When we were talking about this kind of thing happening on the outskirts first and working their way in, we were not guessing and we were not exagerrating.
I think there are probably a lot of people who will drive the extra 5 miles to save $100k. There are probably even more buyers who are looking at these price cuts and are coming to the conclusion that this wave isn’t stopping soon and maybe they should wait.
Anyone who bought high and is now struggling with the decision of whether or not to refi their ARM is probably deciding to throw in the towel. The combo of declining prices and ARM resets will create a vicious cycle of foreclosures and more price cuts.
