poorgradstudent, they’ll probably not be okay. First, is their job recession proof? Anyone in retail, sales, manufacturing, construction, entertainment, travel, is at jeopardy of losing their job or taking a pay cut. What if they get a promotion in 5 years and want to move to San Francisco, but their mortgage is $750K and their home is worth only $400K? They’ll be married to that house for decades. Nobody who buys know can assume they’ll be okay, even if they have a 30 year fixed. And what about the nagging feeling that your neighbor paid half of what you paid for your house? How much will you enjoy your house in 5 years knowing you owe $200K – $800K more than it is worth?
rseiser, when it is the bottom, I think some of us on this board won’t want to buy either. There will be real fear. The masses will not be buying. Only investors and contrarians and independent thinkers like people on this board will want to buy, because they will use logic and data, and not be driven by emotion. But the economy will be bad for many years, and even government and military jobs will be cut, so perhaps some of us won’t even have a good enough job at that time, to buy. Maybe lending will be so tight, we need 10% or more to put down. So the bottom might be a difficult time even for those of us who are expecting it.
