Brian, that is a good explanation I think. Taking it a step further: maybe rising interest rates didn’t drop prices in the 80s because there wasn’t much forced selling, and so everything just kind of came to a standstill. But perhaps rising interest rates in an environment of forced selling would have very different results… ie, in that situation the rising rates could lead to lower purchase prices.
So I think we’ve identified why this time could be different — how a rate increase could lead to falling prices even though that hasn’t really happened previously. But I still don’t think that this is a given, because the govt can do a lot to halt the forced selling (as we’ve seen).
