Quote:
Originally Posted by Jacks
People who just entered the market would be hurt by a big price drop. People who bought a long time ago or who's house is paid off shouldn't really care. You have to live somewhere, if you aren't planning to move then it doesn't matter how much your house is worth, unless you are using it for loan leverage I guess. It wouldn't bother me a bit if my house dropped 30% in value, if anything I would think about upgrading. The only other people who should care about it are folks looking to downgrade or cash out, not sure that is a large percentage of homeowners though. The people who would really care are real estate investors who are a big cause of the problem, too bad for them.
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Other financial assets should work that way also (retirement savings), but in practice it’s not what happens. It’s rough on people psychologically when these assets drop, and it undeniably impacts their other spending.