Tuesday, June 27, 2006

Climbing Inventories

Stuck! Homes sit longer on the market

I wouldn't consider this “the sign” but it is certainly one of the many signs of the coming real estate collapse. How does this happen, one might wonder. Developers, seeking that escalating rent, get all excited and go into a building spree. When people start to try and sell their homes, or businesses try and move across town, or those ARMs go up and people can’t afford them anymore, they find they can’t sell their houses at those escalated prices.

Here is when things get fun, when the rent starts to decrease, which will happen once inventory starts going up, all that wealth will drain itself out of the housing market and into other things. Remember, most peoples wealth is tied up in their houses, if they lose part or all of that, then things start not-so-merry.

We’re playing for all the marbles this time around.