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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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For a topic, what about ways inventory might be deal with? I was thinking that when it is obvious the bubble has popped there might be a sudden push to expand green space/parks or mass transit. In the Nova/DC area where I live I can think of some good examples like expanding the orange line of the metro west which would require buying up land near I-66 that has houses on it “destroying” the inventory.
Ways to deal with inventory?
1) sell to LLC’s, Hedge funds
2) sell to time share overseas investors
3) bulldoze
4) convert to affordable housing for inner city workers (teachers, police, fire, city workers)
5) convert to affordable housing section 8
Your #5) choice would really be great for recent McMansion buyers’ “investments”!
interest rates are really rising fast now .. currently .the ten year yield is 49.40…. in miami ..we have 20-30k condos still under construction ..80% to investors ..these investors dove in when mortgage rates were still 5% … i can’t imagine the condo bloodbath that absolutely will occur here in downtown miami … its going to be nothing less than spectacular
It’s going to get ugly here in West Palm Beach as well. More areas have been marked for condos, however, I doubt all will be built. Miami will be “Ground Zero” for the condo market implosion.
There are several more condomania “Ground Zeros” dotted up and down the West Coast, as well (Vancouver and San Diego, to name two)…
You are correct. I was referring to Florida, I should have been more clear. San Diego will lead California.
Rising prices and a shortage of housing lead to gentrification, rehabs, and teardowns. What would be the effect of protracted falling prices and a glut of housing:, ghettoization, deferred maintenance, and abandoned houses? What areas/markets are most likely to be affected? Presumably the least desirable housing by whatever measure will be the worst affected. Will recently gentrified neighbords be the most likely to slide back, or will it be far outer suburbs or condos that will be filled with n’er do wells.
I think things will continue along their current trajectories, but suffer a an equal “decceleration”.
An area that’s humming will keep going but slow significantly.
An area that’s got no momentum will slide a bit.
An area that’s already on the downslope will fall off the cliff.
I am specifically referring to “gentrification” and “rebirth” neighborhoods. I do have something invested in this as I’m in North Park (San Diego) which is a “rebirth” neighborhood. A lot of yuppies with or without kiddies have moved in and we all want our places to look nice. I don’t think a major housing market downturn will change that attitude… it may change the resources (thus slowing it)… but not the attitude itself.
It is the resources that are the issue. I agree on your analysis with the proviso that resources are likely to be scarest where the gentrification train has just gotten started in the last year or so. People who bought or refinanced in the last year or two are the most likely to be caught upside down and have no money to finish refurbishing or turning into reposesed houses. A mismatch between house prices and incomes doesn’t by itself change what homes are most or least desirable, just what incomes live in what houses. There is a degree of mismatch at the end of a bubble because nobody can buy a house without equity from selling their previous house. This, IMHO is why we’re still seeing pockets of increase in median price. Nobody is getting on at the bottom step to the stairway, but it takes awhile for people at the top to stop moving.
Jim, my vote is its all gonna be about jobs.
“If people suddenly can’t get an interest-only loan because the feds are clamping down on how many are out there, it’ll drive the market down,” says Maryland Association of Mortgage Brokers Thomas Shaner, who adds that it also would impact home values. Washington Post
Does this suggest that the proliferation of exotic mortgage products may have artificially inflated home values?
Ben,
Is there any way to create thumbnails on the photos page (rather than having to view as a slideshow each time)?
A co-worker of mine told me about a street near the Art Museum in downtown Philly where nearly every house has a “For Sale” sign. If I can get down to that area sometime soon, I’ll be sure to bring along my camera.
Will we see an “echo boom” sometime later this year or next year?
I wouldn’t be entirely surprised to see a scenario with an echo boom (i.e. suckers rally) in 2007. Echo booms are not uncommon in bubble markets and are typically characterized by a boom > small crash > false bottom > shaky boom w/a smaller peak > full crash to the bottom. It happened with the NASDAQ in 2001. It also happened with the 1929 market crash, where the Dow Jones increased by 38% between Nov. 1929 and April 1930, before continuing its crash.
If we combine modestly falling home prices in 2006 with interest rate cuts in late 2006 early 2007, it could bring in some buyers priced out/waiting on the sidelines that “missed their big chance the first time around”. (BTW Don’t catch a falling knife!)
What do you think?
