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FSN: Real Estate: Is the Bottom In, or Is This a Head-Fake?
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
by Charles Hugh Smith
Of Two Minds
Everyone interested in real estate is asking the same question: Is the bottom in, or is this just another “green shoots” recovery that will soon wilt?
Let’s start by reviewing the fundamental forces currently affecting real estate valuations.
Expanding the pool of potential buyers has reached the upper limit
There are two ways to expand the pool of qualified home buyers, and they both rely on expanding leverage: A) lower the down payment from 20% cash to 3%, and B) lower the mortgage rate to 3.5%.
Lowering the down payment increases the leverage from 4-to-1 to 33-to-1, a massive leap.
Continue Reading at OfTwoMinds.com…
2012-12-10 04:06:24
Source: http://silveristhenew.com/2012/12/09/real-estate-is-the-bottom-in-or-is-this-a-head-fake-2/
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