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The problem with the risk model was is that all historical data showed nationwide price decline as impossible/never having happened.... Whenever historical gro
by mrnobody_67 8y ago
The problem with the risk model was is that all historical data showed nationwide price decline as impossible/never having happened....
Whenever historical growth rates have always been positive, markets react in shock at the "black swan" event when a 30, 50 or 100 year pattern is all of a sudden broken.
- rwmj 8y agoReally? House prices never fell before across the whole US? Not even in the 1930s or various recessions in the 60s/70s?
- kyancey 8y agoPeople don't dump houses when the market drops. Few people sell their house when they're underwater. People tend to live in them until prices come back up. Prices don't drop. Demand drops. Unfortunately, the balloon payments made this impossible for most.