So as anyone here can see, the statistics are staggering in favor of people coming up with 20% down. I gave up long long ago trying to figure out how/where people come up with money. It is the same thing as other facets of the real estate market…. Why are people buying right now. Why do people do what they do? It doesn’t matter right?
As far as homebuilders stocks going up… well many of those stocks were at or near book value. I know for a fact that KHOV is more then a little distressed and they could very well go under.
Your strategy is quite sound DW, you will do fine as long as the rate of housing depreciation outpaces inflation.
Those that contend, “where will people get the money for a downpayment” and nobody can afford a big dp, well I don’t really buy into that. The market will go down simply because of a lack of demand. While the demand is lacking because of prices being out of whack, it doesn’t imply that people don’t have the money, it is simply that those with the money are being prudent. Also yes a component of that demand that helped inflate the bubble, heavily financed buyers has for the most part been removed, and will hopefully stay removed.
