Don’t recall where I got this link, it was up on my browser when I came into work this morning, but it’s a pretty interesting and dark observation on the state of the housing market and its relation to the economy. I hope that the fears are exagerated, but there’s no telling. I wonder what a bubble burst in the housing market would do to the Pearl District and proposed Macadam development projects? My guess is near disaster since the condos seem to be riding the wave to me.
I need to learn a lot more about economics tho. What happens when housing prices drop to the individual? To the market? To related markets, such as investor markets? My thought is this. On the surface if the value of my house drops it shouldn’t affect me too much because I am already making payments. But then, if I have to sell, it’ll be a lot trickier because I won’t be able to cover the loan with the sale, so I’d get out with debt. But the bigger question isn’t what happens to me, but what happens to the bigfish. The ones who hold mortgage guarantees, and have their fingers in a lot of different pies. The ones that make up a lot of the nonconsumer- and nongovernment-spending portion of our economy. If suddenly they start bankrupting, and need to be bailed out, consumer confidence is down, international investments go down, house pricing, stock market, it all goes down. Just trying to think through some big ideas that I don’t understand too well here, so if you get it, let me know.