Dire Forecast fron CNN?

If someone offered me the bet, "Will East Bay real estate prices be 31% lower in 5 years?" I would take it in a flash. Yet this is the prediction CNN Money just rolled out (click here for article). They base their projection largely on a return to normal of the relationship between home prices and rents. They argue that "People typically won't spend more in monthly costs to own a home than they would to rent. " Nonsense.

By the way, their definition of the East Bay extends to Walnut Creek, Concord and beyond. Be wary of broad analysis that subsumes many markets. I would be most careful in markets that have been growing very rapidly in recent years and those where large amounts of raw land--build able lots, that is--is still available. Those living in mature markets like much of Berkeley and Oakland are much better off than those in Las Vegas.

Unless you like to gamble.