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Broad: Home prices will fall another 20%

April 28, 2008 |  3:21 pm

JygiywncNews worth noting: Eli Broad, who co-founded KB Home, said today he expects home prices to drop another 20%.

From Bloomberg News: "'I don't think we're anywhere near a bottom in housing,' Broad told Bloomberg TV at the Milken Institute Conference in Beverly Hills, California. 'We're going to have a big inventory of unsold, unoccupied homes that's going to take three or four years to clear out.'

More: "'People were using their home equity as really an ATM machine,' Broad said.... 'They were spending more money than they were earning by taking equity out of their home. That couldn't go on indefinitely. We're now paying a price for that.'"

Some quick math: A 20% decline in existing median sales prices in Los Angeles would push prices down from their current level of $440,000 to $352,000. That would be a decline of $198,000, or 32%, from peak pricing of $550,000, reached last summer.

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Photo of new homes in Sylmar / Los Angeles Times