We are seeing slowness and supply build in a number of key markets. All of this in the face of a big bond rally that has dropped rates to 40-50 year lows. Sooner or later the 10 and 30 year bonds are going to react to the tightening cycle and selloff. The ISM number on Friday will reverse the bond bull trend, at least until contrary data is released. If more bond bearish data arrives watch out because talk of a 50bps increase will start to arise.
I'm hearing that parts of San Diego, especially downtown condos are down 10% from the high. Once the newly minted real estate loser stories start hitting the media the 40-50% of the discreationary buy volume (second homes and investments by amateurs) will evaporate further amplifying the supply side and upping the fear index.