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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (14135)	1/28/2002 6:15:11 PM
From: AC Flyer	Respond to of 74559

>>however, the leverage argument goes the other way as well<< I agree. It's certainly possible to get caught out by fluctuations around the long term trend. This happened to many people in the Boston area in the late '80s/early '90s who saw their equity wiped out. Nevertheless, residential real estate prices are very "sticky." Homeowners will only sell at a loss if they absolutely have to. And when prices do fall, they (usually) don't fully retrace the prior run-up. In the Boston area, prices doubled in the second half of the '80s and then fell 20% - i.e. a 40% retrace (rough numbers of course, better in some towns, worse in others).