I just loved this transcript from a chat at the Washington Post with their real estate editor last night. It speaks for itself
Your worst nightmare: I'm a very well paid professional, who just crossed into a six figure income last year. I have basically no debt beyond my student loans. I rent. I'd be interested in buying.
But you see, I spent the past five years listening to all of you blather on about RE. The smug attitude. The snotty "oh you rent" comments. We warned you that this was a bubble. We told you that ARMs, or worse yet interest-only ARMs were amazingly stupid on historical low interest rates (which can only go up). We told you energy prices were skyrocketing, driving up inflation (and eventually interest rates).
But still you bought the condo for a half mil on $80,000 income. And were condescending about it.
So now I'm sitting back, putting a grand or two a month away. I have no pressure. I'm ahead of the game. I just have more downpayment. Rates going up? Who cares? NOW is when you use ARM loans, when rates are higher and going up ... by the time it resets rates are going back DOWN.
You on the other hand have an albatross. Those low, low payments die when your ARM (or god help your interest-only ARM, or worse yet your teaser) resets. Maybe you can afford it. Maybe you can't. A lot of you can't. Or you get a job elsewhere. Or whatever. The point being you are competing with desperate builders of new construction, and have a timeline. Or didn't you notice the backlog of properties?
I can wait you out.
I'm not buying your overpriced place on some silly discount. I'm buying at 2002 or earlier prices. If not from you, then from your bank when you foreclose. So keep dreaming about "soft landings." All the greater fools already bought ... the rest of us are those who could afford it, but weren't willing to mortgage our futures on crazy loans and overpricing.
Maryann Haggerty: Who is sounding a little, well, smug and condescending now?
July 22, 2006
Posted by blogger at 7/22/2006