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

To: Amy J who wrote (25550)	12/1/2004 11:47:15 AM
From: John Vosilla	Respond to of 306849

<Right. Next question is, how many defaults does it take to bring down the system? 5%, 10%, 20%, 30% ?> I think that will vary by area, property type and average debt levels of the ownership pool. More than likely a glut of new high end condos going up in places like Miami and San Diego many of which are being bought by highly leveraged investors that will never be able to get adequate rent to cover their costs will take a big fall. Then take another overpriced market like Santa Barbara without much new construction and a much higher percentage of long time owners without mortgages perhaps might not fall that much. I guess the only hope of the bagholders and insurers of all this debt is the bubble does not burst in too many places at one time.