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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Lizzie Tudor who wrote (86507)8/22/2007 11:09:36 AM
From: John VosillaRead Replies (1) of 306849
 
'But high end is going up, in CA and probably elsewhere and that means this real estate crash is not going to have the widespread effect everyone here seems to think it will. If the high end doesn't crash, there won't be a recession imho.'

This is something I mention quite often. What happens in NYC, Boston, DC, LA and SF will dictate the severity of how this plays out. My guess is the jumbo credit market pretty much dictates a decent downturn in prices and what happens in the economy and with interest rates can feed on that or lessen the blow somewhat. This happened in 1990-95 and wasn't the end of the world. Actually the global economy can boom after recovery from a modest recession.. With all due respect I doubt most 20 or 30 something workers in SV can really come up with the required 20% down payment or afford the monthly payments on $800k amortizing mortgages to keep the party going. How many really have $200k down and make $300k a year with excellent credit? This doesn't take into account many 35-55 year olds way extended already on credit with little equity to show for their years of hard work other than a nice 401k if they work for the right company. Debt slavery till retirement isn't a given. When will these people revolt or leave the fast lane in droves?
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