“It also happened with the 1929 market crash, where the Dow Jones increased by 38% between Nov. 1929 and April 1930, before continuing its crash.”
And it is happening now with the Dow before it continues its crash…it’s just that this time the time scale is so large that most people don’t recognize it. When the housing market goes, the stock market will, too.
Kim,
We seem to agree on this. Do you have any good references on the long period of time that it takes for crashes to play out?
Cheers,
GS
I am not saying that crashes take a long time to play out. Each crash is different, it is the pattern that is important. I like the book “Conquer the Crash” by Robert Prechter. He has a graph showing a scaled comparison of the rise during the 1920’s and the rise during the 1980’s and 90’s and when you scale them to the same size the patterns are amazingly alike, just on a different time scale. The crash is not coming out in the same time scale, it is more drawn out, but the pattern is the same: a drop, followed by a considerable rise, and ending with a long fall, which we have yet to experience in the Dow. The crash in the 30’s took 3 years, and we don’t know how long this one will take; it could take longer or shorter, but it is important to know that a crash is coming. Some people on this blog have enjoyed the benefits of the bear market rally, and that is great for them, but I think they should consider getting their money out now before the next phase of the bear market begins. It is a mistake to think that the bear market that began in 2000 is over. When manias are truely over, the whole world turns against that asset, and that has not happened with stocks, at the true bottom no one will recommend stocks, except perhaps ones that give a good return in dividends. At the true bottom of the RE crash, no one will be saying that RE will appreciate by so much each year, etc. When I say the whole world, I am talking about the media and public opinion, there will alway be contrary thinkers.
I should mention that I am not saying that all stock manias have to conform so closely as the 1920’s and our recent one, but they do follow certain patterns. There is a lot of information online and in books about the Elliot wave theory if you want to know more. Elliot Wave International has an advertisement on this page, they are my favorite web site on the subject, I have been a subscriber of their’s for several years. They often err on the side of caution by giving warnings too soon, but I think they have a good grasp of the large picture.
Kim, I really enjoyed your post. I wondered how much you think the falling dollar will change historical bubble experiences.
The dollar isn’t changing the bubble experiences, the bubble is changing the dollar. The RE bubble has increased the money supply and put “spending money” into the hands of people through refinancing, and not earnings or an increase in real wealth. This increase of money supply caused by the bubble is a large part of what has caused the dollar to drop in my opinion.
I think that as RE falls the stock market will also fall, and we will have a general deflation, such as Japan has experienced, but probably more rapid.
I think that during the deflationary period the dollar may rise, depending on how much deflation other countries are experiencing. If other countries are not experiencing deflation and we are, then the dollar will rise.
consequently, the market has been rallying since negative news of R/E has been seeping out. Perhaps the market will surge AS the prices decline (as cash quickly pours into the market) then they both may fall in unison (as investors pull out cause of overvaluation of stock values)
I cant see both falling at the same time.
Can someone give a background of what happen during the last R/E crash in relation to the stock market?
Why can’t you see RE and stocks falling at the same time? It happened in the 1930-1933 crash, and I believe that that was the last national crash in housing values, the ones since were localized.
I think that’s what’s been happening in San Diego since 2004. The market was through the sky until summer 2004. In the fall, inventory really piled up; listings have been up YOY and sales have been down YOY ever since. We had a mild spring bounce in 2005 which brought prices back from negative territory (from peak through winter), and it’s basically stayed there (pretty flat) ever since. I think this was our DCB. Lots of complacent buyers who believe the “high plateau” theory. Next step is off a cliff, IMO.
It seems to me that in the past few years the price of lots has generally gone up at a faster rate than the combined cost of labor and construction materials. I was once told that typically a completed property’s cost - the structur and the land sells for about three times the cost of the land. So if indded lot prices are increasing disproportionately, either the 3:1 ratio changes or bigger/fancier houses get built. I guess this could help explain McMansionization.
How will the spike in l-t treasury yields impact the housing market?
It just spiked up past 5% on the strong jobs report, then fell back to 5% even and it looks like it has flattened out there (maybe with the help of some govt stabilization efforts!).
http://tinyurl.com/aemkc
I agree that the topic of an echo boom and likelihood of it is an interesting topic.
