it is true *in theory* that when money flows out of real estate it makes a flow into the stock markets,...but there are other factors in play here. its not so clear cut.
one, the economy is in a very possible downturn and most likely a recession.
two, the money in real estate is not really money in the invesotrs pocket. its unrealized profits. most (60%) of the mortgages are of the exotic kind so there are no funds to put into the stock markets. additionally foreclosures are on the rise and home prices are at a discount.
three, the "real estate cooling" you are referring can only occur if you pull the money out of the real estate equity and put it in the market. so you are now sitting with -0- equity in your home. not smart.
its not so clear cut this time around,...people that bought these exotic mortgages are going to have their rates re-adjust very soon (the first re-adjustments take place in Nov) to a higher payment. so where are the "profits" to place in the market ?
i get what you are stating,...but this is a different scenario we have in front of us.
invest at your own risk, based on your own due diligence, at your own risk tolerance
