The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Wyätt Gwyön who wrote (18939)	3/27/2004 8:56:59 PM
From: Les H	Read Replies (1) of 306849

[quote]theoretically, if the real cost of a good increases, demand for it should drop. however, it is QUITE CLEAR that housing demand is now at an ALL TIME HIGH.[/quote] That's because the lending standards for housing have eased considerably sincethe mid 90s. You can manufacture demand for a good by making it easier for people to qualify for a loan, whether it be the seller providing the downpayment, the lender providing the financing for the closing costs, the housing authority lowering standards for resident aliens, and so on. How many cars would there be sold if the auto financing didn't allow for the rollup of negative equity from trades into the new car loans?

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