[quote=CA renter]The main reason for today’s foreclosures is not that people “bought too much house,” but that they PAID TOO MUCH for those houses with idiotic ARM mortgages when rates were at generational lows (the lenders were trying to shift the interest rate risk onto the borrowers).
Also, there is nothing wrong with a professional (single or couple) wanting to live in a safe, clean, decent area with similar people. Some people can move into these neighborhoods by “moving up” from starter homes, but first-time buyers who have worked many years to earn advanced degrees, have responsible positions, and who have saved up a decent down payment are just as “entitled” to live in the move-up neighborhoods as any “move-up” buyer.
While you are perfectly welcome to live in the areas you like, other people are welcome to live in neighborhoods of their choosing as well. I don’t think people are “whining” about the fundamentals of housing prices; they are “whining” about all the manipulation that is forcing buyers to overpay for housing. That’s a VERY legitimate complaint.[/quote]
CAR, I agree with you that ALL RE buyers should buy what they can afford, regardless of whether they’re considered “professionals” or not. During the recent “bubble,” many young, first-time buyers bought properties they could not afford and KNEW their mortgages would eventually adjust/reset when they signed on the dotted line. They signed anyway because the only other choice was to buy a property they could afford and qualify for under *normal* lending guidelines and this was distasteful to them. Back when I was in the “homebuyer with a young family” category, it was not possible to buy property above what our “station-in-life” afforded us. So our “expectations” never exceeded what we could reasonably afford. What we could afford was our reality and so we didn’t get involved in coveting properties we couldn’t afford.
Yes, I DO believe there is SOME manipulation of prices going on in SOME micro-markets which still have a little or a lot of distressed property which has yet to be marketed by lenders. But I also believe that the balance of “bubble distress” has all but been flushed out of SOME micro-markets and these markets are currently operating about as normally as could be expected, given the current tight lending guidelines in existence today.
