Instead of trying to help, instead of trying to change minds, instead of trying to convince people of what's happening and what's to come...
Should ya just say F it right about now?
At what point HP'ers do you throw in the towel, realize that some people just can't be helped, take care of yourself and your family, and move along?
And let the lemmings do what they're gonna do anyway.
52 comments:
I'd say now would be an appropriate time. As Matt Simmons said some time ago - we're going over the cliff on this one. Let's have some decorum though, as rare as that is today - women and children first.
Time to move on - how about another blog to follow Britney Spears and Linsay Lohan around? This bubble thing you talk about is way too complicated.
Only bother with those who have the ability to ask, "what if I am wrong?" Otherwise, isn't it futile to try to alter something that is by definition, driven by mass psychology?
It never hurts to ask that question. Even with the housing bubble, we are monitoring its progress, watching to see if our informed prediction pans out.
yeh, could we so me more pics of real esate babes to make us feel better?
the housing market definitely comes up more nowadays, but i rarely say anything, and havent for months. i just lost a friend to the housing market. he'd been searching for 2 months and finally closed on a half mil townhouse fixerupper in yuppified alexandria va. he's been painting and finishing floors and home depot destined ever since.
what's so great is you have these young couples who are freshly married, and the wife wants to have kids right pretty soon, and i'm seeing most of the time the wife quits working once they have kid(s). so that house they could afford when they were DINKs, they didnt have the foresight to think, hey maybe we should get something one salary could sustain. now they are SIK (single income /kid) and they're arm is likely coming due. pain.
Keith,
Agreed. What's that saying about the road to hell?
there's never been a better Time2Buy
I'm sorry - this may not be the place to put this link, but did anyone see this article about the man who trashed his house using three pigs because he was facing forclosure? It's wonderful.
http://www.oregonlive.com/news/oregonian/index.ssf?/base/news/1180155303269110.xml&coll=7
I'm here for me.
This may be wordy but the following fits Keith’s question of the day:
The property behind mine fronts on the main road leading to one of the cross-Puget Sound ferry terminals. Like everywhere else, development is creeping out of town along the main road – gas stations, convenience stores, etc.
When the previous owner put his 1940’s – era house up for sale in 2005, I gave him an easement to run a water line across my property to connect to the main line. He decommissioned his well, and no new ones are allowed now.
Fast-forward to last weekend, when I was talking with the new owner. She said, “We may have paid a little too much for the property, but we see it as an investment.” (Translated: ‘We hope to make $$$ selling to a developer in the future!’)
Perhaps she never read the easement document, in which I purposely worded: “This water line easement is to serve only the EXISTING single-family residence at [address].”
No water access = no building permit. Just because many FB’s can’t be bothered enough to look at the paperwork doesn’t mean that joe developer wouldn’t check for restrictions before plunking down a cool $1 million for a site to build his mini-mart on.
Lotsa luck with your ‘investment,’ neighbor, and no I am not going to change the easement. I kinda like seeing all that greenery when sitting on the back deck drinking another cold one!
-Mammoth
They're running out of land in Montana
I could care less about saving anyone from stupid financial decisions. I just give the advice that it is always a good time to buy and sell real estate, stocks, future contracts, bonds, and collectable art.
Walked into my first house after two years of looking. I called the FSBO number and asked how much. He says $X, but it'll cost $X + 10% tomorrow because he is hiring a Realtwhore®. He tells me I can use the key under the mat and look around inside if I want. The house is in a swamp, standing water outside everywhere, a ditch in the back yard. You could throw a cat through the cracks in the doors. It needed new HVAC and roof. I conservatively estimated $30k to make the place livable. I called him back and told him it was a great house and that it would sell easy. Ha ha. He was paying 13% on an ARM and already bought another house. No way a Realtwhore® can get what he's asking now, much less at 10% higher. Funny, the high pressure sales tactics, even when their tits are in the wringer. Do they teach that at a seminar or in a book somewhere? This will get ugly.
I had a friend that I used to speak with about the housing bubble back in 2004,2005. We were both renters and it seemed safe enough.
Recently I learn he bought a house in late 2006 (in CT) for just over 1M. I imagine he bought one of those "the market has just bottomed" PR gigs thrown out in the press, and I think by now he probably realizes he's toast.
So whats next, he doesn't call or email anymore. Friendship toast also. Another shoot the messenger story. Oh well f him, he's done anyhow.
