What caused the fall-off in condo sales and prices over the past year?

* Higher interest rates cut into borrowing power of entry-level buyers
* Tighter lending rules cut off access to funds for buyers
* High inventory levels (this one doesn't make sense)
* No more buyers - anyone who wanted to buy, bought
* Domino effect - owners couldn't find buyers, so couldn't buy new homes, which meant other owners had no buyers, so they couldn't buy new homes, etc., etc., etc.
*
* Common sense on part of buyers - they've had enough of high prices
* economy - fears of losing jobs, etc., led people to stay where they are, rather than move
* the level of sales volume in 2005 and the price hike between 2004 - 2005 was an aberration, it was not sustainable, and what we see now in 2007 is the return to norm, get used to it

Keep in mind, a lot of people are sitting on a boatload of equity in their homes, even though prices have dropped (by single-percentages) and sales volume by 25%. Most of that appreciation is here to stay, if they bought prior to 2003-2004.

Those who are in trouble are only those who need to sell right now, and bought at the height of the market.

They've only owned two years, anyway, so why would they think they should be able to make a profit on their sales?

Thoughts?