I have recently applied for a new home mortgage and had no less than 6 brokers calling everyday. I just don’t see it as that bad if you saved your money and choose this time to invest.
I guess we see things differently. To me, 6 brokers calling daily shows a level of desperation on their part due to a severe slowing of the real estate market.
But let me back up... When you say “I just don’t see it as that bad”, you make my point that people don’t have the time or don’t have the desire to understand how severe this financial crisis is.
You have to look beyond today and ask if think will be better in the near future. Back in 2005, a hell of a lot of people looked at ever-appreciating houses and thought it would happen forever. They took a present trend and assumed or convinced themselves it would continue and the trend would not change.
I don’t know where you live and I’m sure you think you got a bargain on your new home, but it remains to be seen if it is not a bad time to invest. If housing looses 30% due to this extreme liquidity crisis that twice now — with Bear Stearns and again with Fannie and Freddie — have threatened to destabilize the entire financial markets and ripple through the economy. Bernanke said as much about Bear. He didn’t need to say it about Fannie and Freedie and the lions share of home mortgages they hold.
So, you are looking at trends today and you have come to the reasoned conclusion that it is a good time to invest. I am trying to be as informed about the impending insolvencies throughout the financial sector in the USA and abroad (Bear, Fannie, and Freddie are just the tip of the iceberg), and I am deeply concerned that the bottom in house prices, and in stocks, and the potential destruction to GDP is simply horrendous.
I’ll be so very happy to eat crow and say how wrong I was and nothing happened but a very mild recession. But I don’t believe that after all I’ve read.
And since I am such a gloomy guy, try reading this with half an open mind and tell me what you think about the future state of our economy.
http://www.eurotrib.com/?op=displaystory;sid=2008/7/15/164823/245
I can support your experience. A modest townhouse (even smaller than mine which is saying a lot) went up for sale just down the street. There were three offers in one week. Neighbors across the alley put their two flat up for sale on the Southside of Chicago. With in one hour of it being on the market they had seven offers. They are in the process of buying a condo. It took about half an hour to get the loan from JP Morgan.