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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Victor Lazlo who wrote (27333)	2/3/2003 5:40:10 PM
From: Silver Super Bull	Read Replies (2) \| Respond to of 36161

Victor, RE: <I don't suppose you realize that over %40 of homes are owned outright.> Actually I do. Barron's just ran an article (Jan. 20) with various statistics on housing and debt, and it does quote that statistic. It also says the remaining homeowners have debt burdens exceeding 80% value of their homes. My interpretation of this is that it won't take a large real estate collapse before many people find themselves with no equity in their homes. RE: <2. Homeowners don't come home from work every day, check the value of their homes, and think about whether to sell or buy an additional one the next day at 9:30 am.> True. But then again, homes can be frightfully illiquid when you want to sell. RE: <real estate right now is not the tech mkt of 2000. Far from it. > I generally agree...although I could easily see some real estate falling 80% in value. DB

To: Victor Lazlo who wrote (27333)	2/3/2003 6:39:39 PM
From: russwinter	Read Replies (2) \| Respond to of 36161

<2. Homeowners don't come home from work every day, check the value of their homes, and think about whether to sell or buy an additional one the next day at 9:30 am.> They may not be thinking in terms of buy-sell transactions, but they sure do think in terms of taking on additional credit and leverage. And it's the debt and leverage that's going to be a problem for them as prices erode, even a little. Further as easy credit and cheap rates (Do you think 5-6% mortgage rates are permanent?) dry up for this bubble, so will liquidity and the ability to sell should one want to move or get out. Lots of people will be stuck in illiquid, negative equity real estate. But hey, at least they have a roof over their heads, right? Big deal, so does a renter.