Bubble scenario “I cannot afford this house but I will buy it because the media and my friends say I should” BAD Choice
Bust Scenario “I can afford this house but I won’t buy because the media and my friends day I shouldn’t” Also a BAD Choice
Totally agree. But I think what most of the folks on this board are saying is — “Well, buying is still more expensive than renting so I guess I will continue to rent”. Now in areas like Temecula that may not be true anymore because we’ve already had huge price declines there. If I could live in Temecula I would be looking seriously at buying now.
Another thing to remember is that on the way up, the majority of people were buying because their friends and family and the TV said they should. Guess what? On the way down, the majority of people will avoid buying because their friends and family and the TV will say they shouldn’t.
Psychology and E-Z Credit drove it up.
Psychology and Old Fashioned Credit will drive it down.