"Some of the exotic loan products transfer a lot of the risks to the borrower, so you really need to gauge what amount of risk you are comfortable taking on. Are you comfortable having a lot of risk in your mortgage and a lot of risk in your market area?"
Yes or No, people? Are you willing to take a lot of risk in your mortgage by electing an exotic option?
Choise like picking an interest only loan or refinancing on a cheap teaser ARM rate being offered by slick radio advertising spokesmen with deep voices?. [Check the facts?] More to the point: Wait a few months before pledging your life away with a lifetime obligation to repay a lender. The choice is yours.
Indeed, even if prices do drop, London said, that's only going to open the door to a lot of people who have been watching the market from the sidelines, unwilling to get into the action. If prices drop, even slightly, he said, there are a lot of people waiting to buy.Guess what happens to prices when all those people on the sidelines jump in? I guess they'd rather have a home than get caught up in some idiotic bubble mentality.
Here's a little counterbalance to your scenarios of doom (from the Las Vegas Review Journal):
http://www.reviewjournal.com/lvrj_home/2006/Apr-07-Fri-2006/business/6747373.html
Median prices edge up in valley Realtors survey
By HUBBLE SMITH
REVIEW-JOURNAL
Michael Colagioia, who wants to move to Southern Nevada from Florida, was hoping to read more stories about the flattening real estate market in Las Vegas, about median home prices continuing to decline.
Those days may have already come and gone. Any ground lost in January and February was quickly recovered in March, the Greater Las Vegas Association of Realtors reported.
The median price for 2,521 homes sold during the month was $314,950, up 1.9 percent from February and up 6.8 percent from the same month a year ago.
"I said not to get excited one way or another," association President Linda Rheinberger said Thursday, "and now the return to normalcy has come true. We're about stabilized if we look at the first quarter."
Prices had dropped for two straight months from $312,000 in December to $309,000 in February, leading some to believe the "bubble" was starting to pop in Las Vegas.
Stephen East, a housing analyst for Susquehanna Financial Group in St. Louis, said he recently toured Las Vegas and found that many of his observations echoed what he saw and heard in November -- that Las Vegas is in the midst of a return to normal conditions.
The market appears more divergent with areas that aredistinctly hot and others that he characterized as difficult.
"Overall, we continue to see a solid housing market in Las Vegas thanks to a robust economy that is creating jobs and attracting significant in-migration," East said, "but we have a higher level of caution now versus five months ago, given elevated incentives and cancellations, combined with further signs of inconsistency in pricing power."
Colagioia of Florida said he put his house up for sale, but the market is slow there and not many people have looked at the house. He and his wife have decided that their careers in Florida are going nowhere and they like the opportunity for growth in Las Vegas.
"She's very excited about a fresh start here," he said via e-mail. "We both are. We found central Florida to be very boring."
Rheinberger of the Realtors' association said she'd be surprised if Las Vegas doesn't reach the projected 5 percent to 10 percent appreciation in prices by the end of the year.
The number of homes available for sale on the Multiple Listing Service grew 21.8 percent from a year ago to 17,385, association statistics show. Nearly 44 percent of homes sold within 30 days on the market, compared with 38.2 percent in February and 42.9 percent in March 2005.
Total dollar volume for March home sales was $957.8 million, down 13.5 percent from a year ago.
Topping out the top five riskiest markets in the nation were Santa Ana/Anaheim/Irvine; Boston; Nassau/Suffolk, New York; Riverside/San Bernardino; and Sacramento.
All these places suck
The chart rates riskiness based on the change in the rate of appreciation. San Diego dropped from 2004 to 2005 from a 25% rate to a 15% rate of appreciation. I have rarely read a more inance analysis in my life about anything. Risk is associated with ratios of home prices to income levels, and projections of future population growth and incomes, and the availablility of land. Just using past rates of apreciation is GIGO.