The Boom is Over, the Crash has Begun

[Mark Holmes]

Read this LA Times article:

http://www.latimes.com/business/la-fi-subprime10mar10,1,6514567.story

It’s getting to where I can post these articles all day… but I don’t think I will. There’s no point to prove anymore, the boom is over, the crash is well under way. The article points out that over a dozen lenders have gone under the last several months, easy lending is gone, meaning half-a-million dollar fixer-upper cottages are gone the way of the dodo bird. The only thing to focus on now is saving like mad for a big down payment, since lending standards are back.

[waiting hawk]

I love the term, “I told you so”.

[cr]

I just read that article myself. We’re finally starting to see people who will be forced to sell at a loss. Haven’t we been calling this all along?

And as several other threads currently state on here, it’s just getting started, particularly in LA.

I doubt we hear too many “it’s a great time to buy” comments from the peanut gallery anymore.

[Bob G]

Great artical, thanks.

“Great time to buy” phrase will never go away. Article means that mainstream media can no longer support this view. This is a hard position for them to take, because 20 percent of theier ad revenue comes from RE industry.

I.D.

[latesummer2008]

LA market is cracking… Just now starting to see 15 – 22% drops on the Westside for areas like Westchester, Culver City and fringes of Santa Monica. Check out the following link for actual sales data

http://westsideremeltdown.blogspot.com

The best is yet to come….

[SHILOH]

“Two years ago, when Lewis was looking for a larger house, she easily prequalified for a nearly $700,000 house even though she had no down payment and a spotty credit record. It helped that she was willing to take on two loans to cover 100% of the cost…….I wasn’t completely aware of the mortgage terms but I knew it would adjust in two years,” she said. “Properties were still going up at the time, so I felt it might be a good time for me to buy.”

A $700K debt with a $4000 monthly mortgage. The article doesn’t state what her income is, but one must be making a VERY good income to afford that mortgage. How can someone who earns that much….blow it soooo badly and make the statement ‘I wasn’t completely aware of the mortgage terms.”

[PerryChase]

“This credit collapse is an unequivocally important event. Because, as I’ve been writing, the ability of anybody with a pulse to get a loan for any amount is what drove the real estate market, and the real estate market is what drove the economy. Sometime in the next three to six months, the real-estate market will basically just freeze up. Of course, inventories are going to explode and prices will eventually drop rather dramatically as a vicious cycle feeds on itself.”

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NextTheRealEstateMarketFreeze.aspx

[recordsclerk]

“Two years ago, when Lewis was looking for a larger house, she easily prequalified for a nearly $700,000 house even though she had no down payment and a spotty credit record. It helped that she was willing to take on two loans to cover 100% of the cost…….I wasn’t completely aware of the mortgage terms but I knew it would adjust in two years,” she said. “Properties were still going up at the time, so I felt it might be a good time for me to buy.”

She was gambling on appreciation and didn’t care about the mortgage terms. She is just too intelligent to accept her role and is just looking to blame anyone else. The montly payment increased by $2,000 and she can’t afford it. That just shows how overextended she already was.

[gold_dredger_phd]

How was it that she had no money from a downpayment after selling her smaller home? She had zero equity in a smaller house and she was trading up?

She needs to get three room mates to pay her $700 each and then she can stay in the house. I know people back in Palo Alto that were renting out their houses for money even as far back as 1998 to make money.

Stories like this warm my heart. : D

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