It is the law of unintended consequences in action. If RE was the economic engine of the last few years, it’s decline should be assumed to have a corresponding effect on the general economy. Several of the bulls have pointed this out, and to that extent I think they are correct. Wishing for the 50% decline is equivalent to wishing for very hard times for a lot of people, including people who currently do not now own a home or who are not employed in the RE sector.
Those of you who intend on timing the market for entry or re-entry at the bottom should probably plan in advance for how much more difficult the process will be. You will need a downpayment, you will need good credit and verifiable income and employment. Interest rates may be significantly higher, thereby increasing your monthly payment beyond what it would be under the current interest rates. I would not anticipate it to be that easy for most people.
Right now, a good way to invest your money may be to invest in your own skills and to increase your employability, ’cause you’re going to need a good job to buy a house when everyone else is on the ropes. And I don’t say that to mean you should run out and get a real estate license, either.
