First off, thanks Bugs for sharing your industry insights.

I agree with Bugs but I take except to what sdrealtor wrote.

Now is not the time to look for the gem.

The low end will continue to drop and prices declines will start to infect the higher end all the way up. The contagion will take down even the best neighborhoods.

Wait two more years and there’ll be plenty of selection.

Joe Homeowner does not buy based on calculations like piggs would. He buys because the wife wants a house. They look at current payments vs. expected new payments. That’s all they care about. The lower the downpayment, the better. If they think they can make an easy $30,000 in equity they’ll take risks.

Since prices are set at the margins, the new entrants are the people we need to be concerned about.