It’s like why some people won’t ever sell a stock at a loss. They figure that it’s not a real loss until it’s realized…And in most cases, people won’t liquidate until they are out of options. Call it human pride or whatever, but it is what it is.
The difference is unlike a stock, most people in a home are really buying similar to buying on “margin”, where eventually you do have to pay back the the lender.
Loan resets aren’t the only trigger. Unemployment or the fear of it will cause people to think differently. If unemployment is contained (somehow), I’d be surprise to see pretty big price declines rapidly in the more affluent areas. The question though now is whether unemployment will be contained. Doesn’t appear to be contained right now…And that is the wildcard.
