Quote:
Originally posted by pbs911
If someone cannot afford to buy now, they never will absent a significant change in their financial status.
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I had to look it up...
absent
If folks look at homeownership in terms of a fixed monthly payment on a long term residence, and right now that payment is reasonable to them... then fine.
Unfortunately, there are a lot of people that are thinking short term with ARMs. Assuming rates can't go down much, they are aquiring a fixed amount of debt and a variable amount of asset.
There was lots of talk in Tokyo that 'there's no more land' well, those prices dropped +60%. This was the booming economy that was kicking american ass in the 80's.
Amid substantial overhangs in the supply of property, the net effect of this real-estate boom was a precipitous downward cycle, which saw residential prices drop by 68 percent of their prior peak value and commercial prices by 82 percent, and which left property owners, many of them older people in the residential market, with high mortgage payments and little prospect of re-sale at competitive prices.
I dont think the drop is going to be that harsh... but the some of the same boomers that were buying Qualcom at 500 are the ones
investing in real estate.