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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (56830)3/25/2006 3:08:11 PM
From: booyaka  Read Replies (2) of 110194
 
That would be very negative for the economy then, as most real estate sales now are still windfalls for the seller even with off the peak prices, and thus generate more credit creation. If activity slows because of stubborn sellers failing to hit a clearing price, then credit growth will slow or halt.

That's an excellent point. So even if the housing market downturn unfolds slowly, the contraction in sales volume that typically marks the initial stage of a housing market downturn bodes ill for the economy, especially given how housing-dependent the economy has become.
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