I tend to think that if the collapse that some of the posters foresee, happens, then both renters and homeowners will be in alot more trouble then any of us care to admit.
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Think of the 1990s. It was painful then but we got on fine. It'll be more painful this time around but we'll get on fine.
Think of Japan. In many cases the prices dropped by 2/3. In the suburbs of Tokyo prices are not even back up to 1989 levels. The great depression didn't hit. Japan had a "lost decade" but people got on fine. The Japanese standard of living is still one of the highest in the world and Japanese companies are still some of the most productive. Some companies were inefficient and were acquired by foreigners. The French bought 40% of Nissan.
Think of Hong Kong where, in many developments, real estate prices collapsed by 50%. Borrowers were under water. But now, thanks to the influx of Mainland Chinese, the economy is booming again. And Hong Kong per capita GDP is now higher than England's.
In the coming RE downturn, we'll do fine. Many will loose their jobs and move away like they did in the 1990s. But we'll do fine. It won't be the great depression.
If you think in economic terms, the RE crash, will cleanse our economy of structural inefficiencies and misallocation of resources and return us to more productive endeavors — a very good thing.
