Also, be sure to read the Union Tribune Sunday Business section front page article titled, “Happy New-ish Year.” A short quote:
“And it will come as little surprise to San Diegans that a big reason for the slowdown is the sluggish housing market.
Already, the deflation of the housing market is having an impact on employment, retail spending and economic growth.
Thousands of construction workers and real estate agents have lost their jobs. Consumers who once relied on home equity loans are keeping a tighter hold on their wallets. And economists estimate that the housing downturn shaved 1.2 percentage points off the economic growth rate during the third quarter.”
The story contiues on in great length. One thing that was not mentioned, however, was the sub-prime mortgage lenders going bankrupt.
“Consumers who once relied on home equity loans are keeping a tighter hold on their wallets.”
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A better metaphor would have been, “Consumers who once relied on home equity loans are throwing away their fountain pens used to sign the exotic financing docs.”
Actually, I’ve started a page keeping track of the (subprime) mortgage lenders that go bankrupt (or otherwise shut down abnormally). I plan to keep this pretty updated — please send information!
I love that the realtor is anonymous. A measure of protection against a backlash from good ol’ Mr. Lerah?
Finally some truth on the situation though. I’m tired of hearing about this so called “soft landing,” and that rates will probably go back down. The FED would be obtuse to slash rates again, because Americans need to start saving money, not spending it on houses they can’t afford again.
Just like there was no bubble, now there IS a soft landing, and an end to the decline. These people have dug themselves holes, and they are still falling to the bottom of them. It feels soft because they haven’t hit it yet.
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