The most recent existing homes sales data reveals a sales slide of 7.1%, making this the lowest pace since November. MarketWatch staffer Andrea Riquier reports on this trend possibly proving the National Association of Realtor's theory that low level supply, which is pushing prices higher, could cripple the market.
While the problem may be that people cant afford to buy the limited options available, it wasn't long ago that higher prices led to more buyers. Co-Creator of the &P/Case-Shiller home price index Robert Shiller explained this occurrence years ago:
In a 2007 paper, Shiller described the bubble mentality as “a feedback mechanism operating through public observations of price increases and public expectations of future price increases. The feedback can also be described as a social epidemic, where certain public conceptions and ideas lead to emotional speculative interest in the markets and, therefore, to price increases.”