The word “bubble” still doesn’t do justice to the US housing market. Signs are emerging that the five-year boom in house sales and price appreciation may be losing its heat. It is likely that the housing wave has already crested.
Outright property depreciation is rare – almost unheard of – even in egregiously overvalued markets. Falling home prices typically occur in the context of falling employment, which is unlikely in the near term. The most likely scenario is a orderly correction, not a disruptive crash in the US housing market.
Excerpts from National City
Financial Market Outlook 8 -15 -05