I think I can confirm this NYT impression for the Twin Cities metro area, and also suggest a reason why it may have a quicker than expected impact on consumer spending ...
Sales Slow for Homes New and Old - New York Times
Adding it all together, a variety of experts now say, the housing industry appears to be moving from a boom to something that is starting to look a lot like a bust.
We bought and sold at the height of the boom. We couldn't wait any longer. Since we traded up I expected we'd end up with a short to longer term 5-7% loss (meaning I thought we overpaid by 10% but about half that was covered by our prior home sale). Our tough.
What I didn't expect was to have this explicitly stated in our mortgage statement.
Background first. Back when home prices were climbing, our bank began putting a number on the monthly mortgage statement reflecting the increase in equity. It was a very deliberate, and somewhat evil, move to make people feel wealthier. More wealth, more borrowing, more bank revenues. Except it also means more risk, since the rising numbers were illusory.
Economists have talked about this risky 'wealth effect' of the housing bubble, but they don't often talk about how that 'wealth effect' is mediated. In our case the bank was very explicitly communicating the 'wealth effect'.
That worked well for lenders when housing prices were going up, but for some odd reason our bank didn't turn off this number when prices started falling. So we now see a negative number -- roughly in line with my expectations.
So our bank is now explicitly communicating the opposite of the wealth effect --the poverty effect. Anyone who looks at their mortgage statement, especially those who enjoyed seeing the older rising numbers, are now seeing the falling numbers.
This direct and explicit communication may accelerate the consumer response to falling housing prices. The old delays will likely compress, resulting in a faster contraction. I wonder if the Fed is expecting this ...