Growing Signs of A Housing Slowdown

From today's NYTimes, we have an article titled "Signs of Spring Slowdown." In this article:

• "After a torrid first quarter that spun the sales prices of Manhattan apartments to breathtaking highs, anecdotal evidence suggests that the headiness has started to dissipate. While the jig is hardly up, brokers are saying that the tempo resembles a more seasonable waltz, and that there are signs of growing price resistance among buyers.
• " ... chief executive and president of Corcoran, adding, "What tells you if prices are going up is the price per square foot." She said that data from the firm's signed contracts show condo and co-op prices per square foot of $1,003 in March, $1,016 in April and $1,009 in May."
• " and a professor of economics at Yale University. Mr. Shiller shared the results of a Lexis-Nexis search he conducted among major newspapers: In May, 77 articles contained the words "housing bubble," nearly double the 40 logged in April."

The evidence of growing bubble talk and stagnating prices continues. Stagnating prices will lead to a change in market sychology. Many more people will no longer believe in the contintuation huge price apprecaitions. This will lead to panic selling especially amoung speculators, investors and second house owners. Price declines will start occuring. Look for price declines of up to 50% in certain markets over the course of a few years (inflation adjusted).