I'm in the mortgage business. I will not do a first time buyer, I will not do a new purchase, and I don't do stated income loans. Luckily I make most of my money keeping the industry informed of compliance issues. Factually, I haven't seen a loan that didn't involve even a slight amount of fraud in years. Always the appraisal has ignored that 'rental income' is supposed to be the highest and best use of any property. So even if I have poi, and everyone debtratios, and they even admit it's an investment home, the appraisal is fraudulent as far as I'm concerned. Homes are worth the rental income, the rest is blue sky because of vanity.
When asked a question by some sheeple I explain that a mortgage has to be 2.5 times your annual income, and that you must put money down to cover any difference in the price of the home. I often get a blank stare, thus I often walk away. Those that can't be educated are all that are left.
Garbage eaters eat garbage. A goat doesn't know truffles from rutabagas. Some sheeple will come around. Dinks [don't thinks] can't be retrained. I'm done with all of them. I'm just using the blogs to check for frauds that I may need to be alerted about. Median prices in Ca are up because low end houses aren't selling, and foreclosures count as sales for the full value of the foreclosure. Try explaining that one to sheeple....
"i just lost a friend to the housing market. he'd been searching for 2 months and finally closed on a half mil townhouse fixerupper in yuppified alexandria va."
Gt, I too, in Alexandria, but fortunately, renting a TH on the outskirts of town. I still cannot fathom that people are buying townhouses for 500K that were a few short years ago going for 200K (which was crazy back then). Also, I just cannot understand why someone would plop down anything for a townhouse- you have no land, cannot do what you want because of the HOA and your neighbors are right next to you!
Actually... the towel has been torn to shreds about a month ago (which is about the time I stopped visiting this website).
When people (who I KNOW usually don't give a damn about anything) start coming up to me and saying with wide eyes - "Man... that housing market in the US is looking really bad." you know that the crap has already hit the fan and there's a fine brown mist about to settle down on everything and anyone stupid enough to be present.
My hats off to HP - it provided a vital service of bringing some people back to reality at a time when HYPE was in fashion. Who knows how many people were saved by scanning these web pages before buying that half million dollar person trap.
But in all honesty... watching a train wreck after it has crashed is not nearly as exciting as predicting it beforehand. Everyone likes a good crash... until they see the body parts strewn everywhere. Unless you're a total psychopath, and have an unhealthy dose of schadenfreude, watching this disaster unfold will just make you more and more depressed.
I think the hardest task for HP is to try and reinvent itself. To bring back an interesting and relevant view without the heavy dose of depressing facts.
Best of luck... and thanks again for the articles.
IB
Rules 'hiding' trillions in debt
Liability $516,348 per U.S. household
http://ncane.com/1wht
Yes, the trolls have been here a lot lately - but guess that comes with the territory - especially now that the lead story on Marketwatch.com is "housing prices fall first time since 1991.". . .hey - even FLAT prices mean no more housing ATM. . .and . . .drum roll . . the two year treasury auction today was Horrible!. . .foreign banks (read China) didn't bid, and forced the rates up . . .there go those 30 year mortgages to 6.6%!!. . .I think we should move on to the next Ponzi game - "reverse mortgages" I read somewhere that all those out of work mortgage brokers are moving into reverse mortgage field - there is still equity to be extracted from those people who are in their 60's to 80's and bought their house 30 years ago. . .grandma and grandpa can take a reverse mortgage and give money to their grandbrats to consume some more. . .must feed the debt beast. . .
Is that the new NAR lemming?
Found out today house down the road from me (currently renting home) is going to auction. Previous FBs paid $583K in 2004. Bidding starts at $50K 5 weeks from today.
I am interested if I can get it cheap, like at 50% off previous sale price. Anyone actually bid on a home before, some quick advice you'd be willing to share? Should I not even bother?
Anon said: "But in all honesty... watching a train wreck after it has crashed is not nearly as exciting as predicting it beforehand. Everyone likes a good crash... until they see the body parts strewn everywhere. Unless you're a total psychopath, and have an unhealthy dose of schadenfreude, watching this disaster unfold will just make you more and more depressed."
Man I agree, watching this come down is nothing but depressing, especially since you get the feeling that the true consequences of the fallout are largely unknown.
