Nice addition, Daniel. That report seems well thought-out and comprehensive. I am not an expert in housing or economics, but I do have some comments.
1. PAGE 20: The author equates rising monthly mortgage payments (due to resetting ARMs) to increases in gas prices in 2005. He basically said that rising mortgage payments will cause pain, like the rising gas prices did, but that life will go on. Well, no s$#% Sherlock! The problem is that resetting ARM prices could present SUBSTANTIALLY higher monthly costs that would dwarf those of gas prices. Oh, by the way, gas prices (and utilities) are still up- so add those to the higher mortgage payments. One more thing- wage growth is not keeping pace with all of these rising costs. Time for a new credit card or refi.
2. PAGE 32: The author essentially states that purchasing residential real estate should be a long term investment, and those that treat it as such will fare well. The problem is that a number of folks bought residential real estate either as an investment property or to live in for the short term, or both. I wonder if this wisdom was also applied to those who purchased at the height of the early 1980s bubble?
Although the author does a good job in using data to support his arguments, I still feel that his viewpoint is too optimistic.
