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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: RealMuLan who wrote (54485)8/8/2006 8:05:46 PM
From: RealMuLan  Read Replies (2) of 116555
 
"Rental Vacancies peaked at 8.1% in Q3 1987.
Homeowner Vacancies peaked at 1.9% in Q3 1989.

There was a huge stock market crash in 1987 but the economy didn't slow dramatically until the 1990 to 1992 period when the housing market slowed nationally. There is a wealth effect that goes with stock market bubbles but housing bubbles involve far more real jobs and much more credit expansion. When housing bubbles burst, they have a bigger impact on the greater economy and a slowing economy further suppresses housing prices.

Fast forward to the present situation.
Rental Vacancies peaked at 10.4% in Q1 2004.
Homeowner Vacancies set a record high of 2.2% in Q2 2006.
There are many reasons to fear an even greater economic slowdown starting in 2006 based on a more dramatic rise in home prices and extreme private and national debt levels."
rebalancing.blogspot.com
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