing and step away, prices would collapse far further than the red line indicates)
Click on image to enlarge:
+Case-Shiller-UPDATED.png)
