Also like to mention that the KEY factor that drove the boom was buyer *PSYCHOLOGY*. The belief that buying a home was the key to wealth, that homes would appreciate strongly, that if they don’t get on the bandwagon the road to wealth will be missed.
Today the psychology has completely changed 180 degrees. With all the problems with subprime, foreclosures and the proof that houses are dropping the value nobody wants to be a pay such a HUGE premium to assume such a big liability. Add to this the credit crunch and it spells disaster for home prices as we go forward.
The ONLY people who believe the housing drop will be minimal are the homeowners because they are in DENIAL. But homeowners are not the ones who set price points 😉 It’s the BUYER sentiment that matters. What homeowners think is totally irrelevant.