True. My friends still don't want to hear anything negative about home prices. Of course I can't refute them. One friend owns three homes, two in Phoenix and one in Austin. The home they live in (and I wouldn't live in it, not my taste but nice lot and good location) is holding its value. I've seen four homes sell in their neighborhood in the last two months all for $650,000 or higher for 2500-3000 sqft. How can I convince them the market sucks when it isn't affecting their neighborhood? Most of the significant price drops here are in Queen Creek or Maricopa not in the best areas of the city. So I've given up trying. They are looking for another investment property.
My other friend, conservative as hell bought a place in Monterey where he has rented for five years for $850,000. He thinks it a bargain because similar properties are still listed for $1.2 mil or higher. It was a fixer upper triplex five blocks from lover's point and the bay. He is living in the 2br unit and rents the other 1bdrm unites out, which doesn't cover his costs but he did buy with a friend who makes up the small difference the three rents don't pay.
He was the last person I'd consider buying a home under those conditions. He did. TIred of renting in Monterey where $1600 a month gets you a 1 bdrm garage apartment.
So I'm frustrated. Feel like I may be wrong...or at least misguided. If you bought before 2005 I guess the melt down hasn't affected most people nor will it. The government and the banks will keep the prices as high as possible. Remember way back when I posted the house in Lakeway, Tx I tried to buy as a foreclosure and offered the going rate per sq ft from my research? The house had been empty for over a year and they bank refused my offer and it eventually did sell for what the bank wanted (and was owed). I sure wish I could see light at the end of this tunnel so I could decide what to do. I don't want to pay the ridiculous prices for another home unless it is worth what I pay!
I still might go 125,000 cash for one of those thousands of places
i saw for sale in 2001, that are being offered at 400,000 and were 84,000 in 2001
seems there is just the govt listed inflation numbers rate of inflation here, not
foxwoodlief,
I'm in the same boat. I don't get it either. On paper house prices should be collapsing. We all know the reasons - 3X income rule, 120X rent rule, 28% rule all blown out of the water, strawberry pickers in $700K homes. But so far for whatever reason prices are holding up for the most part. I shake my head in disbelief each time I see a 1700 sq ft home sell for $500K+. But they are selling.
Personally I'm giving it another 6 months and if by the end of year I don't see real price falls, I'm throwing in the towel and buying again.
Keith (and company) I wouldn't worry about losing the sense of HP purpose yet.
This morning I caught a commentary on ABC by some SCE (so-called expert)that was absolutely gleeful about the money "pouring" into the stock market and the bullishness of it all. The ABC newsgal then thanked him for his optimism.
I said to one of my friends yesterday "do you notice how the talk is about liquidity and takeovers and never about profitability."
I say, let them do what they want.
I'm hoping they will buy my house before the figure it out!
Small Hat
Folks, you don't lose friends over housing booms or busts. You only lose a friend when he, she or you die.
Auctions? I wouldn't bother: it's still too early in the market reversal for any true REO "deals" to come up, so most professional "investors" are waiting on the side-lines for now.
BTW, any trolls who STILL want to quibble about whether there's been a turn in the market, here's one for you (in the category of pigs flying): word from the NAR that house prices have experienced their steepest decline since the Great Depression:
http://tinyurl.com/ywlmbb
Mechanisms:
The massive credit bubble of 2001 (easy money) allowed ANYONE to borrow to buy a house, and most everyone did. Housing was deemed undervalued, a recession was nipping at our heels (following 9/11 and dot.com crash), so the Feds did EVERYTHING possible to fight a slowing economy.
Lowered lending standards meant almost ANYONE could buy a property at a reasonable price, and hence there was more demand for housing than supply. So housing prices rose, and builders rushed to meet the demand.
As housing prices continued to rise over the 2003-2005 period, the lenders needed to resort to increasingly riskier strategies to keep the party alive, e.g. using 80/20 financing, no-down, no-doc loans. No one cared about risk, as the market was still appreciating, and people counted on their perpetually-increasing "equity" to finance it all.
That brought us to 2006, widely regarded as the 'peak' of the bubble.
People realized the market WAS unsustainable (as lenders realized that the market was FAILING: that's what the whole sub-prime meltdown was about: investors who decided foreclosures made investing in sub-prime-originated investment vehicles was not such a good idea...), and those who could "cash out" their "investment homes" did so. Those who didn't lose too much of their "investment" money are looking for places to put that excess liquidity (e.g. stock market).
