Funny to see the people who helped create the bubble now recognize the bubble, and help pop the bubble. No worries on their end, remember, as it's Freddie, Fannie and overseas mortgage bond holders holding the bag.
Two-thirds of lenders nationwide believe a real estate bubble currently exists in the United States - and half of them believe it has already begun to burst or will burst in the next six months, according to the results of this quarter's Phoenix Management "Lending Climate in America" Survey.
A significant 93 percent of lenders surveyed expect an anticipated housing correction to result in real estate prices declining 10 to 20 percent across the country.
When asked when they believed the housing bubble would burst, thirty percent of lenders said it has already begun to happen. Twenty percent predicted it would occur in the next one to six months, and 27 percent thought it would happen seven to 12 months from now. Nine percent said it would occur in 2007.
Among the 92 lenders who participated in this quarter's survey, only nine percent said they did not believe a housing bubble existed.
April 05, 2006
Just your typical bubble. Easy credit followed by tightening as lenders freak out.
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6 comments:
I want to know who those 9 percent are that think there is no bubble. These guys are so spin focused they're even afraid to tell the truth in a blind survey for fear the stats will pop the ultra-fragile bubble.
Why are they still lending out money at inflated prices?
And who in the hell wants to borrow money to buy an inflated asset? I would be surprised but there are people still paying $45k for a new SUV (Tahoe) when you can get a two year old one for $15-18k in similar condition. Probably the same people buying the 3-4 houses to flip at inflated prices.
I certainly hope that we will be able to borrow money to continue our trillion dollar war to bring democracy to Iraq. It would such a shame if that failed. What if we couldn't borrow more money to start a war with Iran also. It is so sad.
They sell the loans to Fannie and Freddie so we taxpayers are responsible for it. That is why the government keeps talking about a soft landing. If this thing blows up it will get alot worse than anyone can imagine.
I think it's the same reason that banks will lend money for a depreciating vehicle.
They know that if you want it bad enough you will find a way to afford it; whether you rob a 7-11 to make the payment or work at WalMart is indifferent to them.
BUT there is a difference between a $100,000 spread on loan/valuation and a $5000 spread.
The banks probably don't care since Fannie/Freddie will buy the loans up and package them as MBSes. Screw over someone else they muse.....
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