You are either ignorant, or foolish.
"21% of our net worth is tied up in real estate" is a rediculous statement from the get go.
While yes, 21% of the net worth #'s are in RE, that doesn't remotely begin to represent RE's impact on our economy. It is THE SINGLE BIGGEST INDUSTRY IN THIS NATION, BAR NONE!
What do you think is going to happen when interest rates climb? Tax laws change? Money supply tightens? What do you think is going to happen when folks find themselves underwater in their houses? When all that borrowing catches up with them? What do you think is going to happen when new housing starts slide, because there is too much existing stock, and banks and others pull out of new projects? You don't have to go far to see what a local housing collapse can do to an economy, its happened in S. California, its happened in Houston, its happened in Boston, its happened in NYC. And when they happened it had catastrophic results in those localized economies...
Now, nationwide we have had a housing Boom, not seen since the 70s in terms of market value of homes... and guess what... its coming to an end. Will there be some places that continue to boom? Sure there will be, but the clear national trend is going to be down, and its going to go down hardest, in the areas where it went up the fastest.
So, lets see, 21% of net worth is in RE equity... and lets say most of that gets whiped out... then the housing Trusts and stocks of companies that supply things for the housing industry contract... and so do their suppliers etc.. blowing away lots of paper equity in stocks as well... which will trickle to other industries etc etc etc.
If we have a housing collapse on a large scale in america, you are going to see a path of destruction that hasn't been seen in America since the great depression.
As to your "year over year aggregate decline" question, you might want to read a little report the government just published a few months back... its sober reading for those misinformed who think housing is guaranteed to go up.
Not my numbers. They're from the Fed. You got anything, other than your feelings, to refute what they say?
What do you think is going to happen when interest rates climb?
If you're really in real estate you'd know that aggregate housing values in this country continued to climb even when mortgage rates were 10%.
Tax laws change? Money supply tightens?
Yup, these changes have been going on for a long time. Again, all those changes notwithstanding, when was the last time this country experienced a year over year decline in aggregate real estate values?
What do you think is going to happen when folks find themselves underwater in their houses?
With 57% average equity in their homes....not much.
When all that borrowing catches up with them?
Do you not understand how net worth is calculated?
What do you think is going to happen when new housing starts slide, because there is too much existing stock, and banks and others pull out of new projects?
Be sure to ping me when all that happens.
You don't have to go far to see what a local housing collapse can do to an economy, its happened in S. California..
Yes, and what's happened to values there since then? I have friends in Manhattan Beach and in Mountain View who have become rich simply by virtue of buying a home when the prices were depressed in 1992.
its happened in Houston, its happened in Boston, its happened in NYC
Houston experienced the worst housing price decline in modern history (23%). Of course, unemployment was around 10% then. Are you expecting 8-10% national unemployment anytime soon?
So, lets see, 21% of net worth is in RE equity... and lets say most of that gets whiped out...
Aww, C'mon, you can do better than that. Let's say that bird flu comes to this country and wipes out 100 million. That would really kill the housing market. As long as you're dealing in Armageddon, why not swing for the fence?
If we have a housing collapse bird flu pandemic, on a large scale in america, you are going to see a path of destruction that hasn't been seen in America since the great depression
you might want to read a little report the government just published a few months back... its sober reading for those misinformed who think housing is guaranteed to go up.
If you gave us the link, it would be the first time in this entire thread that you even attempted to back up what you've claimed. I'd be happy to read it. Should I take it from your answer however, that housing values in the U.S. haven't shown a year over year decline in a very long time?