Simmsays…
http://www.AmericanInventorSpot.com
AmericanInventorSpot.com
Is the Phillips curve dead, or just hibernating? In the latter case, the drop in the UE rate must be setting off inflation alarm bells at the Fed…
ECONOMIC REPORT
Wage gains tame as payrolls rise 211,000
Jobless rate falls back to 4.7%, lowest for cycle
By Rex Nutting, MarketWatch
Last Update: 8:43 AM ET Apr 7, 2006
WASHINGTON (MarketWatch) — Wage raises were slim in March, despite robust hiring and a decline in the jobless rate to match a five-year low, the Labor Department reported Friday. U.S. nonfarm payrolls rose by a better-than-expected 211,000 in March while the jobless rate fell back to 4.7% from 4.8%.
http://tinyurl.com/pu4sl
P.S. I have heard some of you argue that the cheap Asian labor has kept a lid on our wages, and I concur. However, the low UE rate is also indicative of a high level of capacity utilization and resource demand, which are consistent with high levels of price inflation in resources and basic materials…
The markets seem to fear the ghost of the Phillips curve / NAIRU debate that used to drive the Fed’s decision process…
http://tinyurl.com/cb79u
Getstucco–regards the cap util rate– yup true– when we actually made stuff. But not quite the same constraints for barristas, checkers, and realtors.
I guess the markets are just afraid of ghosts, then?
But here is a more upbeat view:
MARKET SNAPSHOT http://tinyurl.com/fh68u
Stocks boosted by March jobs report
Wage gains tame in March as payrolls rise 211,000
By Mark Cotton, MarketWatch
Last Update: 9:40 AM ET Apr 7, 2006
NEW YORK (MarketWatch) — U.S. stocks gained in early trading Friday after a March employment report confirmed the robust health of the economy, but also soothed interest-rate fears as wage growth came in weaker than expected. The Dow Jones Industrial Average ($INDU: 11,185.28, -31.22, -0.3%) rose 45 points to 11,261.
Better update that story more quickly, folks!
“The Dow Jones Industrial Average ($INDU 11,157.66, -58.84, -0.5% ) fell 31 points to 11,185, off an early high of 11,269.”
I never accepted that the Phillips curve was dead. Rather, it is part of a 3 dimensional foil, with the third dimension being the cost of raw materials and the “inflation” point applying to finished products. My 2 cents anyway.
Would houses fit your definition of “finished products”? How about commercial RE (US & Chinese flavors)?
The bubble stock levee system is starting to leak…
http://tinyurl.com/o7skt
Let’s look at the rental markets. I say this because if FBs or people sitting on the sidelines, as is advised here, are going to flood the rental market, rental prices will not be remaining fixed.
There are some caveats when doing rental/ownership ratios. The rental option works for singles or DINKS in condos. But there are few 3 and 4 bedroom apts out there, fewer homes for rent. And can you really do an apples/apples ratio for a colonial with a big yard in a good school system. As discussed on other threads, good school systems are often in “rental lite” areas. If we assume the overleveraged do not just include 20 somethings, where the seller is going to is going to be part of how fast this happens.
Another factoid that has impact: A lot of landlords just plain aren’t into kids…in a tight market those DINKS or singles are a much lower risk….everybody’s working! Shortages in options to move to will keep that seller in that home longer.
I think local rental realities will mediate how quickly this thing blows. How one deals with this bubble could be impacted by the local rental market.
The rental market will be largely unaffected: every FB turning to rent vacates a property that must in turn be rented or sold. Sideline people either move Rent->Rent (no effect) or Rent->Own (rental prices decrease.)
Rent costs are the real market price - ownership is mere speculation (well, actually, ownership of real estate has some other import benefits)
Another thing I’ve been pondering….Will the smaller home soon become king?
Where will the McMansion-ites be going? (Home style) McMansion-ettes? I.E. 1500 ft Empty nester homes are still being stocked with marble and high end cabinetry.
Will granite still reign but in a smaller kitchen?
With oil prices rising, will older homes w/7.5-8′ ceilings become more desirable?
I seem very stuck on where people will be going to in this panic. Anyone care to prognosticate?
I think you are right on. I know that I am thinking that in a few years I would like to have a custom home that isn’t too large, we could afford it now, but we will wait for the bubble to blow over. Less square footage means lower heating bills and taxes. Lower ceilings not only have lower heating, but are easier to maintain, I don’t like painting or dusting 15 feet up on a ladder, which is what happened at our last home. 9 foot ceilings are the max as far as I am concerned for our next home.
