Personally, I thought it would get extended but not expanded to existing home owners. Seems a bit like an act of desperation. It will be interesting to see what happens this spring. Yes, there is a lot of distressed inventory but once the economy turns and people feel better about their jobs, the pent-up demand may be furious. That may be a while off but I get the feeling the potential pent-up demand is swelling as the sales volumes continue to shrink.

In the coastal areas between 2000-2006 a lot of demand was relieved by new construction. One could have easily argued that new construction was the “shadow inventory” of that time period. The demand easily overcame the supply and the rest is history. Yes prices were lower back in 2000-2001 but interest rates where higher as was the value of the greenback.