Yes Eric,

We have all heard of the principles of supply and demand. But what your logic fails to consider is:

1) Purchase Price
2) Borrowing potential
3) Carrying costs
4) Home or speculative real estate.

Remember the price of a home is generally based on two things:
1) Value of the DWELLING
2) Value of the LAND..

The price of the dwelling is usually a fixed cost. It cost X to purchase the wood, the drywall, the labor, the plumbing, etc. Where there is a lot of floating room is the value of the land or property. Cause for the most part, the dwelling costs don't change, it's the land they are on that changes.

I don't forsee home prices selling for less than what they were cost to build. So assuming the land values go down to nothing, the dwelling will always have at least a bottom.

And builders and real estate owners know, unless there is a panic, hold onto those units, rent them out. Everyone still needs a place to live.

ANd that's what a lot of the loft, condo places are doing now. They were going to sell but are probably going to become rental places instead.

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"When two people agree on everything, one of them is not necessary" - Arliss