Case Shiller Updated to March 2008

I am plotting here the graph for LA based on Case shiller updated to March 2008 with additional two projections. I want to know which one makes more sense to you.


The Blue line is the current S&P Case shiller for LA updated to March 2008
The Pink line is my prediction of house prices behavior from now to about 2012
The yellow line is the housing Bulls prediction of house prices behavior from now to about 2012

The pink line assumes that the unavailability of stated income loans, Option ARMS and stated second mortgages will simply decrease the number of qualified buyers to such a point where over correction would occur, then after getting to some support level by wages, market will flatten and start increasing at the rate of inflation.

The yellow line assumes we have hit bottom, and are going to be flat or start appreciating again....

Now, you tell me, who do you think is right?