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

To: Metacomet who wrote (59780)8/11/2006 5:26:19 PM
From: KeepItSimpleRead Replies (1) | Respond to of 306849
 
Simple. Lax lending standards that allow people to "pay" beyond their means.

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How can we reconcile the phenomenon of home price inflation with the obvious stagnation to decline in incomes?



To: Metacomet who wrote (59780)8/11/2006 5:27:17 PM
From: Elroy JetsonRead Replies (1) | Respond to of 306849
 
Manias are usually fuelled by debt, not income.

In the longer run, falling incomes don't support higher home prices.

In the short-term foolish people will eagerly pay $800k for a $350k home, with borrowed money.

Later, they can sell their $800k home for $350k.

Act in haste, repent at leisure.
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