patrick.net

That's right. Extend and pretend is not going to work indefinitely. There will be another dip.

The market will stabilize now, if not now soon, all these things the goverment is doing will create inflation, everything will go up, if houses don't go up at least they will not fall as deep as without inflation

@jordi_jorda,

There is currently no inflation and there won't be inflation for quite some time. In order to have inflation take hold, you need velocity of money. Right now, velocity is negative and you can see proof of this just by going out to the Fed's website and looking at their graphs! Credit all across the economy is collapsing. Without people and businesses taking on credit, there is no velocity and hence no inflation.

An 8K credit on an 800K house isn't going to cause a massive dip in markets over here in the bay area. On a 300K house, it's a little larger. On a 100K house, it could be quite a bit.

In the end a dip like that won't be massive. Now that at least some of the homes have been flipped to new owners, it won't be a mad rush down. People will likely drop their prices over a few months to match that 8K credit, but it will still take a bit of time before a real double dip happens.

It's likely, but I'm not sure if the government programs will cause it. More likely arms resetting will cause a larger dip.

inflation will only work if your wage got inflated too....

Yeah, my wages haven't "inflated" since 2000.

Whitney has not been that accurate as of late, so lets not get fixiated on any one "expert" and treat them like a modern day prophet.

http://investingcaffeine.com/2009/11/23/meredith-whitney’s-cloudy-crystal-ball/

The expiration of the $8k credit should not have any impact on higher end houses since, if you can afford that kind of house, you most likely don't qualify for the credit since your income is too high.