[RobRoy]

This time is unique. here are some things that were not there during other cycles:

1. A flippers mentality (housing as an investment)
2. Creative loans
3. Fifty year mortgages
4. >50% of your monthly income allowed for a mortgage payment - even on a "teaser" rate.
5. New bankruptcy laws
6. Massive refinancing for "non-home-related" items.

It is going to be interesting to watch the loans reset in the next 18 months. We are seeing some of it now, but so far we are like the guy during the tsunami that walked out into the newly exposed ocean bed and said, "Hey look. It looks like the water's starting to come back".

Interesting times are ahead.

[Hydroshock]

It is getting scary.

[Eagles Talon IV]

While I can no more see into the future then anyone else, I can state the following feeling quite sure I am correct.

1. Interest rates are still low. I bought my first home in 1968 and even working IN a bank and getting a .25% discount, I paid 6%. Now, almost 40 years later the rate is not quite .5% higher.

2. We are closer to the end of the interest rate raises then the beginning. My guess is a raise in August is about a 55-60% possibility and one in October is about a 30% probability.

3. There may have been some speculation in homes by "flippers" but I don't see that as being anything much. Most people bought their homes to live in them and the RE market hasn't come close to crashing. The slow down is in certain markets that were on fire to begin with.Real estate prices go up and down but on average they have risen about 6-8% annually. I see nothing that will stop this. I know it's been said before but it is true that the reason RE is a good investment is they aren't making any more of it.