Economy and General Discussion

Let's see. If a house in a neighborhood sells for an exorbitant price, all the house "values" rise accordingly. No one complains obviously. But if the bubble bursts, and these overpriced houses revert to more appropriate levels then this is a catastrophe. What has changed? Has the utility of the house as a shelter changed? No. Has the cost to the home owner changed? Not likely unless they took those ephemeral gains out with another mortgage. That is like having a stock price rise and taking a loan out against the increase. Who would do that? (Oops can you say margin account? :-)

So, apart from spending value that wasn't real - the big problem for these other homeowners is that the notional price of their shelter has fluctuated. Big deal.