Home sales are up, but inventory is at an all time high. We are clearly far from the bottom. The only arguments for upwards prices are emotional and rhetorical. Fundamentally things are getting worse.

The BIGGEST driver of prices is supply and demand. Well the big news today is another record high supply. And as the knife catchers buy, the demand will weaken too. With tougher lending standardsmore people loosing jobs, and others spend more of their income on food and energy

They are helping drive prices lower in the long run. Most recent/active buyers I know will be or are stretched way to thin from their purchase. This means that after they close escrow, even less discretionary spending out in the economy. With companys big and small reporting weaker earnings, the reduction in consumer spending will only add to the unemployment.

Most knife catchers now are buying out of past regret/envy or FEAR of being priced out in the future. Both motivators are highly emotional and illogical. Usually the current buyer/k. catcher is not paying attention to the real fundamentals and economic indicators, which are poor and point to further price reductions.