April 22, 2007
"Five months later, I lose $100,000 - I don't think I can take $100,000 into the stock market and lose it faster"
They listened to their neighbors (who thought they were rich), they listened to their REALTORs (who got paid), they listened to their mortgage brokers (who got paid), they listened to their developers (who got paid), and they listened to their "ownership society" buffoon of a president (who was too dumb to understand), and they listened to themselves (really bad move).
And now they'll be listening to bankruptcy court judges and debt counselors.
Tulips anyone? Pets.com stock anyone? South Sea shares anyone? Phoenix condos anyone? Anyone? Anyone?
The late great American housing bubble has ended. Prices are crashing (no matter what the government or NAR tell you). Inventory is skyrocketing. Lives are ruined. Millions are asking "what the hell was I thinking". And an epic Ponzi Scheme ends.
'Upside Down' Home Sellers Owe More Than They Get
Jeffrey Taylor and his wife bought their dream home in Purcellville for $538,000 last August. Now they have to sell it because they are getting divorced and neither one can afford the mortgage alone.
The most they could get for it was $430,000. After paying all the real estate commissions and taxes, they will still owe the bank $118,000.
"Five months later, I lose $100,000," Taylor, a high school teacher, said. "I don't think I can take $100,000 into the stock market and lose it faster."
The people most vulnerable are those who bought their homes within the past two or three years and now want to sell, either because of a life change or a financial problem.
Prices in some places are notably lower than they were at the peak of the market, and the costs of selling can eat up even more money.