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Originally Posted by sebastian_dangerfield
Millions of first time home buyers are shut out of the housing market right now because prices remain too high.
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They are shut out by inadequate availability of credit, not prices. And that nonavailability of credit is driven in no small part by continuing price declines.
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Regarding the market, the reasons most offered for why people are avoiding it are volatility and a fear it's overpriced. Tons of people have pulled their money out of it, which you could read about on almost any finance website. Correction = New investment + Gains, which = Wealth effect, which = Consumption.
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I really can't say it often enough, but you do yourself a disservice by reading the financial press.
Your story, that prices are too high and "tons" of people are thus sitting on the sidelines just cannot be. It's people being in the market that makes prices go up, you know.
As for your little tautology, shouldn't that already have happened in the rally since early 2009?
