Roughly the TRUTH

Did anyone seriously think this would last forever?

Many recent home buyers bet the house (literally) on expectations of continued low interest rates and dramatic appreciation gains. Many believed that a new market reality was emerging. This was due in large part to factors associated with ‘globalization.’ Here the prevailing wisdom said that greater liquidity in capital markets would put a cap on inflation concerns and that low rates would persist ad infinitum. Wow; they couldn’t have been more wrong. Energy, massive federal debt, and politically destablizing factors were somehow left out of this equation. Here are a couple of thorough articles that may finally help put this argument to rest (you can tell that ‘PIMCO’ - in the first article - has a good deal of experience here):

Bond giant makes ‘good case’ for real estate slowdown

Foreclosure Inventory Up Drastically, Report Says

I couldn’t have said this better myself…in fact, I probably wouldn’t have even come close. If you’re in a pinch there are a number of resources I’d like to recommend…I’ll discuss those in a later post though.

[UPDATE: 03.02.2006]

The evidence mounts: Home-price growth hits the brakes

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