They are convinced that if they don’t buy a house, NOW, that the price will magically shoot back up to late 2005 prices.
Home prices won’t shoot up that fast, but interest rates will shoot up to Jimmy Carter levels that fast. And that is part of what’s fueling the buying going on right now.
When inflation hits, it’s going to be insane. With this big a decline in the stock market, unemployment HAS TO go up – into the 15-20% range for states like California. The Fed’s will simply start printing money if that happens. They’d rather risk stagflation than deflation.
