Having been in the thick of it the euphoria actually stopped around July 2004. Until then you could put a sign in the ground, pick any price and buyers were climbing over each other to submit offers above asking prices. In July 2004 the psychology shifted and while statistics may show prices rising some places things were clearly different to those of us on the inside. After that it was mostly unqualified, uneducated buyers getting in with the most toxic of financing. It was the buyers who werent strong enough to get in during the hysteria getting in with no money down and counting on appreciation while not realizing the party was over. That went on for a couple years but by the end of 2006 the writing was on the wall for all to see and prices headed down. Once the financing firehose was shut off in Late Summer of 2007 the rest of the chips began falling more rapidly.
So the questions are where do you put the peak? In Summer 2004 when the psychology was there or late 2005 when the statistics were there? Where do you put the start of the downturn? I could make cases for Summer 2004, Late 2005 but clearly no later than Late Summer 2007 when financing vanished.
