SD- Your first hand info is really valuable and thanks a lot for that.
Though the housing market can be balanced on a short term basis until something gets kicked out from under it.
One scenario would be a large increase in mortgage rates. With the way the Gov’t is spending and may tap out on spending power soon that is a pretty likely scenario with the 10-year tie to mortgage rates. Couple that with lenders that once they get back into the lending game will want risk priced in that will put more upward pressure on rates.
Now a second and more devastating scenario would be the acceleration of the deflationary credit collapse we are seeing becoming a depression. A lot of unemployment and wage destruction comes with that and so will more heavy asset value declines. The second scenario at this point seems highly likely with the way the global markets are treating a loss of trust in the global banking system.
As we see it every new move by the Central Banks seem to take more people out of the market and there are many more possible moves that could kick the balance out from under all RE markets.