To those who are knowledgeable about foreign
R/E markets: What is the trend in Europe,
Austrilia, NZ, etc? Does the concept of the
“McMansion” exist? Or is Europe and OZ already
ahead of the curve?
Same here. Smaller home (do we all really need 400 sf foyers???), larger lot, no HOAs. We would also prefer to build our own energy-efficient home. Oh, and single-story. These McMansion ‘hoods will be the next ghettos, IMHO.
I would like others opinions on if they plan on using RE Agents in the future. I know I have grown to loathe them. I don’t want to support anyone who has been a cheerleader for this bubble.
Perhaps we can start a list of agents and appraisers who have been vocal about/against the bubble so we can give our business to the right people?
1989 vs 2006
we found out investor/2nd home was 40% vs 18% ? in 80’s
anymore comparisons ?
The soft landing in Las Vegas — it’s done. We had 2 months of miniscule declines, and now apparently we are appreciating again. Here’s the link:
http://www.reviewjournal.com/lvrj_home/2006/Apr-07-Fri-2006/business/6747373.html
I had a bet with some guy on this. LV was supposed to be down 10% by now. But it’s up. So I win the bet.
Your bets are too short term to say whether the landing was soft or not. I will bet we won’t be hearing much from you a year from now (sorta like Beaconst, who used to lecture regularly here about how strong the Mass housing market looked from inside the confines of MIT’s ivory-covered walls…)
MIT’s ivory-covered walls? Amusing image, but “poured concrete” is a little more accurate. I think you’re confusing it with that inferior little school up the street…
I was speaking figuratively…
I got that (hence the “wink”.) Figuratively, it would be either “ivy-covered walls” or “ivory tower”.
Haha I am still here! Boston rules. Cambridge has slowed a little, but housing is still looking strong. In fact, MIT is adding another 150 undergrads to its population in 2007, plus about 150 grad students, and a couple hundred support people. Rents are up 10% in the last 12 months too.
where are you getting your rent increase numbers from?
I just saw CPI rent increase data for 2004-2005 of something like .3% for Boston…what changed in the last 12 months to increase rents by 10%, or are your numbers including heatingbills?!
To Upstater,
We all agree that we have an aging population. Where they will locate no one knows but as they get more immobile there is no question but that they will relocate near their children. The elder population can’t climb stairs so the two story CA homes will become tomorrow’s white elephants. Housing for the elderly needs to be near medical services and stores (drug, markets) as they drive only short distances and usually not after the sun goes down.Condo units with elevators will work too. Warmer climates will fare better than colder climates, smaller houses are easier and cheaper to maintain (paint, carpet, furnish, utilities are less), cheaper to buy and taxes are less.
One thought on that, Salinasron, I know us boomers have “ruled the world” and will do everything in our power to keep things rolling. Still I remember my childhood when grandparents often lived with the parents and children. I’m wondering if seniors maintaining their autonomy will be another lost benefit of the contracting economy. Time will tell.
Vegas may be having a rebound but wait till the summer heat arrives. Plus, what types of jobs beside housing and service sector jobs are being created. Housing goes down and poof go the jobs. Next phase is gonna be a state income tax or high property taxes to pay for the infrastructure of roads, schools, police, fire, hospitals. Mart my words, it’s headed your way. Wait till the service people loose jobs and watch the welfare rolls rise. Nope, you are going down, down, down.
LVlandlord — ever heard of a “dead-cat bounce”?
Sure I have. But I’m looking at the fundamentals. Constant inflow of population, and diminishing land.
Have you been to Las Vegas lately? Have you driven around the city? Where there were miles of empty land a few year ago, there are now only pockets of land left. And on those pockets, they are building with the smallest footprint possible. Three story homes with no yards or sidewalks. We used to have plenty of space. All of a sudden, we are running out of land.
Look around at night. The little twinkly lights go up the sides of the hills on all sides of the city. There are no more blank spots. The land is used up. There’s no room to build.
Regardless of what happens in the rest of the country, Las Vegas has suddenly run out of land.
I’m predicting a second wave of hyper-appreciation, not starting right away, but in 1 to 3 years. And only in Las Vegas.
LV….I guess thats why they call it sin city because you ain’t telling the truth pal…
I suggest you go up in a helicopter and take a tour of the Las Vegas metro, then come back and tell us there is no land….
