By soft-landing, I meant for the overall economy, not necessarily housing, which I think will continue to drag the economy. For what it’s worth I think that recession in 1Q 2007 as defined by negative GDP growth for the quarter is not likely, and more likely to happen later in the year.
As for the two spins, I have a twist on your second one …
GDP is up = inflationary pressures follow = higher interest rates = higher rents
continued, but no increase in downward pressure on housing
(inflation/rents counteracts interest rate increases).
So, housing remains 20% overvalued and still due for more correcting.