>> I'm in the same boat. I don't get it either. On paper house prices should be collapsing. We all know the reasons - 3X income rule, 120X rent rule, 28% rule all blown out of the water, strawberry pickers in $700K homes. But so far for whatever reason prices are holding up for the most part. I shake my head in disbelief each time I see a 1700 sq ft home sell for $500K+. But they are selling.
Frustrated renter here too. Sold late last year and am currently renting an apartment, which is much smaller in a noisy environment. I'm wondering what it's going to take - literally some overnight event - that's going to cause home prices to actually plummet substantially. A market crash? Another terrorist attack? Don't know...
"When asked a question by some sheeple I explain that a mortgage has to be 2.5 times your annual income, and that you must put money down to cover any difference in the price of the home"
Turdly, my kids are grown, no other bills to pay and I can definitely pay more than 2.5 times my income and still have a decent living. So only agree with your comment up to a point -- and that is, if you have a young and growing family, 2.5 times may be correct.
There are still so many flippers holding property they can't sell. Reducing the price is not an option for these folks as they have so much debt and unrealistic expectations. I thought flippers had left the market but they are still holding on waiting for the greater fool.
I advise anyone thinking of buying a home in this drowning market to do the research on the property. Determine the existing debt on the property, determine who owns the proeprty, look up the assessed value, look up the rental rates for the area, etc. If the property is owned by an LLC you can bet the property is probably a flip property.
Anon 5:59
Just be aware of the other liens on the property.
Small Hat
Stock market drive is supported by a sub-prime mentality with private equity buyers right now. Debt is so cheap and covenants relaxed, why not buy up everything in sight? The p/e guys aren't quite as ridiculous to watch as mexican field hands levering themselves at 50x income, but same concept.
ho hum another day another 0.5% rise in the nasdaq. how's that gold doing for everyone?
You're correct, the 2.5 times income only fits 97% of the population. I live in a modest home I purchased for one months income in 1998. I'm comfortable here, and frankly don't want to live on the golfcourse or other high end area as I GENERALLY do not like the neighbors and certianly do not like the conspicuous consumption of such areas. Please don't beat me up because I said 'golfcourse' I could of just as well said beach or whatever, I'm being general here. I drive cars that are 3 and 4 years old. They replaced the 11 nad 13 year old ones. I don't have a mortgage.
I bought my first home at the top of the market in OC in 1989 and had to hang onto it for 11 years before it was again worth what I paid, minus of course the 75k I spent fixing the place up from total wreck to diamond. But ya gotta live somewhere. I made 10 times the average income back then. I still had to put 20% down, qualify at the 18% cap on the adjustable mortgage and come in at 29% debt ratio. Had to have 6 months FULL reserves in the bank, and no gifts, that money had to have been in the bank for the last 90 days.
For some people even a 90% debt ratio would leave them 5 times average income to spend as they like. That is incorrect for 97% of the population. I understand that 1 mill a year only gets you into the 1 percentile income bracket.
Perhaps I should of said 'average mortgages for any given neighborhood need to be at 2.5 times the average income for that neighborhood. People lower than average income will bring more down payment to the table to live there, pople with larger incomes will bring less.' I didn't think it would take that much clarification.
I've seen it both ways; buried in 1989 after putting a lot down, and now looking at it all with absolutely nothing that can hurt me. I don't care what prices drop to, I'm not selling and I would never include ANY equity in my home in the net worth column. Again, ya gotta live somewhere.
I believe more in the first scenario of money down and a litle pride coming to the table with a commitment. And who told you us that we qualify for prime rate? your piddly ass little mortgage sure doesn't. You pay 3 points over prime or put down 80% or get out.
Please remember, we are talking generalities here, not specifics, but thanks for acknowledging my post.
Keith you do realize that the mexicans booing were not the illegals in the US.
6:20 pm - "I sure wish I could see light at the end of this tunnel so I could decide what to do. I don't want to pay the ridiculous prices for another home unless it is worth what I pay!"
+++++++++++++++++++++++++++++++
A: The only 100% fool-proof method of purchasing a home that is ALWAYS worth what you pay - even in a price falling market is to obtain a home construction loan with the cost of the land site included. After YOU and your friends build it (and a few pro-sub-contractors when needed),you then turn the construction loan into a mortgage loan - of the exact cost of your materials, land, utilities and sub-labor.
There is no way you can lose on this investment package!!! - unless you pay too much for your selected land site - or should you build in or around Crawford Texas.
BRING ON THE DIE OFF!!!!
