You may be a blind optimist, especially if you wish to be President in 2008

Think about this. Housing has already dropped 10 percent if it drops 30 percent like many think it will remove over 6 Trillion in wealth from Americans.

Local governments will be collecting far less taxes on property meaning that they will have to drastically cut services or raise everyone’s taxes.

Those who have less then 30 percent equity in their house will have to come up with money to sell it and they will have to come up with more money to pay selling costs.

All this means that there are not going to be a whole lot of people moving in the next few years, meaning that they will not be buying the house you are trying to sell either.

In addition, few will be able to get home equity loans because they will not have enough home equity. Anyone who can look at this information and not see a very deep recession in the future is a blind optimist.

So who wants to take the rap as president during this economic downturn?

Lords of Housing: Believing in the $22.5 Trillion Housing Market. » Dr. Housing Bubble Blog

If we then extrapolate this information with the recent Case-Shiller Index decline, we realize that over $2.41 trillion of residential housing value has evaporated into thin air($20.15/.893)=($22.5644) | $22.5644 – $20.15 = $2.41 trillion

Keep in mind that we are not using the peak price of the market.
Estimates range from $23 to $24 trillion. It is becoming rather clear
that when all is said and done, we may be seeing 20 to 30 percent
nationwide declines in home prices. How much more equity will this
destroy? Let us run the scenario further:

Drop	Equity Lost
Current 10.7% drop	$2.41 trillion
20% drop	$4.28 trillion
30% drop	$6.29 trillion

The problem of course is not necessarily with those with no
mortgage, but many who bought at peak prices with very little equity.
Those that went in with no money down, 5, 10, even 20 percent down
stand to be underwater when the market reaches its bottom.