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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: ild who wrote (21976)7/6/2004 2:52:48 PM
From: Wyätt GwyönRead Replies (3) of 306849
 
1% below the top print--not bad at all! it seems the one thing that would surely kill housing is a credit crunch--the question is, could that possibly happen?

enough failures among credit purveyors would surely cause a credit crunch.

enough nonperforming loans would surely cause creditors to fail.

enough of a rise in interest rates would surely cause loans to nonperform.

so an interest rate rise is a decisive domino. i know Heinz thinks RE will collapse in spite of declining rates, but i think this is unlikely. regulators, borrowers, and creditors have shown they will go to the extremes of zero-down interest-only ARMs in order to keep the bubble going, so i think a rate rise is key.
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