News for hackers. Stuff that matters.

A comment on Have the record number of investors in the stock market lost their minds?. Parent comment

Re:Have the record number of investors in the stock market l... by rabidrat on Saturday May 16, 2020 @05:21PM (#23207312)
That's not how it works, at least not in 2009. If you don't have enough equity, the bank is not interested in letting you short-sell your house and thus won't approve it (they would rather you default on the loan!) People who have more equity in their homes will decide to sit tight so they don't have to take a loss. Even commercial real-estate will let their properties lie fallow rather than lower the rent.

"Supply and demand" is a nice platitude and economic theory but it doesn't reflect reality.

[ Parent | on HN ]
Re:Have the record number of investors in the stock market l... by pixl97 on Saturday May 16, 2020 @06:17PM (#23207660)
Because commercial can keep getting loans to because the property price generally goes up. If lending tightens and prices stagnate you might, and I believe will, see a lot of comm defaults soon.
[ Parent | on HN ]