After the Wall Street Journal columnist's cheery projection (see posting below), here's the ulcer-encouraging outlook from The Economist. The author assumes we're only half way through the housing bust and prices are set to fall much further, particularly in places like Florida. A key quote:

The discrepancy between supply and demand suggests that prices could fall a lot more. By historical standards there is a huge glut of unsold homes on the market. The homeowner-vacancy rate—which includes all vacant homes for sale—has soared to a record level of 2.9%, which means that there are some 1.1m “excess” houses for sale compared with the average between 1985 and 2005. Although the inventory of new homes is falling as builders have slashed their production, the supply of homes for sale is being pushed up by foreclosures even as demand from new homeowners remains weak.

Read the whole thing.