i believe RE will get killed, but pls be wary of those comstock guys. they're a bear fund, so they only look for negative news. they're usually wrong, when they're right, they're right when when hardly anyone else is.
I don't think food is in the core either. It's the dampering of buying power of wages that is similar to a tax increase. If people have a couple hundreds dollars extra a month to spend because energy falls significantly then there will be more money to go into core items. As far as rents go I would guess that 12 million illegals in this country have something to do with holding those up. If for some reason we stop so many from coming in, rather then a few hundred thousand a year to maybe a few tens of thousands then that will take some pressure off of rents. I think the extra spending will create more jobs and that will put more pressure on the Fed to raise rates. I initially believed that the Fed was through with propping up bubbles but maybe they are not after all. John
The RE boom isn't fueled by wage growth. Middle class wage has been stagnant in the past few years. The question is when will speculators and those who can't afford mortgage payments sell off their properties? The market will stabilize thereafter.
cut rates, as will happen in 07, it wont stop prices from going down, but will provide a cushion. 50% is just too much, 20-25% drops more reasonable given that we are down 5-10% already
I have to chuckle at this statement. Maybe on a national basis 20-25% and a bit of a cushion from a lower interest rate environment. Not uncommon to see 40-50% retracements in CA or other hot market areas. My area ALREADY has come down approximately 20-25% from the highs a year or so ago. Homes that would have sold easily in 3 days or less, multiple offers, for 485-500K, 12-18 months ago, sit idle with low ball offers at asking prices in the 370-425 range. The bloom is off the rose. Market psychology has changed around here.