Quote from Mvic:
Housing is really what is going to be hit with the darkest storm.
The boomers will be selling to retire, pulling out equity or just to save utility money and effort of maintaing a large single family. People with second homes will sell due to job losses and underperformance of the stock market (will mean they need to save more to fund retirement) and to pay for the massive increase in taxes that is coming. Young families will have to save for many years before they have the down payment to qualify to buy a house and even then why would they when they can rent for much less than what they would pay in mortgage and taxes especially in an environment where home prices are decreasing or not appreciating and their job is not secure (meaning they may have to move which makes renting more attractive).
The job losses coming are what will be the wake up call and the final shoe to drop that no one is really expecting, and not just from the financial industry but across the board. We are a nation of house poor tapped out consumers riddled with debt, so much so that even Costco is feeling it. Take AXP, Costco, Starbucks, and the housing reports (mortgage aps down again in the middle of what is supposed to be the summer buying season with all those bargains out there) and the real picture of the economy is fair clear and eventually the market will price that reality in.
