LOL, no no, not ALL first time home buyers. First time home buyers that happened to buy last month/go forward basis theoretically speaking.
If you take that segment of the market and look at the market and see that prices came down 3-5% in the span of a month - why would you buy a place especially if you only have 5% down? If you were to look at the numbers of this month to last month - I would hazard to guess that you wouldn't be overly motivated to buy and essentially have your downpayment completely wiped out so quickly even if it is just on paper. (Though I guess you could low ball something like 20%)
You're right, these same people can certainly hold onto new purchase for 25 years and be out ahead. But I'm guessing that the fact prices are coming down means people are going to be a lot more gun shy going forward. Why buy and hold 25 years when you can wait a month (or more) to see if prices drop more . . . and then hold for 25 years.
I'm a little confused, all of my arguments based on buying at the peak? I'm looking at the prospect of first timers buying say this month or next/this instant.
Not sure if I'm putting this down correctly, I'm typing as I Starcraft hehe.
EDIT: Woot! done another mission. Wait, you think prices are going up 5% by October?