Never said it’s different this time. Around the end of 2003 prices still made sense to me re: mortgage payments and incomes for most of the people I knew. At the beginning of 2004, everything seemed to jump $100K to 150K almost overnite. It didnt make sense then (I said so) and it doesnt make sense now.

As for buyer’s being ARMed, while there are quite a few in that situation there are alot more that rolled equity in move ups from what I saw personally. Here’s what’s going on in my area:

I track inventory every Monday in my submarkets when I get back from lunch and have data going back 2 years. Not sure what’s going on anywhere else but in the North County Coastal Area of San Diego where I work detached inventory was 530 homes on Halloween and now stands at 521 homes. Pendings homes sales are down from 173 to 168. Attached Inventory has risen from 294 to 312 and pending attahced sales have risen from 68 to 73. Dettached prices feel like they are around 5% lower versus Fall (10% lower for attached) but we haven’t seen any dramatic Crash here yet. Still lots of homes being bought and sold every day. One thing we are definitely seeing less of are the zero down toxic loan buyers. Nothing controversial here…just reporting the facts.

Does that look like hard and fast you? I think its coming down but disagree on the hard and fast. I think its gonna be more like slow and painful.