Hard Landing Now Seems Likely on East Coast

According to this article, price cuts of 20% are now commonplace in the East Coast housing market and analysts are saying that a "hard landing" (i.e., a crash) is far more likely. And foreclosures are up 35% It seems that they are entering a downward price spiral that will be difficult to reverse. Just a month or two ago it was all "oh, prices will soften and appreciation will only be the normal 5% or so...it will be a 'soft landing'". Is the East Coast a harbinger for the West Coast? How are their amygdalas doing I wonder?

Some choice quotes:

"Boston-area homeowners trying to sell their houses are sharply reducing asking prices -- in some cases, by $100,000 or more -- in response to the sudden slowdown in the real estate market."

"Demand for single-family homes has declined as prices have risen in recent years and interest rates have begun to climb, causing the number of properties on the market to pile up."

"...reductions in asking prices of 10 percent or 20 percent are now common in both high and moderately priced neighborhoods..."

"''The evidence -- both early data and the anecdotes -- are pointing more toward a hard rather than a soft landing" in the housing market, said Nicholas Perna, an economic consultant in Ridgefield, Conn. ''Prices could come down. Could it be 10 to 15 percent? There's no way of knowing, but what we're getting is more clues that you've got a decline in prices underway."

"Some houses are now listed below what buyers paid a few months ago for a similar house, making it very difficult for real estate agents to estimate an asking price for clients."