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Tuesday, May 12, 2009

First time buyers can't wait out the crash.

Here is a chart illustrating a " compare and contrast" between prices paid by first-time buyers and house prices in general.

It points to a rather disturbing characteristic. The bubble hit first time buyers harder, with price appreciation for those starter homes being significantly higher than for the market as a whole.

More recently, prices for first-time buyers has stabilised, while for the market as a whole, prices continue to fall. Obviously, first-time buyers have lost their nerve, and decided to jump back in.

It could be a big mistake.

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