I'll offer this information from another perspective.
Don't be so sure that people are done tapping that HELOC atm first. I don't know how it happens, but it appears there is still some HELOC tapping going on. Don't ask how I know, but my neighbor (whom I despise) I just learned recently tapped into an Heloc for around $150k. I was a little surprised he/she was able to pull this off, but I guess because in CV sfh haven't fallen that much to make this unattainable.
Here's the sort of pattern that I saw since 2004…It's pathetic. Neighbor buy all sorts of crap from tv's, toys for kids, and landscaping. In case you folks missed it, these were the neighbors that I b!tched about earlier on this board that cut down a city tree, planted other expensive plam tree/magnolia crap that has root problems right on the property line, etc, despite the fact the the lot is soooo damn tiny, the landscaping doesn't really fit. They spent a fortune on the landscaping that is really doesn't fit the profile of their home.
The hubby is an architect (well, at least he says he is) and the wifey doesn't work. The story behind this neighbor was that originally they were going to buy the house we eventually bought, but didn't think it was good enough and ended up overbidding by $100k on the next door house. This was back in 2004. Then end of 2005, hubby said he was considering selling the home for(after trashing the yard), because they wanted to move to OC. I later found out was because the hubby became sort of unemployed. Obviously, he wanted to sell the home himself and save on commision, and despite how he trashed the yard, he wanted 1.1million. Needless to say, I'm happy to report there wasn't a greater fool to buy that thing back in 2005. And 2006 came around, and there was no way in hell he would be able to sell. Then I started to notice he was behind in prop tax payments. And then all the sudden, they were paid off ( I guess he tapped his HELOC from, yup you guessed it Countrywide). And yet, he's making the minimum payment on the HELOC (interest payments only), such that the principle balance isn't going down. He used the HELOC to "redo landscaping: and doing some remodeling and a couple of other things (which utterly was crap, because he is the sort of the do-it-yourself type person that ultimately spends more on something than if he were to hire a real professional), and yet tap tap tap HELOC. They are again this year late on their tax payments, and yet the other day, he was telling me about how he was going to spend more money on "improving" the home was asking me how much I paid to get my house repainted because he wants to spend $15000 to use this texture-coat paint that supposedly has a lifetime warranty, tapping again into the funds he has off the side from the HELOC.
Some people, you give them a buck, they'll spend 4 and never ever learn. Incidentally, I sort of hope that home ends up in foreclosure and I can get a good deal on it. It would be enough for me to tear down every ugly landscaping that they put on the property line and other things, and I would love to take a swinging axe to a lot of those things.
