THe thing that boggles my mind is that people just can’t think rationally when it comes to home values because they get their emotions into it.
We have to ask ourselves WHAT caused the price to spike up so drastically. So through this forum and other blogs we have discussed it at length – exotic lending, speculation, and fraud. The analogy is like boiling water, as long as there is heat the water boils, turn off the stove and it cools down to room temperature. Remove the demand caused by artificial parameters of the last few years and the prices will re-align to reflect demand caused by actual market fundamentals like income and affordability.
It’s such a simple concept yet so many people refuse to believe it because they just can’t handle reality.
Others argue the market will flatline…well, it can’t. Sooner or later people will NEED to sell. Sooner or later those Option ARMs will reset. Sooner or later speculators and others will have to foreclose because they can’t hold the property any longer. It’s common sense!
