Thats exactly the way I see it Kev. I can tell you that I am seeing some anecdotal evidence of a slow down in my business which is not directly related to RE. My customers who are basically distributors are belly aching right now. I am talking with my peers in California and we are seeing a definite softening. Those numbers are alarming and they should be alarming to each sector of housing. Basically the plankton of the housing food chain is disappearing. Regarding home prices falling I keep on remembering my statistical analysis class I took in college. Prices are always a lagging indicator. You will more than likely see the steepest price drops as actual RE investment bottoms and improves. Thats what happened last time.
That's an interesting point too. See, my concern is that despite how we all want home prices to come down to make then more affordable. A huge downturn isn't just going to impact the housing industry. Small Biz/Mid biz is going to get hit. Average people are going to get hit. So, unless folks are sitting on a wand of cash in assets that aren't depreciating as fast as the dollar and don't need to worry about working, most folks that can't afford homes in good times also won't be able to afford homes in downturns too.
