I am not underwater on my mortgage but am close to breaking even if you count the improvements I made to my home. I want to try and get some of those back but with the constant price drops it is like trying to walk up the down escalator! Psychologically I can't sell for what I paid for in 2004 and watch some young'un get the house for that price with the new doors/windows, hardwood floors, new roof, etc.

A pretty interesting poll. Jamie, maybe you can repeat polls every quarter so you can see how/if wonk reader's housing sentiment changes. I would be curious about the data.

On a side note Gary Shilling suggested yesterday housing is in for another 20% price decline over the next few years. Gary is a total perma bear but it's interesting to see the estimate % of price decline has gone up in the past few months from 10-15%.

Buyers are and always will be under less pressure to become buyers, than the pressure sellers often face to become sellers. A job relocation, loss, divorce, death, illness, interest rate adjustment, amortization recast, or other life changing event will never force a buyer to buy. But these external forces force sellers to sell all the time.

My point was that there are lots of people who would love to sell, but are not listed as "for sale" because they've given up or they don't like what they hear when the RE tells them what they can get for it. Shadow inventory isn't just foreclosures... it's also despondent would-be sellers. Gina (above) is a great example. But it seems like she bought at a bad time (relatively high prices) and did a lot of renovations. I saw a lot of people who wanted to sell and retire but couldn't stomach getting so much less than their house was "worth" 5 yrs ago.

I think the poll results (though unscientific) are bearing that out, chappy10. Lots of pent-up sellers, including those who wish they could sell in order to buy elsewhere.

At the same time, Josh is right, too -- negative events can force a homeowner to sell in a way that they don't force a buyer to buy.

I would love to sell right now, but my wife and I are underwater on our mortgage by about $40,000. We are paying extra each month on the the principal balance to try and catch up so we can sell. I hope prices stabilize soon, but not holding my breath. We need a bigger home because we started a family.

Several of my potential real estate clients have opted to rent their houses instead of selling them. They are hoping the market prices eventually come back to where they can afford to sell.
Meanwhile, even though housing prices have fallen, rents have not. In fact rents have increased which allows these same sellers to cover their costs while they wait.
I have added property management to my services because of this increase in rental activity