I agree that the worst drops are yet to come. But to say price drops will overshoot the price of rentals is ridiculous. It will happen only if there is a severe credit crunch. I doubt that foreign countries and Fed will allow that.
savings (downpayment amount), income and interest rates (income/interest rates is a nice proxy for monthly payments) alone determine housing prices in the long run.
house is a social need. you must be smart to be a software architect. home is not a financial asset. i know it costs a lot of money to get one. if you cannot afford to take a loss on your house do not buy it.
a sudden downturn would be so severe that vested interests in this country won’t survive. my bet is that we will settle for 10 years of slow growth with above average inflation.
i do not think debates over Mexican immigration reflect racism. I am neither White nor Mexican. I think the scale of Mexican immigration has consequences for American society beyond real estate prices. It is a valid topic for debate.
my fear is that housing bubble will deflate slowly over a decade. we may avoid a severe recession. but the housing bubble will slow down the economy for the decade.
If commodity and energy prices shoot up any further we might slow growth + inflation = stagflation
i am an immigrant myself. i am not opposed to Mexican immigration as long as people understand the consequences. Influx of 1 million plus low skilled low wage Spanish immigrants from Mexico will transform USA into an improved version of Brazil.
The only use to American society is that they provide cannon fodder for US infantry should the likes of Bush want to conquer the Middle East.
