I believe the 8% fall in home sales is grossly underestimated. NAR recently released a report for 2005 which stated 40% of existing home sales were for investment purposes or second home purchases. I believe 12% were for second homes, leaving 28% for investors. I feel the 40% mark will fall to 20% as the market tightens. 8% decline is hogwash.
Homeowners will feel the burn as rates continue their ascent. Inflation won't help us as long as wages stay flat. It really is different this time because past housing booms landed in a falling interest rate environment. This boom is sailing directly into rising rates.
I can't even keep up with all the articles at
http://thehousingbubbleblog.com
Another fave is
http://globaleconomicanalysis.blogspot.com/
My play on this market is put options on ETF XHB. This ETF is heavy on big name homebuilders.