J.P. Morgan Says California Home Prices Will Fall 44% from Highs

J.P. Morgan said the peak-to-trough average home price in California could fall as much as 58% if the country enters a severe recession. The estimate was included in materials prepared for a conference call on Thursday evening outlining the Washington Mutual purchase. Currently, J.P. Morgan estimates that home prices in California will fall 44% from their highs of a few years ago before bottoming out. J.P. Morgan said if there is a deeper than expected recession, California home prices are expected to bottom out 48% below their highs, and, if there is a “severe” recession, the bank expects prices to bottom 58% off their high.