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To: orkrious who wrote (149089)	2/5/2002 8:50:32 PM
From: pater tenebrarum	Respond to of 436258

well, location is obviously one of the most important factors in evaluating RE, and some areas will weather downturns based on that better than others. but very high end residential properties have taken a hit almost everywhere as far as i know, and commercial real estate is in its biggest slump in eons (especially in places like SF due to the high tech bust). let's not forget that the residential housing market in general has still been in full bubble mode in terms of the associated credit creation until very recently. the bust works its way through the various layers, just as it works its way through the various stages of production in the economy. the ends of the market that depend either on lower quality credits or on stock options income are definitely in disarray already. the 'hanging in' reminds me a bit of how the credit card cos. were hanging in by creating new accounts faster than old ones defaulted. RE is also a 'slow' market. you may see a house somewhere offered at X dollars, and think, why, it's still as expensive as last year. but who knows how long it has been on offer? these things take time in RE. what is beyond doubt is that housing inflation has raged for years now, and has been fed by a huge balance sheet expansion on the part of the GSEs. what's also beyond doubt is that with 67% of US households now 'home owners' (i use the term loosely, since home equity ownership is at an all time low concurrently), the market is clearly saturated. saturated market, huge debt loads, inflated prices, the recipe for disaster in short.