Okay I’ll play along, if nobody lowers their prices where are the qualified buyers with down payments going to come from? My answer, Nowhere! They exist, I am one of them along with dozens of us piggies, but we are not only a minority, we have taken our marbles home and we’re not playing.
The elimination of subprime zero down toxic mortgages is bringing down the house of cards. They are not buying the entry level homes they cannot afford and nobody is loaning them money. This is eliminating the move up and we are starting to see it in the mid range now. Ulitmately it freezes the market. One of two things has to happen to start up the motor again. Money has to flow freely (this one won’t happen for years until selective amnesia sets in) or the prices have to come down to where people qualify again and their 5% in the bank becomes 10% because the price is halved.
So to answer your question, if prices remain the same, the market seizes. However this motor won’t seize, the builders and the repos “have to sell” so it will grind without any motor oil, there will be smoke, smell, noise and damage, IMHO.
