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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: GraceZ who wrote (28914)3/30/2005 3:31:02 PM
From: SouthFloridaGuyRead Replies (3) of 306849
 
Can't spend much more time on this debate and I know you'll want the last word so I'll let you have it:

The housing market is currently dominated by boomers flipping to each other - not younger homebuyers. Most people I know are scratching their heads on how they can afford the house they want/deserve when they have to pay for $2,000 per month for babysitting and $300 month for car insurance $400 on car lease, etc. Houses in 1/2 the country are beyond affordability even at record low rates.

With regard to Boomers. They are cash poor, it's something that has been documented by numerous commentators. Wealth for most is tied up in home-equity.

With regard to the 1950's, I guess a slightly unimportant fact was that it was subsequent to the Great Depression and a 20 year purging of debt. Real interest rates are 0 and have been near 0 here for some time. Debt has not been purged - merely swapped from corporations to consumers. I suppose if I were a policy-maker this would be the least painful way to go about bursting a bubble, but that doesn't mean the debt will just go away. This won't last in perpetuity. With regard to the Japanese, well we know what happened there.
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