It’s about as would be expected. Many people are going to get burned. Most people will probably be negatively effected. The first stage of loss (equity) is of course, denial.

I don’t know. 55.7% said that a MAJOR Crash was likely. Between the 16% that said they didn’t care because they could never afford it, only 25% believe in a “soft-landing” or optimistic outcome for this. I’d say that’s pretty significant, and I probably wouldn’t call that denial. For all we know, those 25% are all realtors. Either way, I don’t think sellers will be going into the transaction with eyes shut.

John Doe

There’s also the fact that the housing market does follow herd behavior. With that many people thinking there’s a crash in the offing, there’s going to be a bit of “self-fulfilling prophecy” as people stay away from the market.

B.

You’re definitely right. Although there is a need to return to historical levels, there is a good chance that with all of the negativity, we could potentially overcorrect for several years below true equilibrium.

I’m convinced that’s what happened in some areas during the mid-90’s. The resulting up-swing for 5 years (97-01) was just returning to some kind of equilibruim. The 02-03 years are a question mark, but 04-05 are clearly classic bubble action. 06 is the weightless year, and gravity will begin to bring us down in 07.