I understand where you are coming from but I just cannot support the argument. While the builders in 4S have managed to prop up demand, that is not going to be the case forever. Indeed there have been declining resales in 4S and to neglect the argument that there is currently distress there is naive. It simply has not reared it’s ugly head and it will not as people who live there all have decent jobs.So as loans reset, they will slowly donate more money to the lender. I believe that there is alot to learn from previous prognostications from pundits. Guys like Alan Gin who always seem to try to be careful with outlooks but who always (in the past) landed on the optimistic side that was speculative when compared to the pessimistic side which appeared to be factual. It will take awhile for 4S to go full tilt unless there is an event that will upset things such as rapid unemployment. However, I think that the secondary market crunch will indeed have severe ramifications for potential 4S buyers. Once more, this will not show up immediately. It will take awhile. I also think that 4S has some potential for heavier tilt because it is not established, I do not see heavy equity stakes in the majority of the homeowners. This is an important variance when comparing it to seasoned neighborhoods where there are people who will just ride out the storm.
