Good post PS. I agree with most of your predicitions, and believe the ARM resets in ’07 and ’08 along with the availablity of information will make this downturn steeper and quicker than any in history. I think that the internet tools now available to buyers/sellers is helping to accelerate market changes as sellers can now monitor their competition on a daily basis, and buyers can watch sellers fight it out via reductions/incentives unlike ever before.

In the 90s, you had to talk to your realtor to get this information, and he/she had to do a lot of leg work to gather the data and keep it up to date. Now, it’s a simple click of the mouse, and boom, anyone following a local market or zip code via Ziprealty can get daily reports with their own eyes.

It’s facinating to watch this unfold. The historical disconnect between buyers/sellers and current market information is eroding, and we’re seeing the market be much more reactive. It’s still a slow process, but we’re seeing an industry change before our very eyes.