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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (50125)	1/18/2006 12:54:06 PM
From: SeaViewer	Read Replies (1) \| Respond to of 110194

I don't know about single family houses. But for condos, the fall could be big in nominal terms. A lot of condos in Bay Area won't get positive cash flow even if their prices fall by 50%.

To: John Vosilla who wrote (50125)	1/18/2006 1:21:13 PM
From: GST	Read Replies (1) \| Respond to of 110194

I really have no sense of how big the drop will be -- but I do agree that it will be unevenly spread in terms of geography. Hawaii is a market apart from the rest, but in the 1990s prices were hit pretty hard and the declines continued for many years. I expect there will be an initial drop of about 20% in many places and then a longer sickening slide that takes years to hit bottom. The first part will come as no surprise -- the second part might be hard to take.

To: John Vosilla who wrote (50125)	1/18/2006 2:44:05 PM
From: pogohere	Read Replies (3) \| Respond to of 110194

I guess it's just too complicated for me. I keep wondering where US consumers will get the money/credit to make the purchases they need to make to maintain their standard of living. No one yet has documented increases in income sufficient to do so, as in :"US consumer income will increase in the following manner: ________________" (fill in the blank). Unless income/credit increases commensurate with prices, consumption will fall. Since real estate and consumption constitutes ~70% of economic activity in the US, it's hard to imagine how the US economy even manages to stand still, much less fall into a decline if the credit that facilitates the real estate market simply fails to maintain the pace, never mind increase. If GM, Ford, et al, lay off more workers, if pension funds fail and are handed over to the US taxpayer to be covered at lower levels, if both service jobs and manufacturing are sent overseas, where does the income come from to pay the bills regardless of who sets the prices? see: xanga.com (today)