Turk

All_Around_Brown

He makes some very good points. I agree with him that It isn't going to be pretty. The housing market has already begun to show what I predicted here almost two years ago and right wing nuts dismissed as pure pessimism.

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Real World

I said it a few years ago that the prices being paid for property, combined with the historically low interest rates, were going to cause a serious correction, if not a crash in the NE market. People thought I was nuts too, but I pointed out that refi's were at an all-time high, and rates could not get any lower. When you combine that with record prices for housing, there would be no safety net with respect to equity. In fact I pointed out, we would begin to see negative equity. It's why I stayed within my means and bought in Chelsea 7 year ago. I've got an easy $100-150k in equity, and in a couple of years I'll be buying in at the bottom. Anyhow, the fall in housing is more regional than national. This crash won't be anything like the fall in '89-. Rates are low enough for people to afford property that loses 20-30% in price, and the economy is solid to the point that there is money to be spent. I see a crash of sorts, but a regional crash in over extended markets like NE, NY, San Diego, etc... where the boom started first (1997-98).

BTW, the biggest culprit is sub-prime lenders. I've know people in the business, or who quit the business, and they were as unethical as can be.

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897