I agree with most of your points with possible exception of the last one. Yes, today’s renters with six- or seven-digit sums in liquid investments are better positioned to take advantage of rock-bottom prices of 2009+ than today’s homeowners. Yes, houses are less affordable today than they were in 2003 (duh!) That’s precisely why prices are going to fall. At least to 2003 affordability level if not lower. (Probably lower if 2003 affordability level means zero down and 45% debt-to-income, and 2010 homebuyer needs a 20% down payment and 30% debt-to-income). I don’t think that wealthy people can buy off enough houses in Encinitas to keep them unaffordable to poorer people indefinitely.
