Well folks, now that the secondary market has shut down, if there’s no help from the Fed, housing demand, especially in the most bubbled locales, will plummet. Some areas will still be desired, but the areas described by SD Realtor will be in for a world of hurt.
Now if the Fed acts and debtors can refinance, there’s still falling demand (due to price momentum and the end of option ARMs) and an oversupply, but the decline will be much softer, and, of more importance, the credit markets will calm down.
But if the Fed fails to act … wow. I hope you, all of your friends, and all of your loved ones are either in cash (or better yet, Treasuries) or short the lenders/homebuilders/financials.
