We’re patiently waiting for the end of the 3rd quarter this year, because by then the media will be harping on the effects of: the looming spike in ARM resets; the skyrocketing foreclosure rates; the reality that this has been a really horrible year for volumes and prices; and the normal downturn that occurs after the end of the summer.

I think the public’s recognition of all those factors is going to converge at about the same time. When that happens, if there’s any remaining doubt that now is NOT a great time to buy real estate, the tone of the reporting will be alarming enough to cause that tipping point that will push the market psychology firmly and decisively into negative territory. At that point the correction will take on a life of its own and nothing will stop that correction from playing out – not lowering interest rates, not bringing back free money, not even price reductions.

And don’t kid yourself about the builders not cutting pricing. There’s little difference between the builders’ positions in Riverside County and San Diego County, except that in SD County they actually have more margin between costs and sales prices.