The thing that I see happening right now that can concretely impact the last vestiges of the Boom emotions are the magnitude of the loan resets occuring right now. The subprime implosion got people’s attention and then they shook it off, “what, its contained”, now we are seeing the astronomical rise in NOD’s and foreclosures. Once people truly see the scope of this foreclosure story the psychology will shift. That WILL happen in 2007. California WILL have reached all time foreclosure highs this year with much more to go. It will be bandied about in the media all year along with further talk of some sort of bailout. There WILL be some degree of panic for people that bought near the top and know they can’t make the loan reset without a higher home price. That dynamic will happen from the bottom to the top of the market. Of course this is IMHO.
