I have always thought and posted that the decline will run in a measured pace down (7-10%… more if you have condos or are in a susceptible neighborhood and less if you are not) as well with a caviot that a catalyst will help the decline. I also have always, and still now maintain that the decline will vary by neighborhoods. Susceptible in my example means downtown condos, and the various neighborhoods in outlying areas, and others in heavy built out areas like Eastlake, and others in many central locations that ran up but don’t have desireable schools and such. The foreclosure events have always been visible to me in as much that they will help to contribute in these types of areas or any other areas that they contribute substantially to the inventory. I have always been irritated to see that some neighborhoods that alot of us post about would be some of the last to fall because of lower foreclosure rates coupled with high desireability factors and current residents maybe not having great equity stakes but high paying jobs.
Now… I have to say that I have totally been blind to the credit crunch because I have anticipated rate hikes to take the form of bond market selloffs and the ten year busting up to much higher yields. While this indeed may still happen the current lending climate has absolutely given me hope that a large portion of homes in that 700-950 range may indeed get clobbered or not sold at all… For MANY wel to do people who buy in a much higher range, I don’t expect the credit crunch to hurt as much. However for the wage earning or dincs out there making 150k to 200k a year this indeed will hurt enough to make them think twice and maybe sit out for another extra year.
I think it will take awhile before we see any manifestation of this. Again, we are approaching the cyclical slower point of the market anyways. This should excasserbate things but it will be harder to tell. Give it a year to make really good measurements. I know that is excruciating long…we will see lots of isolated points of perhaps steep price reductions and that will be good. However I think we will see the usual end of summer and fall behavior of stubborn sellers who hibernate only to come out with HIGHER prices in February and March because their agent promised them it will improve then.
If the same credit climate exists where big premiums are tacked on to jumbos… then we should see some chunks…
