Deadzone to me the issue to buy or not to buy simply boils down to a personal choice. Anyone who buys because everyone around them is buying is doing so for the wrong reason. I could not put a number on it, but for most married couples, the choice to buy is made because one of the spouses wants a house plain and simple. So it is done in the name of harmony. I am not saying this is right or wrong, however it just is. Sales are down because inventory sucks and because homes are overpriced. They are not down because buyers have left the market. Buyers are frustrated with the market. Banks are still overpricing REOs and being stubborn with short sale approvals and quibbling over pricing. This has led to much longer shopping times for buyers.
Will this crater the market? No. Will this lead to a long slogging sort of market? Yes.
However to get the affect you are looking for that will really shake things down, the rates WILL do the trick. Note also that this holds true for generic homes in the 400k – 800k range depending on the neighborhood. When you get into the higher end stuff, it holds true as well but is stickier.
