[quote=sdrealtor]Pretty much agree except I think they were more successful in certain areas than others. For example, the low end prices got hammered and I think the high end will too. Where they were most successful was in the middle to upper middle class areas. We never got much below 20% off around here and many other metro areas saw similar things. The low end which increased the highest percentages on the backs of NINJA loans got crushed.[/quote]
The low end had zero buffer. This is where all the ZERO-down purchases were made, and where people were canibalizing their mortgages — using new debt to pay off old debt, which was only sustainable for as long as housing prices rose. They did not have the benefit of all the intervention, either, so the market was allowed to clear for the most part. By the time the declines were hitting the mid and higher-end homes, the Fed and govt were enacting foreclosure moratoriums, reducing rates to near zero, and announcing plans to “save homeowners” from themselves. That’s why the lower end collapsed more than the mid and higher tiers.
You might think that they have “fixed” the housing market, but that assumes that the problems are in the past. I contend that the “crisis” has simply shifted…it is nowhere near over, and housing prices have not bottomed, IMHO. The sovereign debt crisis is very much a part of the “housing crisis” because the housing bubble was an effect of the credit bubble. Until the credit bubble has resolved (we are not even close), the housing market will remain on shifting sand.
