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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (25365)	11/22/2004 3:51:59 PM
From: Elroy Jetson	Respond to of 306849

The last real estate downturn, from 1989 to 1996, was softened by mortgage rates declining by roughly 1/3 during that period. home.pacbell.net To achieve the same level of support for a real estate price decline from today would entail Adjustable Rate mortgages declining to 2.7% from 4.05% and Fixed Rate 30 Year mortgages declining to 3.89% from the current rate of 5.84%. Essentially below the levels last encountered during the Great Depression. To the extent that this seems implausible, then this downturn will be harder. Another factor is that there are more excesses in the general economy to dispose of than there were in 1990. The economy is far more indebted today than in 1990 and to simply achieve our current level of activity the economy was recently fed huge amounts of government debt and monetary expansion. To this extent there is less to fall back on. .