[quote=KIBU]AN, that ‘s a very good point to take into consideration inflation. In the short term we are not seeing effective inflation yet but it can be an ugly force that make the difference down the road. Home price, in the mean time, can’t even wait for inflation to go up. Home price will be dropping faster by several fundamental factors than anything that can reflate it….. [/quote]
I wasn’t trying to say inflation will compensate for the short term decline. However, I was concurring with your first post, regarding all these government intervention, causing you to wait longer for the market to get to the bottom. My point then is that, if they keep on prolonging this, inflation might catch up to it. They’re showing that they’d do almost anything to prevent the slide from continuing, so I don’t expect them to stop trying anytime soon. After all, they already lowered rates to 0%. If the government go out and subsidize mortgage at 2%, I would think that would do some damage to the cycle.
