I agree with LA on this one, the past bubbles didn’t have panic but the past bubble didn’t have the I/O, adjustables and teaser rates to extent that this one did. It isn’t just a percentage points higher, the majority of the loans from 2003-2006 were not 30 yr fixed in So Cal. The past bubble was part of a normal cycle with normal financing and for the most part the only people who owned homes could afford them and could afford to ride it out. This bubble is a whole different ball game and I think panic will hit in 2008. I think the herd has turned, I think that the holidays derailed the decline and kept inventory off the market. As the forclosures drive the comps down, even if you find a buyer in the spring, the lenders wont make the loans because they have deemed So Cal a declining market, people won’t have the downpayment, nobody will be able to move up and we will have real estate grid lock. Fasten your seat belts.
