[quote=deadzone]It’s funny how the real estate types like to poke holes in the “reset chart”. Here are the usual lines:
1. It doesn’t affect all areas
2. Most of those loans have already been re-financed to fixed
3. The reset will actually lower payments with current interest rates.
Well there is some truth to all three. BUT, there is not any empirical data to prove how much of those bad loans have been cleaned up. And for any of you potential home buyers out there, given the data prsented in the chart, you would be advised to wait out till at least 2012 to get serious about buying (if you can hold off the nagging wife).
Point is this, regardless of what the realtors say, that chart is pretty clear and there is a very real possiblity for a large price drop in the next two years in all areas. Furthermore, NOBODY, not even the housing bulls are predicting any significant price appreciation in the next two years.
So why risk it? The downside risk clearly outweighs the upside.
(sdr need not reply with his “my home is not an investment” lecture, heard it 1000 times before).[/quote]
If you could buy a large well built custom estate home west of the 5 in NCC built in the last 20 years on about 1/2 acre, the kind that very rarely comes on the market at any price for better than 40% off peak and 20% below current appraised value would you still say the downside risk clearly outweighs the upside?
