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Real Estate
Reply to "Poll: How much did you pay for your house and what's it worth now? "
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[quote=Anonymous][quote=Anonymous]going from 3.5-18% overnight just isn't plausible. It would completely freeze the RE market. It also didn't drop from 18-3.5% overnight. It was gradual. I could see interest rates going up, but not so precipitously.[/quote] Oh, it is plausible and there are a number of scenarios to consider. A run on the U.S. dollar, for one, would collapse the Treasury market. T-bonds are the baseline for interest rates (including mortgages) and are sold at a discount to face value. Everyone and his (Chinese) brother selling at once collapses the price of the bonds and sends interests rates skyrocketing. This could occur over the course of a week, maybe less. Is this likely in the near term? No, but I wouldn't bet the farm that nice, slow and gradual is what we're facing here. And it wouldn't freeze the RE market, it would collapse it. [/quote]
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