Also, let’s not forget that a flat market will be very painful to sellers who bought using Interest-Only and ARM loans. They have little or no equity so the transaction costs will cause them to bring money to escrow — a psychologically depressing situation.
The typical churn in the market will cause people to sell for personal reasons.
A flat market will eventually cause a declining market once people realize that they can rent for a lot less thus they are loosing money living in their houses.
If you look back at history, you can expect to see the following type of price movements in the next 10 to 15 years. It was very typical of the last downturn.
