My name here for the last year plus has been “lendingbubblecontinues”. Finally, it looks to be coming back down to Earth.

I’ve often said that housing prices can “gap down” just like stocks, once their liquidity dries up. I truly believe that once it takes an actual down payment (even 3-5%) to buy a house in SoCal again, that the market will effectively seize up, and homeowners will wake up to find their homes are effectively “valued” at 30% less than they were before they went to sleep the night before.

Feel free to disagree, but remember that those who say it will never happen again (like sdrealtor this morning saying we will never see a 3/2 SFR for 250K in decent neighborhood in SD again) are speculating just like I am.

What I do know is that there are a lot of people thinking loans are going to be funded on houses that entered escrow in the last few days that are NOT going to make it.

The market is going straight down the tubes from here and there ain’t nothing David Lereah’s MOMMY can do about it!