U.S. housing prices should be allowed to fall – Sec. Paulson
 

Sounds great to me. People for a long time have been paying well over market value for homes. That compounded with the no money down subprime mortgage debacle. It was bound for a correction.
I don't feel sorry for anyone who put their name on a paper without knowing what they were getting into. I for one don't want to bail any of them out.

Danny

Housing runs in cycles...........just like everything else. Folks forget about the downturn in 1989 that lasted through most of the '90s. Houses were in decline after the '87 crash and took nearly 10 years to start back up again. They continued to climb until '06.

My attorney once noted that housing runs in 20 year cycles. So far, he's not been far off the mark.

The climb in housing prices is over for the foreseeable future.

Prices are still up from a year ago in Portland.
March 07 median price $307K-$325K March 08

Paying less for housing is not all bad. Housing prices
can't keep increasing faster than income forever.

I'm hoping for a drastic drop in Arlington/Alexandria condo prices that will last long enough for me to buy one, and then bounce back.

I think what we are experiencing is a smaller version of what happened in Japan at the end of the 20th century. We have had some speculation and questionable loan practices, but not to the scale they had in Japan.

http://en.wikipedia.org/wiki/Japanese_asset_price_bubble


But if you think $1500 or so in the hands of everyone is going to solve our problem......

We're probably looking at a run of 3-4 years effectively in recession to recover. I wouldn't suggest that you speculate on any investments in real estate that depend on you keeping your job...... (or you AND your wife BOTH keeping your jobs......)


This link has a lot of good information about what's been going on in the US:

http://en.wikipedia.org/wiki/United_States_housing_bubble


I heard two things on the news this morning that I never heard of before:

1) It seems that Home Equity Loans often have a contract clause that prevents you from selling your house until you pay back all of the loan first. Loaners are starting to enforce that clause.

2) In some places in the USA, if you miss one house payment, 30 days later your house can go into foreclosure proceedings. I always thought it was much longer, like 6 months to a year of non-payment.


Ken300D

Good input, Brian.
Thanks for the insightful comments.
-Skid

What people pay *defines* the market. So if you pay a lot, thats the current market.

The government should not be in the real estate/mortgage biz at any level. What problem has ever been solved my government intrusion into private industry?

We wouldn't stand for the Fed getting their fingers into our personal investments and nobody is suggesting they bail out people who lose money in the stock market, why should we treat the real estate market any differently?

Like you said, people got in over their head, they need to deal with the consequences.

Housing runs in cycle's, as long as the government stays out of the market and lets it correct it should in a few years.

The only bad thing about all this is its happening in an election year. None of their butts should be saved by the Government. Let the chips fall where they may and the market will sort things out.

The government has, through action or inaction, allowed housing to be a market commodity. Markets rise and fall. It wouldn't make sense to now change the rules because of natural market swings. And if they do change the rules, they better apply across the board to everyone, not just the whiners and charity cases.

No gov. bailouts for stupid and/or greedy people!

Hear here! I want to be bailed out of the remainder of MY mortgage while they're bailing!

Then, I promise to use some of that free cash flow to pump up the economy. Everybody wins!

Remember defualts only represent like a fraction of a percentage of all the subprime loans made. Also most ARM's have reset by now.

I know Realtytrac.com is a big site that our local paper quotes a lot for foreclosures. They are full of ****! They claim 160 in my city, BS. I signed up for Realtytrac for 2 weeks and looked into 6 "foreclosures". 4 had no notice in the town records at all of "Lis Pendis", one was a foreclosure, and the other just had List Pendis filled but the owners fixed it.

Those websites don't count foreclosures. They count Lis Pendis badly, which is BS because that doesn't mean they are going into foreclosure.

Now short sales I'll give you that, their are a ton of short sales out their and they are a PITA.

Amen.

The Fed/Gov has their fingers in: Bear Stearns, Savings and Loans, Chrysler etc.

I think the Fed can keep trying to get the interest rates down so refinance
is a option. Those that are not in trouble could also benefit, keeping
it fair and less complicated.