sdduuuude, I think that declining sales are a result of the following:
Fewer speculators
Fewer second home purchases
Reduced upward pressure (first time buyers aren’t buying)
People have cashed in and moved elsewhere to purchase at a lower price.
Although I don’t have any data to support this, I think the number of people who have sold and are renting account for only a small part of the reduction in sales volume. There are many of us on this board who have put their house equity in the bank but I think we are the exception. I made no secret of the reason I was selling in 2005. Everybody thought we were crazy. I sold my house for just under 800k. My neighbor insisted that we were fools and that our house would be worth 2mil in 5 years. He probably still believes that. When the masses start to see the truth, then we will have a wave of people trying to sell in order to save their equity. The period we are in right now is like the strange, confusing quiet when all the water was sucked out to sea before the huge tsunami came roaring through the land.
