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

To: Les H who wrote (151188)	9/27/2008 2:15:22 PM
From: neolib	Respond to of 306849

The problem is the change in ratings prompted lots of money to need to change hands and this prompted lots of people to need to sell but not buy. If the only thing that happened was that those holding the asset now had an asset priced differently, and they simply continued to hold it, not much would have changed and we would not be in a financial crisis. I own two pieces of RE, and they have undoubtedly fallen somewhat, but gee, it has not affected me at all. The fraction of mortgages that are in default is not high, and even those are not worth zero. Compare that value to the total value lost to owners of real estate for example. The ratio is very roughly the decrease in real estate value of mortgages in default to the decrease in real estate of the entire country from the theoretical peak. The ratio can't be more than a few % at worst.