Yes, the slowdown is due to mispriced homes. Buyers are getting more picky, and expect more for their money, as they should. I don’t think we’re disagreeing here.
BTW, I’ve always believed that there was too much emphasis put on “distressed” properties WRT the price declines. The prices are going down not because of “distressed” properties, but because buyers now have to actually afford to pay the prices they are agreeing to pay for a particular house. That means that the prices will have to be lower than they were during the days of NINJA loans, when FBs thought they would be “priced out…FOREVER!” if they didn’t overbid on everything (with none of their own money, of course).
