January 26th, 2010
I hope the housing market crashes super bad so I can finally afford to buy a home. How about you?
Holy crap. Things got WAY out of control here in Florida. Wages stayed flat for years while the housing market skyrocketed here. The only folks buying homes (and there were alot) were folks that brought alot of money from up north after they sold their home in New York or wherever or speculators would invest heavily hoping to make a quick buck. Actually, I hope the people that the speculators that drove the price up really suffer financially. According to major newspapers here in Florida, this may even trigger a recession.
What I am really getting at here is that I hope for a market correction.
The pendulum is definitely swinging. We went through this back in the late 70′s and early 80′s. But this new generation has not learn from past mistakes. I read some misguided soul quoting the breakingbubble.com a few times. They blame the Realtors, Washington and everybody else under the sun except their own ignorance and stupidity. They deserve every thing coming to them. let me share with you why.
A home is not an investment instrument and definitely not a speculative instrument. Years back, we pay 10% interest rate on our mortgages. However, when interest rates fell to record low of 3%, 4% 5%, one can afford twice the home for the same payment. So everyone traded up. Why not and nothing wrong with it. Hpwever, what went wrong was because everyone got greedy are started buying homes or even "investment" houses to flip and things went on a rampage. None of these people have any kind of investment training or experience. Worse, they drove prices higher and a lot faster than earnings. Over night, all these how to get rich quick real estate courses sprung up. When interest rates goes up, payments just got higher and real estate prices come down. This is the law of real estate. The result is quite predictable. There will be a correction. I am hoping for a soft landing instead of a crash. Just stay put and don’t get into the "me too" kind of a deal right now.
January 26th, 2010
stl_aer Says :
Nice…..let’s put the country in a recession, then that affordable housing you hope for won’t matter once you lose your job.
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January 26th, 2010
I ♥ AUG Says :
Um, no, I would not be hoping for this! If the housing market crashes that badly, then there would be other bad economic things going on as well (crashes don’t occur in a vacuum), and I would NOT like to be subjected to that.
Just save your money and you will be able to buy a house someday. You only need like 5% down or less. You might have to move out of town a bit, but it’s doable. Better this way, than your way!
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January 26th, 2010
Jazzy163 Says :
You know, you can still buy a home. Look out for homes that says rent to sell. Usually, you will give a non-refundable down payment + 1 1/2 months security which you will get back if you decide not to buy the house. This program is great for people who doesn’t have much to give as a down, shady credit records ( which one can improve by doing this ), newly employed, or just want to try the house before they buy it.
Hope this helps and goodluck!
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January 26th, 2010
Drew Says :
Wow many feel that way and if they understood how they made the housing bubble they would even be more pissed off. Hear is how they made the bubble stay out of debt save and your time will be hear very soon.
http://www.breakingbubble.com/index.htm
References :
http://www.breakingbubble.com/index.htm
January 26th, 2010
DJ B Says :
Well you don’t want a complete crash of the housing market because it is a major part of our ecomony. I understand your concern for prices in Florida. The market here in Minnesota has seen some market correction in the last 1 1/2 – 2 yrs. Prices might not go down, but the equity gains seen in the past few years will not be evident. And seller contributions will increase, which is what is going here now. If the Fed’s keep holding on interest rates, the market could rebound to a more normal cycle. But I dont’ believe we will see a hot market for some time.
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January 26th, 2010
nido_tr3s Says :
How rude of you to wish financial suffering on someone like me! I have a news flash: although I am from up North, the cost of living is killing me here. Even though our homes cost more, it’s harder to afford them here than in FL. Not everyone has as much equity as you seem to think. Try being nice and not wishing bad on people you don’t know… people who may be having a harder time with home-ownership than you are living in a reasonably priced state to begin with. Sheesh!!!
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January 26th, 2010
Svieta Says :
I can totally commiserate with you, seeing as how I live in one of the most expensive markets in CA. We are renting and totally willing to wait however long it takes, rather than try and buy something we can’t afford.
There are multiple factors to the crazy housing prices.
1. People are just plain stupid and willing to pay crazy prices (face it…houses wouldn’t sell for so high if there weren’t idiots willing to pay) and go into crazy debt to pay for it.
2. Lot’s of people "investing" in real estate.
3. VERY low interest rates and lots of non traditional mortgages that make a half million dollar mortgage "affordable" for a fixed amount of time.
4. The misguided belief that houses were just going to keep on going up forever.
etc, etc..
The good news is that things are definitely slowing down. I’m starting to read little articles here and there that are getting the doom and gloom rolling. It’s funny because a few months ago everyone insisted that everything was just peachy–the bubble is just a myth! Ah, how quickly things change. Houses are staying on the market much longer. People are giving low ball offers instead of trying to trump someone else’s offer. People are taking their houses off the market because they can’t get what they’re asking. We are also just beginning to see people defaulting on their loans. Shame on these lenders who lend HUGE amounts of money to people who can’t really afford it.
So anyway, I think things are starting to happen. Chin up.
References :
January 26th, 2010
rechdxs Says :
The economy will collapse if the housing market crashes as housing has grown and stabilized the economy since the Internet/stock crash from year 2000.
The Fed is done raising interest rates and ultimately will have to lower interest rates in order to restimulate an asset based/housing led economy that has been its primary growth hormone in recent years. With inflation leveling off at admittedly unacceptable levels and the domestic economy moving towards a 2% real growth rate or less in the next year or so, the Fed at some point in 2007 will be forced to cut short rates. Don’t ask me when or by how much. A lot will depend on the evolution of the domestic housing market and the equally important maturation of the global economy sans U.S. consumer imports and perhaps sans hyper investment spending in Asia.
Although I explain what is going to happen with the market and that it won’t crash, I feel the need to put things a bit simpler. If I’m wrong (I’m not) and things get bad in the housing market, things will get bad for everyone. Jobs will go away, especially in manufacturing, as well as perhaps services industries. It won’t just be the speculators that are hurting, it will be you too.
References :
http://en.wikipedia.org/wiki/Asset-based_economy
January 27th, 2010
robert S Says :
The pendulum is definitely swinging. We went through this back in the late 70′s and early 80′s. But this new generation has not learn from past mistakes. I read some misguided soul quoting the breakingbubble.com a few times. They blame the Realtors, Washington and everybody else under the sun except their own ignorance and stupidity. They deserve every thing coming to them. let me share with you why.
A home is not an investment instrument and definitely not a speculative instrument. Years back, we pay 10% interest rate on our mortgages. However, when interest rates fell to record low of 3%, 4% 5%, one can afford twice the home for the same payment. So everyone traded up. Why not and nothing wrong with it. Hpwever, what went wrong was because everyone got greedy are started buying homes or even "investment" houses to flip and things went on a rampage. None of these people have any kind of investment training or experience. Worse, they drove prices higher and a lot faster than earnings. Over night, all these how to get rich quick real estate courses sprung up. When interest rates goes up, payments just got higher and real estate prices come down. This is the law of real estate. The result is quite predictable. There will be a correction. I am hoping for a soft landing instead of a crash. Just stay put and don’t get into the "me too" kind of a deal right now.
References :