Here is one theory: We are actually in an economic depression. The only reason no one is job/homeless is that we have been living on consumer debt and coasting along. The real estate market has been booming and people have been HELOCing themselves into new cars and treats like boats and Skidoos since the mid 90s'. Also having what they think is disposable income they buy 'investments' like NFAs and we have all seen how it has driven this market crazy.
Here is the problem: they are just starting to run out of consumer credit and all of those bills will soon come due. They have maxed out their houses equity lines and can get no more out of them. Now they owe for credit cards, loans for cars and huge packages on their houses (all those companies like Rock Financial handing out 120% loans has not helped). Soon they will have NO cash to pay bills.
SO they must start to unload 'investments' they bought with their equity lines. As soon as enough people default or file bankruptcy (oh, that’s right the Republican congress passed a law that says you can't file bankruptcy on consumer debt if you make more that your state's median income) the Federal reserve will raise interest rates to keep the banks afloat the banks will start adjusting the hell out of the interest rate on their houses as soon as they can. Banks will stop all of the free and cheap loans for real estate and the bottom will fall out of the market.
Home prices will drop as there will be a glut in the housing market from all the urbanspralling white trash with the acre and half lots building as fast as they can. People who owe more than they have in assets and will have no more credit available will have to dump their houses and 'investments' just to get out from under the $1500 and growing house payment. THEN we will have people being homeless and jobless.
My wife works for one of the biggest credit counseling companies in the US (Greenpath) and she is just starting to see the leading edge of this economic down turn. People with combined incomes in the $150,000+ area who are falling flat on their arses with 20+ credit cards maxed out and have no way out. Some even have 30-40 Providian cards all with $1000 limits. They are all maxed out and each month each card gets a service charge and late fee and penalty times forty cards. Add that up!
Any way, a flood of NFAs on the market means prices will go down. Or they can hold on to them because they are ‘investments’ and they will continue to loose on them because they bought in with home equity that will have interest going up on it faster than it rises in value Or if they bought it on credit cards because people with good credit (like them) get low rates, will be surprised when they miss a cable bill payment and find out that ALL of their creditors raise their interest rates across the board to 20+%, because of a new thing called 'unilateral default' (ie miss one payment, somewhere, one time and you have instant bad credit) will loose even faster on that NFA 'investment'! But remember dear yuppie: a 21a Thompson tastes great if you toast it lightly and butter it on one side.
Oh, and their is no limit on how high they can jack your interest rate. The Republicans took care of that in the 80s when they deregulated banking and dumped the usury laws.
Now maybe decent NFAs at decent prices will start to shake loose form the hands of all those Yuppie investors and back into the hands of collectors. Yep, the honest working stiff who pays his bills in cash and asks for no credit may win one.
PS. This same theory is applying to all of the Harley Davidson’s they bought to play biker on the weekend with that are showing up on the market with about 1500 miles per year worth of mileage and an asking price of 20-30% less than it cost new two years ago!!