“Don’t worry,” Bob reassured me, saying what almost everybody else in real estate was saying at that moment. “The value of your house will be higher in five years. You’ll be able to refinance.”
Several people fell for this red herring.. even some people that I know. Refinance to what? A greater debt load than you already have.. and that you are already having problems with?
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So true. I remember a lender telling us that exactly. I was livid. I had an argument later after we left about if the market even comes down only 5% on a half million dollar house (about median back then) we will have to come up with 25k to make up the loss in order to refinance.
And I admittedly suck at math, but how can anyone realistically think this bubble was going to go on forever. I just would not have been able to sleep at night if we bought. I would have been on pins and needles waiting for the bottom to fall out.
I just have a hard time having sympathy. I mean, maybe if you’re fresh out of school, just started working, wet behind the ears and on the very naieve side, then I can see it. You know nothing about real estate and you relied on “professionals,” then you got suckered.
I am no expert. This was just a no-brainer. Income and pricing were grossly misaligned. The prices kept going up and all I kept saying is “How can they afford it? How are they doing it?”
And well, that answer is obvious now. They couldn’t afford it and it was all smoke and mirrors and borrowed and borrowed again.
Anyone that bought should have asked that question. Don’t people know how much they make and how much they spend? This is basic math. I think most kids in elementary school can figure this out.