Mark from San Diego said:
the two year treasury auction today was Horrible!. . .foreign banks (read China) didn't bid, and forced the rates up . . .there go those 30 year mortgages to 6.6%!!
That could be the most important post in this thread. If China stops buying our debt, interest rates are going to skyrocket. Who the hell would want to buy our debt when we are technically insolvent? Someone else posted that extremeley valuable graph of mortgage interest rates that have been rising. If that isn't the icing on the cake, I don't know what is.
To FWL and others tired of waiting for the significant reductions, I suggest a little more patience. The market is correcting according to schedule. You can't expect price reductions to happen all at once everywhere. That's my approach.
We need to go through an entire selling season of slow sales and price declines. It takes a while before irrational optimism finally wears out. We really haven't had that yet. Right now, they can still tell themselves that the peak season isn't over yet and that the right buyer will come along soon.
When the summer ends sellers will be forced to acknowledge that, if they couldn't sell during the summer, they are not likely to sell during the winter. Not without a price drop.
I used to convince people about the housing bubble but no one wants to hear it, especially in Vegas where sheeple-thought is the norm. "But, Joe, it's a new paradigm. Everyone wants to live here and I heard the BLM is restricting land". Typical sheeple arguments. You can always tell a sheep when they inject "I heard" into their dialogue.
Nowadays I just feed people the bullshit they want to hear. "Yeah, it's not a housing bubble. The market's just taking a breather. Better get in while it's a buyer's market. Vegas really is *special*."
Some people are just not worth saving.
Home price deflation will be a slow rolling train wreck for the people who put themselves in that postion. This will play out over years. Some area will go up as some people flee with the cash from overpriced homes. the fleeing people will raise value in the lower cost area's. I left LA with 300,000 and bought 3x the size house in utah with low crime for almost cash. My payment is 300 and the taxes are cheap. So certain area's will go down and some will hold. And i don't care what happens now because my payment is so low and fixed at 5.875. I see my friend in LA working 60plus hours a week for there shit house in area's that have really never been that great.I miss the coast but have the time and money to take trips. I could payoff my house and still have alot of cash. I'm 36 how long will it take for them to payoff their shit box and the majority of people in cali never will because a huge percentage have i/o's. I miss somethings but unless you are one of the small percentage who get to live in a low crime area and have a great job or business cali will work you to death and you will wake up at 60 years old with very little. I tried and was fairly successful in LA but it very expensive.I'm only 36 and did not want to spend my life trying to stay afloat. Crime, taxes, private schools( public school very bad no matter what they say) insurance, I paid more in property taxes then i pay now for taxes,payment,water,elect,gas. I love LA the coast but if you can't enjoy it what does it mean. Price will take years to hit bottom in some area's. The only thing that could speed up the train is hikes in interest rates but until we see 8% or above it will be slow going and thats the wildcard INTEREST RATES and no one can predict the pace of the hikes.
Mammoth:
You need to read up on the concept of easement by necessity. Never underestimate the ability of a developer to penetrate the local political scene.
It ain't over till it's over.
New home sales up while used sales are down. Why?
Homebuilders cut prices by 10% plus tens of thousands in incentives. FB's cannot afford to cut prices so they hang on hoping for the market to turn around while the builders keep cutting prices. The REO's will be cuttin gprices for the next few years as ARMs reset. The FB's will have to hang on for at least 5 more years if they hope to sell at breakeven. That doesn't include the 5 years of carrying costs.
All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.
I was watching a collector car auction on TV tonight. It appears sheeple are everywhere and the basics of math are ignored for the spectator awe of a good story.
A '67 cobra came across the floor that last year sold for 450k and this year at the same auction house sold for 640k. The announcer said 'holy cow! that's almost a 200k profit in a year!'.
Here's the real deal;
450k for car plus 10% buyer premium of 45k plus 10% tax and license on the new 495k price for a total of $544,500. Plus maybe 2k to get it home, storage, sundries let's roll it to 550k once it's home and settled in. so we're at 550k, and you're selling it. It's the same 2k to take it back to the auction, so we're at 552k if you did nothing whatesoever to the car. [it was announced that he did a MAJOR restoration to it. That's car talk for 'spent the entire value of the vehicle' but we will dismiss this for the sake of my numbers].
The car sold for 640k, minus the 552k for a total of 88k profit. Now let's minus out the SELLER premium of 10% or 64k and you have a 24k profit. But we all know he spent something on the car while he had it, let's call it 4k for insurance for that year. so we have a 20k profit.
