Hey, you are on fire with all those links and graphs. Love your post! Now I need to get motivated to make good posts like you.

Can you imagine if we need to get back to the trough of 22% of income spent on debt? I see a huge crash. Too many optimists here… No way will we go down 30%; we are going down hard.

Did the indentured servants run away, like our dear homeowners are bound to do? With 1/3 of mortgages I/O, 25% of homeowners having zero or negative equity, this doesn’t look good. If these zero and negative equity homeowners walk from their homes, the MLS listings could increase to over 100,000. I think you all need to start thinking about seeing MLS of 100,000 by 2008, and sales of 5,000 per year.

We have never had junk bond guidelines extended to housing.

In every past housing bust, borrowers had equity in their homes, and mortgage payments they could service. For the first time in our history, bank collateral is NOT the value of the home, but the expected increase in the value, and loans were made based on a temporary low payment without any regard to how those payments would be made once they increase 50-75%, and make up 90% of the borrower’s income.

My estimate for Summer 2008 MLS in San Diego: over 100,000 homes. Sales will be 2,000.

Schahrzad Berkland

greekfire, I wrote it and then realized it was in your name. An unintended pun.

Your graph clearly shows why the Fed or financial sector (as another poster wrote) cannot save this housing bubble. The trend we’re on requires a borrower to pay ever increasing percentages of his wages on housing. That is not sustainable, nor is it healthy.

We should all root for housing to fall 50%, so we can use our nation’s capital for research, development, production, investment, education, instead of consumption of homes.