By keeping
prices below the
marginal cost of unconventional production (about $ 75 per barrel), OPEC hopes that expensive oil production will
decline along with the fortunes of the companies engaged
in these plays.
Nonetheless, given our current forecasts for home
prices, which call for continued
price declines in the near term and a slow rate of appreciation once the market hits bottom,
price appreciation is expected to have a
marginal or even negative impact on the overall costs to buy
in many metro areas.