“As long as lenders are dumb enough to allow this, it will continue.”
And their customers like Merril Lynch will continue to allow them to do that??? I think not…no in fact I know they won’t because they sure as hell didn’t let New Century and Bear Stearns continue to sell them garbage rated and top shelf now did they? NO.
“At some point, if prices drop a lot, then even the homeowners who bought 10 years ago will get restless and call their congressman, and then B and/or C start to kick in.”
And then who is left to sell their house to because their wages have stagnated and now they are going to be taxed even more to death??? Tell me, who are boomers going to be sell their houses to when the prices drop and they demand that the Govt do what exactly? Hold a gun to every Gen X and Gen Y to buy an overpriced asset and become a debt slave? I’m not sure how that can be done exactly.
Your last assumption assumes that the Chinese won’t depeg the Yuan. That is a big assumption because their economy is choking on all of the dollars they are buying an putting treasuries.
Look PD, house prices are going to correct significantly no matter you and DaCounselor like to believe is in the offing to save it. I don’t know why this is so hard for certain people accept…well, other than those who are in mortgage debt up their eyeballs and waiting for that reset to finally do them in.
If it doesn’t, well then I will just keep on renting at half the cost of owning.
