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Pent Up Housing Demand in Pictures

One of the current problems is inventory (new houses on the market). The millions of people who make a living selling to builders are close to being out of work (no building). The construction people (mostly illegals) who do the manual labor will be out of work as building grinds to a halt. Buyers who, in the past, upgraded to these new homes by making money on their current homes, cannot sell the house they are in. Potential buyers of these resales are equity poor, having taking out so many additional mortgages to buy toys with that there is nothing left to tap. Add to this the ARM's coming to call, balloon payments, and the fact that many of these owners might be out of work now or soon in the coming recession, and home values go straight down. There is no market. As a building supply executive, I can tell you that this will last for another 5 years, and even then, when homes begin to sell, they will be valued at up to 50% less what they could have fetched 2 years ago. Regional? Sure. For now. We aint seen nothing yet. Believe me, if real estate is the bulk of your net worth, you are not going to like the slope of the graph that measures it as we go forward.