I definitely think it is funny that they only allow your max leverage to be 2:1 (overnight) when investing in stock However w/ real estate they allow much more leverage, even up to infinity (0 % down) Unreal... Isn't this the reason for the crash back in the 20s because people were maxed out beyond belief on leverage. This $hit really needs to be regulated
Housing isnt coming back till 2013......Housing prices will continue to fall for quite sometime, foreclosures havent peaked and ARMS still need to reset probably going into 2010, with energy prices skyrocketing and inflation out of control a house is not the 1st thing people want.
Here's really the scary thing, if we have another down move there might be a very large % of the population who have no equity in their home. I'm not sure exactly what the real estate market has dropped, like ~ 15%. Imagine if real estate dropped another 15%. That's 30% total, so say if you put 20% down and bought a home anywhere from 10% of the high. Now there is 0 equity in your home. Couple that with the fact that if people did buy a home in advance of the appreciation, a lot of them probably look all the equity out in the home and spent that. There are just so many people that have got to be sitting on the edge of equity in home / no equity in home and any sizeable move to the downside could set off a massive sell explosion. I wouldn't even want to guess what % of homes would be in foreclosure if we roll another 15%
the national average resale index has dropped 9% from the peak. The forecast is that it will probably drop another 7%.
I personally know many people who have lost 40% of the value in their homes. On a national basis, looking back in hindsight, those who bought homes in any of the 'hotter' markets between 2004 and 2006 have fared especially badly. Stories of people buying in 1995, seeing their housing values double or triple by 2005, and now seeing appraisals come in at the 1995 again, are not uncommon at all.
http://www.youtube.com/watch?v=pmeBSWI9sF8&feature=related Take a look at this. I went to see the fed report myself and it is very ugly. I think the next larger wave is about to overtake the boat.
I would be willing to stand up and say that it did not "became" and that its always been that way. One should never buy and borrow as much as they possibly can on anything. Not having a plan B is the real problem. I know that congress and the media cant say that people are stupid even when they are. They have to say things like the lenders made them do it bla bla bla BS. I don't think its a new saying that a fool and his money are soon parted and in the wise words of GG "they are lucky enough to get together in the first place"
You do know he wasn't a real person, only a character in a movie, don' t you? If you're right, I hope the american dream, sorry nightmare, continues for the next 100 years as well. I certainly hope somebody over there keeps working on technologies that will one day let me fly like superman. No you're right, let's go back to living in caves and to hell with the nightmare of evolution.
Yep, Subprime will turn out to be a conventional bomb and ALt-A/Prime is the nuke or neutron! Kill all the people and leave the homes standing.
Agree, people were stupid, but I think that even more than that, we've been conditioned to not trust ourselves for so long that you're almost not allowed to be smart. Everyone is always advised to listen to "experts" because they are "trained" and they "know." All the experts think renting is *so* stupid and buying is so smart. Throw on top of that all the marketing, which is really just a million different entities trying to get a piece of your money, and it's really hard to go against the grain. Capitalism is broken Of course, so are socialism, communism, and monarchy