We continue to read about the cooling housing market, but it seems at times to be limited to certain markets (NY, LA and Miami, for example) where the real estate market had sky rocketed in the near past. Also, the first stage of a price drop will often lead to a situation where buyers will not drop the selling price of their house, but many buyers are waiting to see if the market really does drop in their area, leading to a large increase in unsold inventory. Quote: NAR Chief Economist David Lereah said the increase in the supply of available homes so far this year was the sharpest on record. "What we are experiencing right now is an inventory and price adjustment," Lereah said. The housing market is in transition, he said, "and there is pain in that transition." Lereah said the slowdown represented both cooling of overheated high-priced markets and sales declines in some markets that were struggling with a slowing economy, such as Midwest manufacturing cities. Some "non-boom" markets that were exhibiting strength in recent months were now beginning to cool, he added. Nonetheless, Lereah held out hope that if prices fall, it will draw buyers back into the market. "Buyers have lost confidence and they are on the sidelines," he said. "If prices continue to adjust, then it will draw buyers who are on the sidelines." Here is a link to the entire article from Reuters: http://finance.myway.com/jsp/nw/nwdt_rt.jsp?section=news&feed=bus&src=202&news_id=bus-n23381752&date=20060823 Mike