I think that the people who refuse to sell will not be able to tilt the market much. I believe that the must sells will dominate the market and thus be able to move it in a more significant manner. Now, the golden question, “what is going to be must sell?” heh heh heh…
This is most likely where we may diverge in opinions. IMO I think the must sells will obviously be distressed homeowners and these will drive the market. Of course I lump foreclosures, shorts and REO’s into this one category. There will be an unfortunate few who are not distressed but will get caught by the tide including divorced people, relocations and that type. He who is a don’t want to take the loss now will certainly continue to sit on the sidelines as long as he can make his payment.
The more interesting question to me is the where… My mantra is well known and repeatable…it will depend on type of home and location. Believe me I am not saying higher end will not go down, however I think it will go down in a less severe manner then corresponding middle or lower end. Condos will get whacked harder. Homes requiring higher overhead will go down more (Mello Roos and big HOA) then peer homes that do not.
Interesting point about SF… One thing that I feel will definitely support sales prices are rentals. Once we see properties pencil out, they will definitely get scooped up by investors. I do feel that at some point, an investor would say, okay, I will put 20% down and if I break even, I am happy because of the write off and because of the potential for appreciation. I still feel we have a long way to go before that point.
