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: Elroy Jetson who wrote (29128)	4/6/2005 11:28:52 AM
From: John Vosilla	Read Replies (2) of 306849

I think a real estate crash limited to both coasts (and Chicago which always seems to bubble in a similar way due to available incomes) accompanied by a larger than normal recession is likely. Bingo. This is inevitable and the best case scenario with a continued pickup in natural resource based industries in flyover country with property prices appreciation in the midwest offsetting the huge declines in the overpriced coastal markets. My question is where does the excess lending go next? The end of the real estate boom around 1990 led to the birth of the stock market bubble. Yet stock prices seem particularly high to me (and corporate profits as a percent of GDP very high). Stock values in 1990 were exceptional. Hopefully a rebirth in the new economy along with advances in life sciences and biotech. Unless we go into a depression some of those beaten up tech stocks could be the growth engine the next cycle. For now Sarbanes-Oxley has really put a noose around the neck of the next generation innovators.

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