The Housing Bust Is Here: Sellers Outnumber Buyers by 500,000

Panic selling to ensue

Here, in very short form, is how housing busts normally happen:

• A “seller’s market” evolves, where buyers have to pay up to get their first choice. Prices rise gradually, and then quickly, as buyers start to panic and sellers are emboldened to hold out for more.

• This boom continues until the average buyer can’t afford anything close to the average house. …