how much further home prices will fall

Here is a great way to see how skewed  some MLS's numbers may be.

1st, figure out what price range 80 to 90% of  home sales in your market fall under. Here in Jacksonville, the number has been for the last year around 80% of all homes sold are under 300000 in price. So take that number and do a search on one of your MLS statistical menus and see what the average sales price, average list price, and median list and sales prices are.

2nd, do the same search on the MLS statistical menu without putting the cap on the price and see how it changes the average, and then check the mean. It doesnt change it that much. So really the mean you have determined by fiddlin around with these numbers may be able to help you determine how much further prices have to fall.

Here is my theory. IF you take the median household income for an area, then add on a car payment and some credit card debt, then take those figures to one of your friendly mortgage brokers/ bankers/ credit union rep, and then ask them to give you a loan amount that this average family would qualify for, you can determine median  price for your market. Now compare that to what the MLS says the median price actually is and see if that doesn't seem like a reasonable point for prices to fall thru to. Keep in mind as jobs are lost those numbers will change so it is important to get current data on wages. 

Any way...please criticize and comment on this...as I am curious.