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[quote=Anonymous]No, but I agree with your reasoning in principle.

Here is what I think will happen: prices will stagnant for 10-15 years until inflation catches up. In the past inflation was 3-6% so that could be 10 years in some areas or less in DC. Some forecasters believe this is the Obama administration's strategy. They artificially hold interests rates at 0% during a recession to cause massive inflation (15% in early 1990s). That 15% would help to artificially recover the housing market overnight however it would screw people with ARMs. It would depress buying power as well so prices would be affected but only if supply of buyers in a certain HHI disappear too. It would also screw us internationally because our prices would be much higher than China, India, and probably comparable to Europe. Of course mass inflation here would probably affect Europe currency too.

The problem really is that there is no good solution to our current predicament. Some homeowners will get screwed and they are mostly young professionals. Could be a lost generation like in Japan.[/quote]

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