Housing Crash?

Interesting article. Conspiracy? Truth? You be the judge....

http://patrick.net/housing/crash.htmlHousing Crash Continues

Re: Housing Crash?

wow, there is so much wrong with these theories.

Re: Housing Crash?

Hasnt seemed to affect long island, houses are still selling and people are still buying.

Re: Housing Crash?

I agree with others, while some of it may have a bit of truth, a good portion of it is pretty off.

Let's stick to LI on this discussion...
1) rents are not less then half of mortgage payments.. I WISH, becuase we're still renting.... a legal one bedroom apt in port jeff ranges from about 1100 (in poor shape / small) to 2k (comfy, with common laundry facility) a month. A 1 bedroom condo apartment unit (with laundry facility / work out room) would have a monthly mortgage payment of approx 2100.

2) senators may be discussing a RE bail-out, but it's not to finance a Mc Mansion, it's to prevent a US recession by bailing out the mortgage industry.

I will say I agree that industry lacked adequate gov't regulation (under the economic theory that the free market needs no regulation... yeah right!), was permitted to go crazy with high risk loans that depended upon a booming RE market... Reality is that variable rate and interest only loans shouldn't exist!

2) Correct me if I'm wrong, but Fannie Mae does not deal in high-risk jumbo loans or variable rate loans. It has to be for under $417k, and fixed rate. If I'm right in that, these risky loans cannot be transferred to the gov't...

I will say I do think the baby-boomer thing will flood the market with jumbo loan homes... becuase most people like to downsize as they retire....

DH and I are betting the recovery will be slower than initial expectations (about 2009, when the bulk of expected forclosures are expected to occur). LI real estate, just like S. California, is rather over-valued. I bet it will be like the late 80's, a market correction that lingers about 7 years or so...

Message edited 8/26/2007 3:17:31 PM.

Re: Housing Crash?

Off in so many ways IMO, and most of what he is saying doesn't apply to this area really, except maybe the baby boomer part.

I still don't understand why the mortgage industry woes are a surprise to anyone. If an industry rampantly offers too much money to people who cannot afford to repay it, eventually something has to go terribly wrong, no? Seems like a no brainer, but maybe I'm missing something.

Lenders have been way too loose with money. When DH and I got our prequalification, we were offered a very high mortgage amount, nearly the same as our take-home pay! I was surprised, and we realized we would need to figure out what we could realistically afford. no bank was going to do that. This was over a year ago though, so things may have changed since then.

Re: Housing Crash?

I can tell you chase is more in line these days... our pre-approval amount was perfectly in line with what we would feel comfortable spending each month......

so things may be improving from a year ago

yeah, the mortgage industry totally did it to themselves..... an implosion set off by unrestrained greed. The problem is that it is soooo bad, it likely will affect the entire economy, and has the potential to spark a recession

Re: Housing Crash?

Re: Housing Crash?

He also says that RE commissions are in the 6% range which, in my experience, is not true anymore. RE agents have been taking 4% around here.

Re: Housing Crash?

there is some truth with it, but most of it I don't agree with .