Inflation floats all boats. If this was not the reality of the housing industry the past decade, it was certainly the perception. How can you ask consumers to use caution in their home-buying decisions when one respected gauge – the S&P/Case Shiller U.S. National Home Price Index – showed that single-family homes gained 84 percent in value from 2001 through 2006? This astounding run-up led to over-building, over-lending, over-borrowing and over-selling. All caution flew out the door. The concept of purchasing a house for home and hearth was replaced by purchasing a house to make money and get ahead financially. The resulting thud – defaults, foreclosures, lower home prices, more expensive mortgage money -- was the most talked-about real estate story of 2007. While mo...
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