Jim, that is quite a "scorched earth" picture you painted, even though you and I apparently agree on one thing: home prices will come down--to some extent--and they should. Home prices can't exceed people's ability to pay for them and have always risen and fallen according to personal income levels.
However, who will sell in this environment, and create the excess inventory of homes that would signal the "falling pillar" that you referred to?
I predict people will hunker down and not make a move at all.
Employers aren't going to transfer as many employees as they did before--costs too much.
Retirees are going to postpone that move to sunny Florida, either because they've lost their stock nest eggs and have to go back to work, or they don't want to commit to a new home purchase when their present home is probably paid off already.
Divorces may decline due to the high cost of creating separate households. Marriages might be postponed, too, due to financial uncertainty.
So, where are the empty houses going to come from?
If prices go down as much as you say they will, houses will get snapped up by investors, who will make big bucks renting them out. That's the way the real estate cycle works, usually. |
