What is Digg?297 Comments
- GunbladeVIII, on 10/10/2007, -10/+178Good. Hope it gets worse, a lot worse. As a would-be first-time buyer who's effectively locked out of the market thanks to prices that are still too high after years of ridiculous unsustainable gains, every single foreclosure means my chances of getting a house at a price I can afford go up.
To people who took subprime loans to get a house (and fueled the ridiculous price gains): shame on you. Should've seen this coming. To those that invested in funds backed by subprimes and are now losing their investments: shame on you, you took the risk, your investment encouraged predatory lending, and you got burned. I have absolutely no sympathy for anyone involved in the "housing slump". - buggiemks, on 10/10/2007, -4/+81Good! That means that those of us who were smart enough to sit on our money will be able to buy a foreclosure from someone who went out and bought a house he/she couldn't afford.
To all those people who locked into an insanely low fixed rate a few years ago -- I salute you. - carpespasm, on 10/10/2007, -2/+55does this mean that a few thousand dollars worth of wood, stucko, and drywall sitting on a 1/4th acre lot won't go for 200-500 thousand dollars in the near future?
- rotten777, on 10/10/2007, -11/+47Remember, most of this is caused by the people in the real estate business. They have raped people and made millions.
- brandonvan, on 10/10/2007, -1/+31Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor. - zoidberg
- inactive, on 10/10/2007, -1/+25Bloomberg News reported that Mozilo said, "We are experiencing home price depreciation almost like never before, with the exception of the Great Depression."
Other mortgage lenders - including Bank of America - also reported problems with home-equity loans that supposedly went to solid borrowers: http://www.baltimoresun.com/business/investing/bal-bz.ym.marksjarvis29jul29,0,2238990.story - dogstar0125, on 10/10/2007, -1/+23Anybody with half a brain has seen this coming for the last five years. We have had a housing bubble CAUSED by low interest rates and idiotic sub-prime mortgage terms that let borrowers get in over their heads. And on top of it, we have a nation of stupid consumers who have accessed the "equity" that they suddenly gained through this bubble to load up on consumer debt. Blame regulators and lending institutions. They all knew this would happen.
- licoricewhip, on 10/10/2007, -1/+22The problem has been asking prices that are too high... and wankerbrains willing to pay them... and wankerbrains pre-approving those wankerbrains for loans they can't afford. Now, prices will be forced to "reasonable" levels.
- combustion8, on 10/10/2007, -0/+20Exactly, so glad I held off.
- robojerk, on 10/10/2007, -4/+23I think myself as pretty conservative, and I enjoy living in a capitolist society. But lately I have been thinking things that go against those idea.
People that buy and sell real estate just to make a quick buck have really screwed over people like me that want to purchase a home. My only option to get a home now is to place myslef in a 30-50 year loan and be stuck in debt forever. The sad thing is this is what the banks want, they want us in debt forever so we will be a continuous source of income. - moracity, on 10/10/2007, -1/+19The housing market is only getting worse because it's allowing idiots to buy homes they can't afford...which ruins it for the rest of us who have a mortgage we can actually pay.
- Noctem, on 10/10/2007, -14/+32Yeah, that's called capitalism. They were making money because people were PAYING IT. Nobody was forcing them to buy houses.
- inactive, on 10/10/2007, -0/+17Let me cry you a river. The people that lose are the real estate agents and those that are trying to flip. If you are in your home for the long term, than the devaluation isn't going to hurt you long term.
It'll help more than a few first time buyers, it will allow MANY first time buyers to actually enter the market which will, long term, drive up that equity that you lost short term. - SpaceMonkeyZero, on 10/10/2007, -4/+20Hey Californians... That's what happens when you buy a 1200 sq ft house for $750,000 and expect it to keep going up 20% a year in value. You got screwed by your greed.
- WarpFox, on 10/10/2007, -1/+17Inflation is built into any system with a centralized bank. It's not a phenomena, it's controlled directly by the fed.
- GMorgan, on 10/10/2007, -0/+16TBH America has nothing on Britain for housing bubbles. Here many sincerely hope for a collapse because the current levels are unsustainable. When they talk about £1T worth of debt, most of that is in the housing market. However they are doing nothing to correct the situation.
Rapidly increasing prices are simply an indication of a broken market. Some interference (probably from the state) is stopping the usual forces from interjecting and bringing normality. Unfortunately people invest in bubbles and it's then political suicide to actually try and fix the market. - winmywii, on 10/10/2007, -2/+16And if you don't own and are looking to buy you couldn't care less.
- dogstar0125, on 10/10/2007, -0/+14Don't panic buddy. The housing market was in a bubble. This is a correction.
