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L. Littlefield (not verified) says:
I saw prices getting out of line with incomes, as in the late 1980s, starrting in 2003, and urged friends not to buy anything. What is shocking is not what is happening now, but how long prices kept rising -- through late 2005 in much of the country, and later here.
We now know how it was possible for prices to reach such ridiculous levels -- people were lent more than they could pay back. The result will be a severe price decline.
What is different this time, how ever, is cash out spending. Back then, the only people who were affected were those who stretched to buy at the peak -- basically my generation. This time, many people with paid-off houses were enticed to remortgage the properties to live large in the short run.
These second, third and fourth mortgages, and HELOCs, will be taking 100 percent losses. Again, what is shocking isn't what is starting to happen now, but what happened before.
I saw prices getting out of line with incomes, as in the late 1980s, starrting in 2003, and urged friends not to buy anything. What is shocking is not what is happening now, but how long prices kept rising -- through late 2005 in much of the country, and later here.
We now know how it was possible for prices to reach such ridiculous levels -- people were lent more than they could pay back. The result will be a severe price decline.
What is different this time, how ever, is cash out spending. Back then, the only people who were affected were those who stretched to buy at the peak -- basically my generation. This time, many people with paid-off houses were enticed to remortgage the properties to live large in the short run.
These second, third and fourth mortgages, and HELOCs, will be taking 100 percent losses. Again, what is shocking isn't what is starting to happen now, but what happened before.