There is another reason why the move up buyers aren't "moving up." The owner of the move up houses don't want to lower their asking prices to accomodate the balance in lost equity from the starter homes. So what we have now is an abundance of homes over half a million, and no qualified buyers. Whereas, the starter homes for $200k have plenty of buyers waiting, and the banks are not emotional about getting a specific price they feel they "deserve" for living in the house such and such years. I still think we will see the higher end homes start falling like dominoes when the ARM resets force the homeowners that bought more than they could afford out of their homes in better areas. 2010-2011 will be peak buying season for those who have patience for the really good deals.