Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: Victor Lazlo who wrote (27333)	2/3/2003 6:39:39 PM
From: russwinter	Read Replies (2) of 36161

<2. Homeowners don't come home from work every day, check the value of their homes, and think about whether to sell or buy an additional one the next day at 9:30 am.> They may not be thinking in terms of buy-sell transactions, but they sure do think in terms of taking on additional credit and leverage. And it's the debt and leverage that's going to be a problem for them as prices erode, even a little. Further as easy credit and cheap rates (Do you think 5-6% mortgage rates are permanent?) dry up for this bubble, so will liquidity and the ability to sell should one want to move or get out. Lots of people will be stuck in illiquid, negative equity real estate. But hey, at least they have a roof over their heads, right? Big deal, so does a renter.

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