Random thoughts

I need to keep my beliefs in front of me.

Namely, that the housing downturn will mirror the housing boom. I don't want to be one of the people who were calling for an imminent end to the housing bubble in early 2003 (2.5 years before the top). That's where I think we are in the cycle on the way down.
Here's a list of "reflexivity," affecting fundamentals in housing:

1. Regulations are tightening credit. The tighter credit gets, the lower prices will go.
2. Banks are stopping subprime lending altogether. Ditto.
3. Banks are reducing or eliminating their exposure to "liar's loans".
4. Banks are lending smaller amounts, and requiring larger down-payments.
5. Builders have 8 months of inventory and 50% more than normal "speculative" building than normal. More pressure on prices.
6. Foreclosures are at an all-time record. Increase in supply.
7. We have an under-the-radar population of 20 million illegal aliens (5-7 million workers?) who don't show up in the employment numbers. Undocumented workers outnumber legal workers at least 3 to 1. How many jobs are already lost? Remittances to Mexico are down 25% from last year's high. Maybe unemployment is really 10%, not 4.4%. Sales tax receipts in bubble states are down 20%.
8. Falling prices encourage people to wait, no matter how good the economy is.