I think the main problem in how slow prices are falling is the fact that people don’t buy what they can easily afford, but buy what they can barley afford thus keeping prices up longer.
I don’t think thats the case at all. Maybe its what ran prices up in the first place, but it’s certainly not keeping them there.
Prices are falling slowly because there are literally almost no buyers. The market has become illiquid and seized up.
Everyone that wanted a home in the last decade could get one with the loose lending standards. Now that prices are moving south the few buyers that are on the sidelines with cash & good credit are *not* willing to stretch to make mortgage payments. It doesn’t help that sellers aren’t being realistic with the pricing.
The only thing that is going to bring about a crash is if/when one of the big banks goes under (like Countrywide), whomever buys up their assets for ten cents on the dollar just dumps all the inventory at whatever price the market will bear.
