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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: John Vosilla who wrote (29171)3/23/2005 1:14:58 AM
From: regli  Read Replies (1) of 110194
 
I don't think it will be as neat as you describe it. I expect the bursting of the RE bubble to be accompanied by job losses which will feed into lower real wages.

Lower real wages will lower affordability and therefore result in consistently lower RE prices. Once the aura of invincibility of RE is gone, watch out in EVERY market. Just as fundamentals do not count now in the bubble markets, fundamentals will not count in the depressed markets. RE will be tarnished and therefore go down for a while to come.

I think that most of us have never experienced a market like this. Houston in the mid 80s might have been a piece of cake by comparison.
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