Vigilant Investor

That headlines states it clearly enough. The Arizona Republic elaborates just a bit.

That the crazy pace of price appreciation would slow, well… that was inevitable. What happens next is still open to debate. Collapse? Stagnation? More moderate growth? Questions to watch include:

• What happens if ARM mortgage rates increase?
• What happens when home and condo speculators can’t unload that second or third home at a tidy profit:?
• What happens if the economy slows to a recession — as the inverted yield curve suggest might happen — and those who got themselves into tight mortgages suddenly find themselves in a pinch?
• The Fed policy related to money supply: inflation is inflation.

We shall see.

However, we can’t help but wonder why concepts like regression to the mean should not apply to the housing bubble when we consider “average rates of appreciation”.

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