- Snarfy, on 10/10/2007, -0/+13I just bought a house. I thoroughly explained to the banker I was only interested in fixed rate, 30 year mortgage.
My initial good faith paper came in: 5/1 ARM. The banker said it was only for the estimate, not the actual loan. More paperwork later, still have this 5/1 ARM. During closing, get the closing papers, it STILL says 5/1 ARM. I refuse to sign until banker corrects it. The banker resent the same papers FOUR times before I finally was given correct papers with a 30 year fixed rate. FOUR TIMES! My mortgage is through Wells Fargo. Beware of their shady practices.
With that said, I'm now one of those bastards with a killer low fixed rate. Thanks all you subprime suckers! - diggless, on 10/10/2007, -0/+13its a tough commute from the middle of wyoming to LA and back each day.
- inactive, on 10/10/2007, -0/+13Error6601, It's exactly your type of mentality that brought this bubble in the first place. Everyone felt that they had to jump into real estate before they missed the boat as you put it.
- white1827, on 10/10/2007, -1/+14Like this silly woman in the article. "I thought it was a fixed rate loan". Federal law requires lenders to disclose the type of loan MANY MANY TIMES on MANY MANY FORMS the borrower must sign. Minimum font sizes are specified, etc. It's very clear when I hear something like this, that the person whining signed away their life without even a cursory glance at the documents.
- Error601, on 10/10/2007, -0/+13Fortunately the country is still a whole lot bigger than some over inflated areas in CA.
- Idrivearascal, on 10/10/2007, -0/+12What are you talking about? The dollar is getting...weaker...against the Euro and has for years and years.
- geekee, on 10/10/2007, -0/+12You weren't complaining when your house was going up 20% a year. It's called a bubble.
- Error601, on 10/10/2007, -1/+12It's the 1/4 acre that's worth the money. The structure normally depreciates as it ages.
- TheCash, on 10/10/2007, -0/+11I wasn't aware the realtors in this country were going around forcing people to buy larger-then-they-could-afford homes with variable rate loans at gunpoint.
Here I thought people were just forgetting the old saying 'buyer beware' en mass, without considering the meaning of the word 'variable.'
But hey, if fat people came blame McDonalds instead of their lack of willpower, I'm sure these suckers can blame the realtors too. That's sort of the trend these days isn't it... blame everyone but yourself when things go less then kosher? - 2k3john, on 10/10/2007, -1/+12Does you has a clue?
- GMorgan, on 10/10/2007, -0/+11That's capitalism. You invest in something that is over valued then you lose a lot of money when the market reasserts itself. You can be certain the market will reassert itself, it's just a question of how big the bubble will be when it happens.
- Noctem, on 10/10/2007, -0/+10Obviously, you don't understand the fundamental concepts of capitalism. It's a free, open market. If people wanted to develop these 'huge areas of free land', THEY WOULD. The problem is that they exist in places nobody wants to go.
Hey, if you're interested, there is _literally_ free land available in Kansas, with the stipulation of development within a year or two. http://www.kansasfreeland.com/ - Enjoy Tornado Alley! - SocialPoison, on 10/10/2007, -1/+11This just in: if you had to do a sub-prime loan, you didn't have enough money to buy a house.
You are not entitled to own a home as part of the American Dream. You have to earn it, and you got suckered in by a real estate agent and got ***** because you didn't read the fine print or realize that with minimum payments you wouldn't be paying off the principle.
This isn't ***** you need a degree in economics to figure out.
I hope you learned that all important life lesson, though: if a deal sounds too good to be true, it probably is.
/no sympathy. - iamnos, on 10/10/2007, -0/+10It only hurts current owners if they're looking to sell. We just bought our house, and if the market crashes, I couldn't care less. I'm locked in for 5 years on my interest rate, I can afford the payments, and have no intention of moving from this house until my wife and I are put in a nursing home by our kids.
At this point I don't give a damn what the real estate market does. It could collapse, make my house worth 50% of what I paid, and it wouldn't really matter. - punchinelli, on 10/10/2007, -0/+10"The sad thing is this is what the banks want, they want us in debt forever so we will be a continuous source of income."
Not really. Banks hate mortgages. They sell them to other companies, called the "secondary mortgage market," to get rid of them. The only interest banks have in mortgages is whatever profit gain they get from selling the loan to someone else. Your interest rate is 7%, for example, they sell it for 7.5% to another company, and collect on the .5%. The real "continuous source of income" is fees associated with deposit accounts. - crapmatic, on 10/10/2007, -0/+10Wasn't the sweet spot in the market 15 years ago? Seems like 2 years ago is right near the pinnacle of the bubble.
