How Far Might Housing Prices Fall?

How Far Might Housing Prices Fall? (Barry Ritholtz in Seeking Alpha, Jan. 4th): "WSJ: "Federal Reserve Economists study: U.S. house prices "likely would have to fall considerably" to return to a normal relationship with rents... Prices would have to fall 15% over five years, assuming rents rose 4% a year. House prices would have to fall further if the adjustment took place more quickly... That means the rent/price ratio is about a third below its long-term average. To return to normal would require some combination of falling prices and rising rents. The paper suggests house prices would need to fall about 3% a year, if rents grew in line with their 4% average annual growth this decade." That's a pretty hefty pull back over time, especially on an inflation adjusted drop."