From what I see on the ground things are pretty hunky-dory price vs income. The disconnect comes in the psychology. Most people I see can afford to buy at todays interest rates and prices in neighborhoods that are in the range of acceptability/desireability to them. What is stopping them is fear of futher declines. So they continue looking for the perfect house at a giveaway price and buy only under those circumstances. CAR wouldnt you agree that pretty much describes your current situation?
