I beg to differ. Even though what we are expressing are just opinions. The first two cycles that you mention, I wouldn’t classify a bubbles. There is no argument over the present one as it is a bubble.
Most home owners are in and out of the market every 5 years. If you have a no doc I/O loan, your going to walk in the next two years. If you don’t walk, I can almost guarantee a divorce in 3 years and then a forclosure. Money problems will ruin any marriage.
The baby boomers are starting to retire, and when LA says that crime has dropped 25%, its not better law enforcement, its 25% fewer young people to buy baby boomer houses.
To add some levity to the discussion, the Titanic was a big ship that turned slowly.
What we are looking at here is, people have borrowed 6 trillion dollars in the last 5 years. Who is holding the paper? I just hope its not my IRA!
If you look back at history, most of the loans that defaulted in the 1930’s were interest only loans. When the poor sucker went to refinance, the bank would refuse to refi. It didn’t have the money to say yes.