450k in the bank at 5% would of made $22,500. But the crowd cheered and thought what a great man to have made that almost 200k in one year.
Punchline; all sheeple think alike. It's not just the housing sheep. In essence they don't think. Don't thinks are called dinks.
Prices are not dropping as fast as some here expect because FB and flippers don't have a choice but try to cover their absurd cost. Since they can't afford the homes anyway, they will hold on to it until the last minute and then let the banks take over.
Another thing, a big chunk of exotic loans will reset by the end of the year. Also, lots and lots of homeowners were using their homes as ATMs to buy cruises to Bahamas, send kids to college, buy new boats and cars, etc. The perfect storm is forming out there.
There are red flags everywhere: years of negative savings, average amount in retirement accounts is only $8k for people over 40, etc.
Check these revealing graphs out:
www.prudentbear.com/default
This is a great thread. From it, I've come to realize that there are two major types of "bitter renters" and other forms of bubble sitters:
1. Delayed Homedebtors. These people want a home so bad, they can taste it. They are susceptible to relatively small price drops, which they buy into (fearing they've missed the bottom, combined with a deeper fear of never having bought in). Naturally, from the actions of a bubblific collapse, they tend to become the down-step bagholders.
2. Real Homeowners. These people simply want a home at a price that is not only rational (both objectively and subjectively) but affordable. Certainly the flippers loathe these people, and even the Delayed Homedebtors snicker about them (at least having the decency of hiding such amusement behind a shielding hand).
My point in identifying these folks is that the Delayed Homedebtors should just stop pretending they have the same stake in sitting out the bubble, as do we Real Homeowners.
Look, folks, I've just about had it up to here with the shrill complaints about why housing hasn't fallen to rational levels (i.e. "regressed to the mean") yet. That's NOT how such a collapse works. Do any of you think you're going to actually pull some sort of coup by walking up to a man in a $700K house and smugly offer him $250K in cash? "Cash is king!" after all? Don't be stupid. Prices are relatively sticky and there's a lot of delusion and alternate means that protect and insulate the deflating seller. His protection, combined with Delayed Homedebtors, combined with flippers, will continue to provide a ready market for a decremental sale. So, that $700K home is going to regress to the mean in decrements, where each step is generally held (and the loss sustained) by somebody.
Is that "somebody" going to be YOU? It may take at least 4 "somebodies" before that home regresses to the mean. It's still WAAAAAAY too early, folks. Many of these homes haven't even been sold to the FIRST decremental bagholder, yet.
I'm all for returning residential real estate to sane pricing. In case anyone wonders what that is, it's roughly 2-3% YOY from the 1998-2001 price. However, for certain homes and certain local markets, that regression is a huge drop. That huge drop can't be absorbed in one sale. Houses will literally be bulldozed before anyone will allow such a steep loss scenario. So, we have to wait.
This should only stand to reason. We watched prices climb excessively for about 5 years, so sideliners had to at least wait that long. Tack onto that wait, another 5 years, plus perhaps another 5 years depending upon local market and whatever the stupid government does to support bubble pricing. That brings the total wait to 10 years at least. Sorry, guys. Once a whole bunch of capitalist morons decide to speculate with an asset, they ruin it for you sensible buyers for a decade. Suck it up and enjoy the smell of schadenfreude in the morning. Real men can wait. Wimps should get a toxic loan, while there is still time.
I hate to disagree with you peahippo but this time down is different in fundamentals than any other housing boom. Several fundamentals will bring her down withen a year.
1)Is we have never had so much mortgage exotica before. In the old days people had at least a 10-20% nut in their home so you had to go down alot to make people walk away from their home.
2) We never have had this level of speculation before on a national scale.
3) The price run up has been absolutely ridiculous in alot of areas. I basically lived in a McMansion for 5 years for free. Sold last year and still kissing the ground today.
4)The American consumer is HELOC and credit carded to the limit.
5) With house prices falling and bankers waking up to 100000+ forclosures a month they will tighten standards back to normal.
6)All this will lead to one hell of a recession due to millions of lost jobs in you guessed it realestate and related sectors.
7)The spillover from all the lost realestate jobs will trigger job losses in other sectors.
8)This will accelerate even more forclosures and end this bubble in one FOUL swoop.
This is only my poor uneducated guess. However homes in my old neighborhood have dropped 10-15% since last year.
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