'Perfect Storm' Brewing in Home Defaults

Las Vegas Business Press ^ | March 27, 2006 | Valerie Miller

[stainlessbanner]

I'm on several distro lists from RE Agents and their email notes and news articles have soured a bit. They now use terms such as "balanced housing market", "equilibrium", "steadying" and "moderate increases."

I think aggressive mortgage packages have allowed more folks get into houses they would not otherwise afford. It worked for a little while, but I think cost increases in other household budgetary areas are putting pressure on mortgage payments.

I also think too many folks were playing "RE investor" based on what they learned on late night infomercials. They might get stuck holding some properties longer than they intended and/or not making the profit they expected.

[ex-Texan]

More problems for the mortgage biz in general. More layoffs happened in the past few days. GM is under the microscope. A grand jury probe is underway.

[Toddsterpatriot]

So this means the real estate market collapse will start in October 2003?

[Petronski]

You don't respond on facts. You just lay on more supposed insults.

If those search engine rankings have been manipulated, then they are not measures of popularity. It's roughly like hacking ones grades in the school computer and then using the inflated report card as proof of intelligence.

[Toddsterpatriot]

Pimping an incomplete writing project as a finished "book" ought to be made a crime.

What do you know about crime?

[Petronski]

I didn't even bother with that one. He has become incoherent.

[steve-b]

Obviously owned by someone who can't even afford to paint it a decent color.

[SunTzuWu]

Well said, Petronski! (I'll leave it at that.)

[ex-Texan]

So this means the real estate market collapse will start in October 2003?

You statement is a non sequitur. Leaking was just beginning in some regions of the U.S. Look at that old thread. Other were saying back then that it was starting. It may have begun for real by late 2004. But Greenspan pumped up the bubble by pushing ARM loans and interest only loans in March, 2004. Never before in history did a Fed Chairman personally sell exotic mortgages to America. The results are obvious to almost everybody. Except those in the mortgage biz and/ or real estate biz.

[PAR35]

The high prices on the coasts (with the exception of the DC area) are largely driven by the regulatory structures in those areas. It's just too difficult to get the permits needed to construct new housing.

As you have noted, in Texas it is different because you can go out in the rural areas, buy a section of land, and develop it. In much of Texas, water is the only potentially limiting factor.

It is classic supply and demand. Until the demand drops or the supply chokepoint (government) is loosened up, the prices will be held artifically high in those areas.

In DC, more of the pressure is on the demand side, with the growth of government and government dependent businesses.

[Centurion2000]

Greenspan advised homeowners to refinance into adjustable mortgages just as interest rates were beginning the big upward move.

Then he was a complete moron. Anyone that can do math can see that an ARM bought during a 40 year low is NOT going to be stable. Thank God for 30 fixed loans.

[Toddsterpatriot]

But Greenspan pumped up the bubble by pushing ARM loans and interest only loans in March, 2004. Never before in history did a Fed Chairman personally sell exotic mortgages to America.

LOL!! You're cracking me up!! I must have missed his call when I got my mortgage.

[ex-Texan]

That is why Greenspan is known as Mr. Bubble to his critics. Ben Bernanke is known as Helicopter Ben to his. He once said to save the economy he would dump greenbacks from helicopters. He may have acted already, at least that is the latest rumor over at DU. Supposedly, the subject of printing $2 trillion in greenbacks is top secret.

[ex-Texan]

You must have been snoozing. Everybody else got his "Call to Arms." Americans by the millions bought it hook, line and sinker.

[Toddsterpatriot]

He once said to save the economy he would dump greenbacks from helicopters.

To save the economy from what?

[Toddsterpatriot]

Darn that Greenspan, ruined your perfect prediction. LOL!!

[listingright]

Supposedly, the subject of printing $2 trillion in greenbacks is top secret.

[Taliesan]

Let's all at least agree to stop using the phrase "The Perfect Storm".

[Toddsterpatriot]

He may have acted already, at least that is the latest rumor over at DU.

What's your screen name on DU? Do you also hype your website over there? You probably get a lot more agreement over there, don't you?

[ex-Texan]

That is the latest rumor over at DU. I do not believe it. But it may be all over the web tomorrow. On the other hand, foreign investors may decide to pass on buying more U.S. debt.