[quote=patientrenter][quote=irondoc] …So yes, I cheer when prices rise, even though I hope to never act upon that increase in value.[/quote]

I concur with CAR, and hope your wife gets a job soon.

But I am a little puzzled about why you would have to sell. If your house payments did not exceed 28% of household income, the old standard for maximum payments, then it’s hard to see why losing your wife’s income would force you into selling.

Now, it wouldn’t surprise me if you, like many people, stretched to more than 28%, but that just goes to show how weak the loan underwriting standards have become. Our government is inviting us (as buyers or taxpayers backstopping the loans) to take on way too much risk, and the only reason is to keep home prices high.[/quote]

[Note: none of what I’m saying is directed at irondoc, who seems to be as responsible as one could expect, especially if they’ve amassed enough savings to get them through a few years of one spouse’s unemployment.]

Herein lies the real problem with asset prices that are dependent on credit. The prices are set by those who are willing to take the greatest risks. For as long as there are buyers out there who are willing to commit 30-50% of their (gross!) income to housing expenses, those of us who try to be much more conservative will forever be “priced out.”

In the meantime, whenever bad circumstances befall those risk takers, we’ll all have to hear about their “victimhood” and those of us who were “priced out” by these idiots will be forced to pay for them to “stay in their homes” (so they won’t have to rent, God forbid!) while the prudent continue to rent.

That’s why those of us who are trying to be much more conservative were cheering on the “credit crisis” and the credit market failure. It’s not only the housing market that’s affected by the biggest, most over-leveraged risk-takers setting prices of assets, it’s all markets. Until we see the end of this high-leverage environment, we will be at risk for these dislocations/crashes.