It seems logical, that the loss will be slow at first, pick up some speed as ARMs reset, and then really get going as more people bail out and the psychology shifts from “RE only goes up” to “RE is a terrible and risky investment”.
Did you see Saturday’s U-T? Investor Gene Burns, featured in the House section:
“I always say: follow a Hummer and you’ll find a pre-foreclosure home.”
After making a bundle on Las Vegas real estate, investor Gene Burns has his eye on Southern California, and his reasons may not be good news for local homeowners used to riding a wave of appreciation.
“I’m planning on buying San Diego property when the market goes through the correction that will start in the summer of 2006,” he said. “I think it will crash in 2007.” “A lot of 32-year-olds bought a house for $800,000 and they just can’t afford it,” he said. “In 2007, their adjustable rate mortgages will start to adjust upward and they won’t be able to find that extra $500, $800, $1,000 a month to make the mortgage.”
Most borrowers aren’t planning ahead and they will be stunned when their mortgage payment rises, Burns said.
“I like that town by Encinitas, below Oceanside, with all the new construction,” he said. “Carlsbad – there will be lots of people who are upside down in their mortgages there. ”
He also said he had his eyes on Carlbad as the zip code to go down first.
