"We are looking at probably a 10 to 15 percent drop in home prices" if the proposals become reality.
Lets see, the price is up 50% over three years since I bought, and we are looking at a 15% drop? OK
Exactly. Most economists are predicting a 15%-20% downturn in the Central California housing market when interest rates go back up. Since I'm up 40% since I bought it, I'll still come out ahead.
The people who will get burned are those who either just bought, or who cashed out all of their equity. A good friend of my wife are living examples of the kind of idiots who will get burned. They bought a house in a new development before any of the houses were built. The home was far beyond anything they could hope to afford, but by the time it was built it's value was up over $100,000. They cashed out that equity, dumped it into an interest bearing bond, and now use it to pay their mortgage. In their minds, they'll simply sell the house and move when that money runs out, and they'll have spent nearly five years in a gorgeous mini-mansion at no cost to them. They're assuming, of course, that they can get everything they owe out of it AND have enough additional appreciation to buy another house and do it all over again...an assumption that's looking extremely unlikly at this point.
Yep, the doom and gloom Freepers have always had a hard time with investments doing well. I'm glad that my three properties in the D.C. area have doubled. I'll take that and a 15% drop that lasts a couple of years any day...
Doom and gloomers, keep on hiding your cash under your mattresses and we'll see who does better...