[quote=deadzone]There are still a lot of reasons to think real estate prices may suffer going forward.
First of all, if there are major government cuts, sequestration, etc. that will most likely cause a national recession and that will cost jobs and of course negatively affect real estate.
Contrary to what Mitt Romney claimed that “government can’t create jobs”, we’ll find out if sequestration happens that government in fact is responsible for creating a shit load of jobs. The loss of said jobs will F-up the economy.
Secondly, the housing recovery that is happening now is with historical low interest rates. Rates in fact that literally have nowhere to go but up. Even with these low rates the recovery is very subdued and most of the price increase is really due to the low inventory, not due to incredible demand.
So going forward, if there is a major hit to the national economy (of which big cuts to government spending will most certainly cause), what is the federal reserve going to do to pump up the markets this time? They’ve already played all of their bullets. They’ve announced QE infinity and interest rates are nearly as low as they can go. What are they going to do if we go into recession now??[/quote]