LV landlord,
Density does not equal high price; after all, isn’t Mexico City rather crowded, and Bangladesh doesn’t exactly have a small population either. It’s not just the number of people who want to live somewhere that will drive up the price. It’s how many want, and can **afford** to live somewhere that will drive up the price. You know as well as I do, that suicide loans enabled more people to “afford” buying a home. Perhaps these loans really are going to be a permanent fixture in home buying, but I’m betting my money against it. It requires prices to forever increase, and we’ve already hit the affordability ceiling in many places even using these loans. Next comes the foreclosures. Give it time.
And no, I’m not wishing ill upon all these soon-to-be foreclosed families. Just seeing what should be obvious to anyone willing to dig deeper than the “running out of land” theory.
Las Vegas isn’t Mexico City or Bangladesh. Las Vegas is the greatest city in the world.
Anyway, it doesn’t matter to me whether you believe me or not. I report the situation as I see it. You can believe me or not. I don’t care.
God you are so right LVLandlord! I say, buy a couple more places and show these megative nancy’s your profits next year!
Three even!
Hey LV, wonder if you might have heard of my old boss out there. Sheldon Adelson? He went out there after selling our company to the Janpanese. It was never the same w/o him.
LVL, do you ever really try to think these things through? If LV truly were to “run out of land”, all those construction jobs would disappear just as surely as if sales suddenly stopped.
What will happen to many of the McMansions recently built in flood plains up and down the San Joaquin Valley and the Sacramento area? Arnold is trying to get money to fix the levees. However, it might be a little too late (2nd New Orleans?) with a month of straight rain, saturated ground, Sacramento river at peak, all reseviors (sp?) full, and a lot of snow to melt and come down from the Sierras. Should make for an interesting time. A sneak preview was there last week as 2 levees broke and flooded some areas of Merced. Might reduce the McMansion oversupply
Need 2; Knee jerk reaction to Katrina….All the big earth m oving contractors want the goverment money (ie..Granite Const.)
They have done a pretty good job with flood control realy….Particularly with Folsom Dam…
Ben, how about a “Devil’s Advocate” thread?
Is there objective evidence that we are willing to acknowledge that bubble proponents are wrong about a hard landing vs. soft landing or even continued housing appreciation?
Topic: Savings=Investment
According to basic Econ 101, S=I, or savings = investing.
Under classical economic policy, a current account deficit is spending more than investing. A decreasing current account deficit leads to a falling dollar.
Additionally, since we have a current negative net savings rate, that means there are lots of foreign goods coming in. An increasing savings rate would lead to more investment, but paradoxically, could lead to a weakened dollar.
The question in all this is whether rising interest rates will strengthen or weaken the dolloar. Additionally, will rising interest rates lead to higher savings and consequently higher investment.
Since it has become talismanic that we have a “consumption economy,” many on this board suggest that decreased spending will be bad for the economy. But if savings and necessarilly investment increase, then I think that monetary policy would net out to essentially unchanged, but resources would be allocated differently. There would certainly be displacement in some sectors, but the net effect could be neutral, or even positive for the economy, as investment leads to compound interest while spending is much more of a zero sum game.
Stop thinking so hard…
This is why Robert Kiyosaki can say “I love bubbles/busts”. Sure he’s a schlock artist, but that’s actually not a bad statement.
The Great Depression aside (and even included to a certain extent)… busts are indicative of a restrucuring of the economy towards a more productive footing. Therefore, if you can maintain your footing during the bust, and grab some assets at panic prices… you’ll come out quite well.
We tend to speak in “catastophic” terms, though it never really is that bad. The 70s were pretty financially destructive, as was the early nineties and early 2000s. We ended up ok then and probably will now. Even the GD was bad, but survivable. Just don’t let your debt get out of control and save.
It’s easier to take a 33% drop in income when you already save 20%.
“Even the GD was bad, but survivable.”
The next GD will be worse, as the city-dwelling system ramps up societal economic interdependence (systemic risk), as does globalization, implying there will be no place to hide from a general economic downturn. In the 1930s, the US was primarily an agrarian society and local agricultural production shielded many from dire straits (my folks included). No wonder our policymakers are so bent on keeping those prices upwardly mobile…
Have a great weekend!
