Real estate worries

The real Estate market outlook plays an important role for assessing the general financial markets trend in 2007. There appears to be a large chorus of worried voices. For example:

A Dozen Reasons To Worry (Forbes, Jan.10th): "Unlike earlier U.S. housing booms and busts that were driven by local business cycles, such as the rise and fall of the oil patch along with oil prices in the 70s-80s, this [housing bust] is national and, indeed, global. And since houses are much more widely owned than stocks, the bubble’s likely demise will shake the economy more than the earlier bear market in stocks. A major housing prices decline will precipitate a full-blown U.S. recession, sending corporate profits down… China will suffer a hard landing due to domestic cooling measures and U.S. recession."