Jay,
FWIW, I agree with you that housing has to come down at some point. All around me I see huge homes being built for families consisting of a total of 2 to 4 people. Once the baby boomers start retiring not too long from now, I believe the housing market will be in trouble. I say this because Americans have much of their savings in their large homes. Once they retire and need money, why live in a large house, pay to heat and cool it, and pay expensive property taxes? Makes no sense whatsoever, but I have said that all along with the trend towards larger homes, and have been wrong all along as they have continued to be built. The question I have is do the kids coming up(many now already with large debt loads) have the ability to buy all of these homes? It is my firm belief that they do not. In any case, I would like to know why you believe that we are headed to a recession/depression as you said in your post. A fall in home prices does not necessarily mean that we are headed towards an overall recession, or dare I say it, depression. Prices in some of SoCal have fallen 40% over the past two years, yet the area remains vibrant from as far as I can tell, especially with all of the technology layoffs.
BK |
