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: John Vosilla who wrote (49389)	3/3/2006 1:19:27 PM
From: gpowell	Read Replies (3) of 306849

A combination of higher long term rates, higher unemployment and tighter credit hurt housing in bubble markets pretty dramatically. Very low rates in Mish's deflation scenario put a lid on the drop. I’m having trouble understanding the meaning of this post. Obviously, the price of housing will reflect the discounted value of housing consumption, and therefore will change with changing long rates, and that housing consumption demand will shift with a multitude of non-price factors such as income. I think what is not understood by many is that an aging boomer population causes a shift in demand AND long rates, such that both tend to reinforce price appreciation.

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