Signed,
The Reverend Thomas Malthus
(aka The Original Dismal Scientist)
How about an update on the mortgage business. With emphasis on what is happening at the smaller shops.
I have a question or two.
what are the historical early warning signs that the bubble is collapsing?
is it when inventory bottoms and starts up?
can the price of lumber telling us anything about the housing bubble?
did lumber send a signal before previous RE declines?
what happened to condoflip?
Please can you help out with a new blog on commercial realestate. I am sure that will crash right after the residential crash.
BEN…..I think django’s idea is a excellent one…Lets blog on commercial real estate…
I live in Pittsburgh, which supposedly doesn’t have a bubble. I rent a small apt. I’ve been reading apt & home listings for years. Past few years, the apt landlords were offering free TVs in many of the ads. Don’t see those anymore. Also, my rent increased for 1st time in years. THAT, to me, says that the non-bubble here has popped, or at least is deflating.
Here’s a topic: interest rates. They were on and off inverted for a few months, now they aren’t. What if we’re now experiencing a false bottom in treasury prices, and the curve will reinvert, as the Fed will keep raising rates. How will people react with 10 yr ylds decreasing again?
After the next hurricane where does Florida plan to purchase its Venezuelan barrel tiles from?
Not much of a topic, but if you could kick somebody in the nuts, would you choose:
A) a realtor
B) a subprime lender
C) an appraiser
D) babyboomer
E) subprime borrower with neg-am
*note - I’ll include Lereah in the “who would you not piss on if they were on fire” poll
Have a nice weekend!
Hey Damon Botsford, I’m a baby boomer but I moved out of bubbleland and downsized my mortgage $50,000. I do not have granite countertops or look down on renters. However, I do have to endure the Moms 10 years younger than me (I had my kids late) that are material queens. Watch your broad generalizations, hon!
Upstater,
Yeah, I had a feeling answer “d” would stir somebody up. Babyboomers have become synonymous with flippers, who really deserve the blame. Sorry about the generalization. Oh, and being a female, you’re exempt from the poll unless there’s something I don’t know.
How about a discussion on which market will get the biggest correction in the next year or so (1) lower priced market (2) middle market ,or (3) high end market .
How about a discussion on what state or city will get the biggest market correction price wise , and for what reason .
How about a contest to see who can find the biggest drop in value for a home on Zillow for a selected period. I’ve got a couple candidates in mind.
I’ve been reading this site for quite a while and I’ve had a question in the back of my mind. Most of us here expect some significant correction in real estate, possibly having particularly significant effects on the economy as a whole. Now, I’m assuming the stock market will take a dive at some point, probably related to real estate, various banks and other financial entities. If this is the case, I also expect stocks related to financials and RE to be punished significantly. So, reading my old Peter Lynch book, that situation would present a good buying opportunity for the (few) stocks/banks/etc which are unduly punished.
So, the short form of this question is: What banks have limited exposure to the particularly high-risk debt, a long-standing responsible management, and so forth? Who are the lurking grown-ups of the domestic banking industry? Who might be worth buying stock in during the next market downturn?
(I realize it’s a bit indirect in its relation to the housing bubble but I still figure this might interest some other bubble-watchers out there.)
Should be very easy to spot… since those will be the only financial institutions still around!
Comment by Salinasron
2006-04-07 07:42:37
Vegas may be having a rebound but wait till the summer heat arrives. Plus, what types of jobs beside housing and service sector jobs are being created. Housing goes down and poof go the jobs. Next phase is gonna be a state income tax or high property taxes to pay for the infrastructure of roads, schools, police, fire, hospitals. Mart my words, it’s headed your way. Wait till the service people loose jobs and watch the welfare rolls rise. Nope, you are going down, down, down.
Now there’s an interesting subject, what is going to become of taxes once this real estate boom finally dies a slow agonizing death.
This is what I fear happening to Las Vegas, and Nevada in general…increased taxes.
When me and my husband relocated our business from California to Nevada, our taxes went down by 40%. This town is great, but its not worth a 40% increase in our tax bill. If that happens, we’re packing our business up and moving somewhere else.
Maybe we should have a discussion about how much home prices should drop per every interest point increase in the market .
Maybe we should have a discussion on how the fact that this is a mid-term election year will affect decision making if things start to unravel.
(I am just starting to read the occasional comment that neither party wants to be visibly in charge over the 2007-08 period.)