- CorpT, on 10/10/2007, -3/+13DId you miss the qualifier "who took subprime loans" ? No one forced anyone to get a subprime loan. If you did, that's your own dumb fault. You should have continued to live in a ***** apartment, saved up enough and had good credit. Then you wouldn't have needed a subprime loan.
- Bhima, on 10/10/2007, -0/+10I've got a friend that buys foreclosed houses in Atlanta. They are going for far less than 25 cents on the dollar. But who knows when he'll be selling them and until then they're rentals.
- addicted68098, on 10/10/2007, -2/+12i think an economy without a dependence on the housing market will be a better economy.
- edstate, on 10/10/2007, -0/+10Because even at "reduced" prices, most real estate today is overpriced. Especially in the "hotter" markets. Until a decent home comes down to around 25% of take-home income (which is a LONG way down), even the foreclosures will be bubblicious.
- Noctem, on 10/10/2007, -0/+9That's.. pretty much exactly what he just said.
- Nutmegan, on 10/10/2007, -0/+9If you expect massive deflation, why recommend cash as the answer? Isn't the value of the U.S. dollar what you're expecting to deflate?
- inactive, on 10/10/2007, -4/+13/shrug Have no plans of selling our house/property for a good 15 years anyway. We built this house 2 years ago, right at the sweet spot in the market. This only affects people who continually house hop, or flip houses, or who took out ridiculous loans while pulling in a meager wage.
- JD52, on 10/10/2007, -0/+9Comment dugg for "wankerbrains"
- SpacemanSpiff, on 10/10/2007, -0/+9Except now you live in Huntsville, AL.
- etnu, on 10/10/2007, -0/+9Median household income for the bay area: $65,000
Median single-family home price for the bay area: $700,000
It just doesn't add up! You can't afford a $4k + monthly mortgage when you're barely making $4k a month after taxes. Home prices have been driven up by investors for the last 5 years or so who cashed out their stock options before the crash. Now that the home prices are leveling off (or declining), they're going to start trying to dump those houses and returning their investment dollars to the stock market.
It's true that there's a limited supply of land, but it's not *that* limited. Unless you're living in SF proper, there's tons of undeveloped land where houses can be built. Almost all of the empty land plots are owned by real estate developers who are intentionally preventing development in order to artificially drive up prices.
The end result is that ordinary, hard working people with good jobs are forced to live in crappy apartments. I make nearly $100k, but I'm living in a 2 bedroom apartment in Milpitas that's costing me $1700 a month. This is wrong. - chalkboy, on 10/10/2007, -3/+11I hate all you Californians moving to Washington you are killing our housing market with all of your excess money from selling your homes in CA. I think there should be a 100k cash tax to move to Washington from CA.
- winmywii, on 10/10/2007, -0/+8California is way over priced. My house is probably worth 180k here, but in cali it would have sold for 500k+
- TheCash, on 10/10/2007, -0/+8And yet, somehow society managed to own property for centuries before the mortgage became the crutch it is today. Before the days of credit cards, my grandparents actually had to wait until they had enough money to buy something before they could actually buy it, and yet somehow they managed to live very happy and comfortable lives.
If you want to blame something, blame our society's need for instant gratification, fueled by the media constantly hyping individuals like Lohan, Hilton, etc like they are the end all of end all's, instead of pointing out that even though they have more money then 99 percent of us, they are obviously less happy with life and themselves then 99.9 percent of us are. Or blame hiphop and rap artists, burried in bling and living in disgustingly oppulent houses surrounded by flat screen plasma tv's on every wall and ceiling, yet still completely comfortable in attacking 'the establishment' for keeping them down. The day your bedroom becomes more expensive then the average middleclass home in this country is the day you transition from the society of have-not's and become 'the establishment.' - StudsTurkel, on 10/10/2007, -0/+8They show you in plain english what your payments will be. They also take your income and figure out what percentage of it will be going towards your loan on a monthly basis. The problem is that some places will give you a loan that has payments of 55% of your monthly income, and the people take them, but then refuse to live on that kind of a budget. If you can barely drive to work and eat ramen noddles and make your house payments then you should not get the ***** loan.
- edstate, on 10/10/2007, -0/+8He means that people who have savings, a good job, and good sense have been priced out of the market by *****.
- Winters, on 10/10/2007, -1/+8>> It's exactly your type of mentality that brought this bubble in the first place.
Yea, you can't say it any clearer than that. +digg.
All these people seeing the price go up, so they buy 75k worth of property for 250k thinking it will be worth 650k in a few years and if they don't they'll "miss out" and got it sold for 35k at an auction after they filed bankruptcy.
Yea I REALLY missed the boat there. -
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