Net Worth, Real Estate, and Extended Credit

From all the recent press about the real estate prices cooling off, you would think that the sky is falling. There's so much analysis out there about how sales are slowing down whether its the relationship between the number of sales listings in the market versus the average number of days on the market or how people are coming to their senses and becoming more cautious about their spending. There also seems to be a glut of condos and condo conversions that will come to market in the next year or two. According a Fitch Ratings report, nationally, the rate of condo conversions has more than tripled in the past two years. What might happen is that when all these new condos come up, all these buyers who have overextended their credit will not come flocking to the sales office as it has been since 2001.

Although net worth might be up among the emerging affluent, since they've been house rich but cash flow poor, it's going to be tight times ahead.

Slowing Is Seen in Housing Prices in Hot Markets - NY Times
Home Builders' Stock Sales: Diversifying or Bailing Out? - NY Times
Real Estate in Bubble Trouble - NY Post
Supply Hits High In Condo Craze - Washington Post