Housing Market Fallout

I have been researching more about the fallout of falling housing prices.
It's not worth fighting the obvious - prices are dropping and will drop faster and more severely than people expect.

For builders and suppliers, the impact is obvious. Get ready for 7 lean years.

For the average consumer, the issues are mixed. New home buyers are in a potentially better place. Home prices still need to drop 20% to balance out the 1 year increase in mortgage costs. For sellers, the world isn't over because they are mostly sitting on tidy profits. It's hard to imagine belt tightening when someone is sitting on 'only $200K of profit on th ehouse.

It does mean that luxury items will not be strong. But splurging on big ticket items will stop. Tiffany, Boat makers, and car makers are looking at dropping sales.

And folks are done outfitting their new homes - so consumer durable companies were bound to see falling sales anyway. GE is looking ready to drop. Light fixture and bathroom and jacuzzi makers - dead.

Something else that will play out: property taxes. Home taxes are based on appraised value, which has gone up. As prices start to unwind, local taxes will do so as well. Some people may start to pester the local governments for a re-appraisal downwards of their home.