I don’t think that ‘ole George sounds too happy, does he? Calling a spade…..a spade…….. is totally different than shouting “the sky is falling” for no apparent reason. There are more than enough apparent reasons to recognize this situation as “a SPADE”.
The housing market in the bubble cities around the country couldn’t go on the way it was going because the majority of people who have been buying homes for the last few years couldn’t really afford them in the first place. If the old standard rules for getting a mortgage had still applied, this run-up in prices would have never reached this level of insanity. Not only would a large majority of these people never have been granted a loan for the mortgage, many people who purchased in CA before 2001 and actually had some real equity in their homes would not have had all this extra, paper equity and would not have been allowed to take out so many $$$$ in loans against their properties because those artificial values wouldn’t have been there to borrow against.
‘Ole George Chamberlin can point his finger and get huffy all he wants but the root of the blame lies with the regulators for ever allowing these types of loans to be generated, much less, to borrowers with sub-standard credit, no money down, no documents for proof of income, etc, etc, etc. Foolishness at it’s finest and now the market is going to fall…………I think at least 30% in the most desirable areas to live and as much as 55% in places like the Temecula area. It’s not going to be pretty but in the end, the economy will be much healthier than this artificial Fantasy-Land that SoCal & other bubble markets have been for the last 8-9 years.
