Will The Housing Bubble Take the Economy With It?

RE:Will The Housing Bubble Take the Economy With It?

need not want — Fri, 18 Aug 2006 11:00:00 GMT

The party is definitely over. Fasten your seatbelts, and, Bette Davis, the rest is history, it is going to be a bumpy ride.

RE:Will The Housing Bubble Take the Economy With It?

need not want — Fri, 18 Aug 2006 11:00:00 GMT

My job takes me into people homes and the most repeated story is from the elderly, in modest homes. They have savings. They have children in cathedrals with choking mortgages. They talk of their fear, that monster breathing on the back of their neck. My kids are just waiting for us to die to collect an "entitled" inheritance to pay off their vulgar housing. "I am sick of it all" they say. One man said, "my children have already divided my estate, haha....it all goes to charity".

RE:Will The Housing Bubble Take the Economy With It?

Jim — Mon, 24 Jul 2006 11:00:00 GMT

Talbot mentions a possible banking collapse as a worse-case scenerio. He warns that the government doesn't have the resources to bail out more than a few major banks, he predicts a possible depression. Does anyone have any good ideas where to put money now to protect oneself against this possible outcome?

RE:Will The Housing Bubble Take the Economy With It?

MS — Tue, 27 Jun 2006 11:00:00 GMT

Reading this stuff was interesting! In general, I don't think there will be a collapse. As they say: the rich get richer and the poor get poorer. All the thesis on the housing market don't talk about gentrification. As I walk down the street, I see quite wealthy people living in VERY modest houses and, thus, they saved their money and will give it to their kids. As interest rates rise, their bank accounts will grow. How does the economy capture these easily earned dollars?

RE:Will The Housing Bubble Take the Economy With It?

Carlo — Sun, 25 Jun 2006 11:00:00 GMT

Here in South Florida the number of condo buildings that are under construction is staggering. The real estate market has come to a screeching halt. So, I ask "who is going to buy these condos"? A crash of a magnitude never seen here is about to unfold. Consider that most of the apts in the buildings going up were sold to speculators planning to flip. That party is over and all those units are also going to be on the market for sale. A tragedy of major proportions is about to unfold.......

RE:Will The Housing Bubble Take the Economy With It?

Keyness — Wed, 21 Jun 2006 11:00:00 GMT

It certainly will. US consumers have gotten into a vicious cycle of debt, cashing out on their home equity. Nowadays without home equity to cash out it is going to trigger foreclosures. Interest rates are going up and inflation will arrive as well. There is not another investment vehicle that will move the economy.

RE:Will The Housing Bubble Take the Economy With It?

old mtg dude — Thu, 15 Jun 2006 11:00:00 GMT

The one thing we all can count on is greed. Do you really think the lenders will just stand by and watch all of their ARM products slowly slip into default??-Especially when they can MAKE EVEN MORE $$$$ by refinancing the homeowner out of the mess they put him into in the 1st place and into yet another new loan product that will require ANOTHER refi down the road a year or two later. The lender products are genius for making themselves profit up front, on the back end and insuring future refi's.

RE:Will The Housing Bubble Take the Economy With It?

Phil — Wed, 14 Jun 2006 11:00:00 GMT

I think when home values to median income becomes so out of wack we're in a bubble market. I live in LA and the median home is $508K. Using conservative underwriting standards, you need about $150K in income to support that house. Median income in LA is between 39 and 52K depending on who you talk to. At some point we have to regress to the mean. People who have streched and inflated the 'stated income' loans to get into house over the past few years are going to be in trouble.

RE:Will The Housing Bubble Take the Economy With It?

John — Tue, 13 Jun 2006 11:00:00 GMT

Besides, the banks will allways create new products to counter inflation and housing costs.

RE:Will The Housing Bubble Take the Economy With It?

John — Tue, 13 Jun 2006 11:00:00 GMT

The party is not over, the market is not collapsing. Seattle is enjoying 22% apreciation right now, and has for 5+ years. True, some areas that have no real reason for their "bubble" will see some market adjustment (Las Vegas, Phoenix), but for the most part the West (best) coast is safe. According to Kipplingers, the Seattle market is ranked a "4" on a scale of 1-10. 1 being most in line with local economy and 10 being most inflated.

RE:Will The Housing Bubble Take the Economy With It?

Ed — Thu, 08 Jun 2006 11:00:00 GMT

Stupid question, but can't people just refinance these 'resetting' ARMs? I'm sure there's a fee, yes? But on a million+ home, how bad can that be compared to these looming resets?

RE:Will The Housing Bubble Take the Economy With It?

Anonymous — Thu, 08 Jun 2006 11:00:00 GMT

What is the square root of 25? If you said 5...you're only half right...it could also be -5. In the same way, the housing bubble could end in two ways. Depression or hyperinflation. Either housing prices will bust, or the dollar will bust (or both).

RE:Will The Housing Bubble Take the Economy With It?

Dave — Thu, 08 Jun 2006 11:00:00 GMT

The party is over. I've made thousands buying and selling a few houses in the last five years. I'd turn the money over into the next, but now everything has stopped. The peak everyone said is coming has come and I'm stuck paying debt service, taxes, maintence but can't rent it for even half the payment. How smart am I? How many others are in the same boat? See you in 3 years when things get back to normal and I will have learned my lesson on GREED!

RE:Will The Housing Bubble Take the Economy With It?

Glenn — Thu, 08 Jun 2006 11:00:00 GMT

In response to the commentator who said there can't be a crash because "people gotta live somewhere" let me suggest that people CAN sell their vacation homes and investment properties. Last year my friend spent $15k on a contract for a condo. Her intent was to flip the contract prior to closing. Well, nobody wants a contract for a $300k condo that's got a fair market value of $275. So, rather than close, she plans on walking away from her $15k. And who will buy her investment condo?

RE:Will The Housing Bubble Take the Economy With It?

Anonymous — Wed, 07 Jun 2006 11:00:00 GMT

I think Talbot is right on the money about housing. The recent run up has been nonsense.