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Huge swathes of people would be left owing more money than their property was worth, many would default.
Apart from that, it's not a bad thing. However, for that to happen supply would have to outstrip demand so either there would be a mass of new housing stock being built or the wider economic situation is so bad that no-one dares move house.
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Can anyone explain why a crash in the housing market would be a bad thing? Assume houses were suddenly 10x cheaper to buy.
It won't happend, so don't worry about it.
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If houses were 10x cheaper to buy then it would be uneconomical to build them. So all developers and house-building companies would go out of business overnight. Cue massive redundancies in the construction industry, a massive increase in unemployment, a reduction in GDP and tax income and a huge increase in social security payments. Cue knock-on effects on the rest of the economy, and you'd be looking at a recession of biblical proportions.
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andyp
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Brommers
@Dramatic_Hammer
Can anyone explain why a crash in the housing market would be a bad thing? Assume houses were suddenly 10x cheaper to buy.