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The Masked Tulip

With Real Estate, This Time It Really Is Different

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Once the trend reverses, falling prices will purge speculative demand from the market. Once speculators become sellers, supply will overwhelm demand. As lenders see housing prices fall and inventories rise, increased default risk will result in tighter lending standards, restricting access to mortgage credit. As more mortgages go into default, the secondary market for mortgage backed securities will dry up as well. This will act as a self-perpetuating, vicious cycle, as tighter lending standards reduce housing demand, leading to lower home prices, more defaults, fewer qualified buyers, lower prices, tighter standards, ad infinitum. In addition, the collapse of consumer spending associated with higher mortgage payments and vanishing home equity, will plunge the economy into a severe recession, further exacerbating the collapse in real estate prices, worsening the recession, and continuing the vicious cycle.

Full article:

http://www.freemarketnews.com/Analysis/96/...wid=96&nid=2976

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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