Reply #20: She might be right

[Warpy]

but it's not because of the expiring tax credit. It's because there is a huge inventory out there and banks are simply not approving people the way they used to, meaning there are too many houses and too few qualified buyers and that always spells deflation.

In addition, banks are starting to trickle their shadow inventory back onto the market, adding to the glut in housing.

The problem in a lot of markets is that the real glut is in the wrong type of housing, the yuppie trophy houses, where the real need is for starter and family housing. Unfortunately, those trophy houses are dragging all other prices down.

My best guess is that eventually whole exurbs of higher end housing will end up being razed, the places too impractical for growing families and too hard to heat and cool.