zk I agree with you. Right now IMO what is hurting the market is psychology, (on top of way overpriced property) Rates are low, the 10 year has been dripping more and more, yet sales are down. I do believe there are more people on the sidelines then we all think. I know several people who are simply biding their time right now. Also I do believe that once properties become profitable for investors, to rent, not to flip, I do think people will buy them. It does seem like some funky equilibrium is attainable though doesn’t it? Say we hit a spot where prices have depreciated say 30%. So at that point we may start to hit some positive cash flow spots for certain properties. However I think there will still be a slow market with alot of inventory. So the rental market may stay somewhat robust, due to alot of buyer on the sidelines but there also may be more investors looking to put money into the market. Again though, I think zk repeated what we all know, the psychology is going to drive the market to a certain point… my point is that at some point smart money will start to enter the market.
