As many of us sit here anxiously awaiting a decision as to where the fed will put interest rates I cannot help but think where it will lead the housing market. Many of my friends with economics degrees debate with me saying that the easy availability of money is to blame for inflation and an eventual recession in the markets. If we ponder this for just a second, this proves to be very true. Especially coming from a lending background, I feel that many people took advantage of the great gain and inflation of residential home values. Pulling large sums of equity from their homes and buying inappreciable assets.

Many people invested in cars, boats, dirt bikes, vacation properties in areas now heavily affected by this housing slump. Even those who felt they were purchasing these great "investment / vacation" homes did not realize that they were buying these properties at an over inflated price and in areas of vacation homes that would be the first to go in the event of a housing bubble burst. So, if the fed increases the rates what do you feel will happen?? Should the easy access of cash be tightened up? How many people have we seen driving around in S-Class Mercedes Benz Vehicles, and BMW 7-series? Putting 100k landscape jobs into homes and buying 150k dollar boats? These were items of luxury that the average American did not and could not previously afford.

The average working class American was buying a million dollar home with nothing down and making a payment of 2k dollars a month. These unrealistic values are now coming to an end and the housing bubble has burst. Should the Fed raise rates and cause the housing market to further crumble, thereby bringing real estate to it's knees and back down to reality? Sure you may say that any real estate professional would not want to tread in these waters of a so called "real estate doomsday" but there are many great opportunities in a market like this and its a more realistic market. The days of the sign in the yard and sold the following day is over..hard work must be put into play and only the strong willed will survive.