Real estate prices have been rising for so long now and while many people have been trying to predict the date when the bubble will burst, they have lost their credibility in the process; what many people don't realize is that the long awaited event has finally taken place. Real Estate inventories have been rising to such astronomical highs at such a late time in the year which proves the masses are trying to cash out all at once while at the same time, the buyers aren't biting. Many of the sellers are actually speculators who know that they must sell now at all costs or risk being stuck with their overpriced property.

Interest Only and Negative Amortization loans along with seriously lenient lending standards have played a big part in inflating the bubble. House prices are now severely over inflated, people are severely overstretched and there is only one way for this to end and it's not going to be pretty.

There once was a time when you had to put down 20% of the purchase price of the house along with excellent credit and prove your income;those days are long gone, but for how long? The masses will default on their mortgages as they see their monthly payments go through the roof and lose their ability to pay their mortgages and their desire to keep the house while they see the value of it constantly drop.

Supposedly house ownership is at an all time high, nearly 70%;but that all depends on how you interpret what the word ownership means. If many of these house owners have little or no (or maybe even negative) equity, they cannot truly be regarded as house owners. The fact that there are these exotic loans and even 40 year mortgages make buying a house more like renting a house since you will never pay the loan off.

Although the bubble has popped, it still is not a good idea to think about buying right now since the sellers are desperate, but even after cutting their prices, their property is still vastly overvalued. I feel the time to buy will probably be sometime in 2007 when there will be $1 trillion in ARMs that are going to adjust and cause an abundance of foreclosures.