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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Tradelite who wrote (63472)10/7/2006 5:15:03 PM
From: Travis_BickleRead Replies (1) of 306849
 
The problem is that in the bubble areas speculators bought with interest only or option loans without much of a down payment, so if they price it to sell they will get less than they owe on it.

Which isn't much of a problem if you have a bunch of cash sitting around but people who are dumb enough to put themselves in that position probably don't have much in the way of liquid assets, particularly the ones who bought several condos or townhouses.

So these people are already finished, if they price it to sell they are broke now, if they rent it for less than carrying cost they will lose more money in the end but at least they keep the dream alive for another year.
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