- Category 1: No Slowdown. Continued double digit price appreciation.
- Category 2: Slowdown. Continued price appreciation but in the above inflation to 9.99%
- Category 3: Stagnating Prices (aka flattening prices) 0% to inflation price appreciation.
- Category 4: Mild Price Declines. -0% to -5%
- Category 5: Significant Price Declines of greater then 5%
Most realtors and bankers are saying that in 2006 prices change will be in Category 1, 2 or 3. However, we are more likely to see Category 3 or 4. Inventory is building in the bubble cities. Houses are sitting. Speculators are getting worried. Fear is more powerful then greed. In 2006, stagnating prices and price declines will be the norm in the bubble markets.
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