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The predictions are another 18 mos of decline in valuation too. A lot of the reason for the decline is because ppl bought more house than they could afford and were given loans to buy those homes when they really should not have qualified. This caused a lot of ppl with ARMs on homes with monthly payments increasing drastically as the rate increased. Since they cannot afford their home anymore they put it up for sale. More ppl did this and there are more homes for sale than there are buyers thus pricing goes down.
Pricing drops and RE investors stop buying too. They will buy when the market reaches bottom and make a killing but we are not there yet. Not many investors want to buy something that will be worth less in a year even if they are investing long term. Why pay 400k for your 10 yr investment when next yr you can pay maybe 350k-360k?
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