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On the one side of this discussion it can be said that you will likely not see a burst but instead a gradual decline because housing is by its very nature not a liquid asset. People live in homes, unlike stocks where a burst and rapid decline can happen in one day.
On the other side of this discussion it should also be pointed out in the last five years you have a seen a huge increase in very risky mortgage lending. Things like ARMs are nothing compared to the rise in interest only loans, 6 month teaser loans, multiple mortgages, home equity loans being tapped for vacations and other crap. The other shoe will drop on all these schemes and when it does it could create a situation that has no historical reference for people to say, "in the past when this happened...."...
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