Given the fact that prices went up b/c of the “credit expansion”, I don’t see how a “credit reduction” would not cause prices to go down.

On top of that, all the houses built to satisfy the demands of the speculators are not going anywhere. So, if anything, the market has more surplus now than it did before “credit expansion”.

This means that prices will over-correct.

IF prices stay high and interest rates go up, it is bad for anyone not in a home.

IF prices go down and interest rates go up it is pretty good for anyone not in a home (lower cost basis, more likely rates will go down for a refi in later years, etc).

IF prices go down and interest rates go down it is pretty good for anyone not in a home.

The housing market simply can’t sustain itself at current prices and interest rates, now with more stringent lending anyone wanting to sell or buy is going to have a much tougher time of it. But that is essentially a good thing. Those that plan ahead, keep their credit clean, and save money are going to be well rewarded.

IF prices stay high and interest rates go up, it is bad for anyone not in a home.

IF prices go down and interest rates go up it is pretty good for anyone not in a home (lower cost basis, more likely rates will go down for a refi in later years, etc).

IF prices go down and interest rates go down it is pretty good for anyone not in a home.

The housing market simply can’t sustain itself at current prices and interest rates, now with more stringent lending anyone wanting to sell or buy is going to have a much tougher time of it. But that is essentially a good thing. Those that plan ahead, keep their credit clean, and save money are going to be well rewarded.

They aren’t making any more buyers, so the price is going to *have* to come down if folks (really, banks) want to get rid of properties.

Last year I had a gut feeling things would over-correct; I’m almost certain now.

This trend will be working for years, not months. Between now and the time the trend truly reverses there probably will be at least a couple mini-rallies.

I would urge everyone to stop looking at prices as the primary measure of “progress” and keep an eye of the ratio of sales to listings. It’s okay to watch price trends for the entertainment value, but that’s just the egg – the chicken is the supply/demand dynamic.

There is a chance the pricing may decline less than some of us may think, but there is also the chance that the declines may be greater than we think too. The 50% correction a lot of us talk about only reaches the long term trend without passing it. So far, all corrections have had a corresponding overcorrection, which in this cycle would point to price declines well in excess of 50% off peak.

My opinion only – stop watching prices as the barometer and use supply/sales instead. When they approach a more reasonable level the price declines will slow and eventually reverse.

This trend will be working for years, not months. Between now and the time the trend truly reverses there probably will be at least a couple mini-rallies.

I would urge everyone to stop looking at prices as the primary measure of “progress” and keep an eye of the ratio of sales to listings. It’s okay to watch price trends for the entertainment value, but that’s just the egg – the chicken is the supply/demand dynamic.

There is a chance the pricing may decline less than some of us may think, but there is also the chance that the declines may be greater than we think too. The 50% correction a lot of us talk about only reaches the long term trend without passing it. So far, all corrections have had a corresponding overcorrection, which in this cycle would point to price declines well in excess of 50% off peak.

My opinion only – stop watching prices as the barometer and use supply/sales instead. When they approach a more reasonable level the price declines will slow and eventually reverse.

From the lending standpoint, loans of $417K or less are not difficult to get, and even larger amounts are still available.
America is not going away. Lenders of money are not going to disappear.

Rates are not going insane for those who QUALIFY.
The media will blow this out of proportion, I am sure.

We are just talking about MONEY & wealth. It’s not a terminal disease. Some people will be ruined.

Many people ARE freaking out. They don’t know what to do.
I have refi loans to submit this week, maybe they will fund, maybe they won’t. I’m not stressed. I’ve been through volatile markets before.

I’m off for a couple days in Mexico this week for some R&R and lobster & beer. The world isn’t coming to an end.

It will give some mortgage scumbags a reason to screw people by telling them it’s the best rate they can get.

Desperate times call for desperate measures. A LO that needs money desperately will try and screw people to max out their take on a loan.

Everything to a lender is risk/reward. GSE’s are still backing loans of under $417K

The more you have to put down, the higher your credit score, the easier it will be to get a loan.

There IS money available for loans. There are millions of people who will have no problem, other than reduced net worth.

There will be a period of correction. I don’t see rates exploding as housing prices fall.

(Even IF what you say was to happen, I would rather have someone pay 10% on $300,000 purchase than 6% on $500,000 one.
Either way it’s $30K a year interest, but $300K cost gives you better options. Rates will drop, but your cost won’t change)

Always remember, tough times don’t last, but tough people do.