the thing is that we cannot say for sure if it will be drawn out because the factors that caused the runup of this magnitude are first time in history on a scale like this. Remember that a bulk of buyers between 2003 and 2006 have been some type of exotic mortgage with little or no downpayment, this applies to both prime and subprime. Just because of costs hardly anyone after 2003 could afford a traditional mortgage. When these 2yr, 3yr and 5yr terms reset it’s just like a plug being pulled off and the seller has no other choice but to foreclose – no refinancing since it will be impossible for him to qualify against traditional guidelines, no selling because he cannot carry costs for 6 months on the market.
My hunch is that in 3 years there will be dramatic market changes and I wouldn’t consider that drawn out 🙂
Of course I could be wrong and we could also have another “15% in the bag” 😛
One thing that amazes me is the shortsightedness of the Realt Estate industry. They should be wishing for the correction more than anyone because if the correction doesn’t happen we are going to be in a flat market and that doesn’t benefit ANYONE, buyers cannot become homeowners, sellers can’t move on and RE professionals don’t make any money. Only if prices correct sharply will they start going back up again…it’s all cyclic.