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What crossed my mind when I saw it was "this is the most bugged out ish I have ever seen"
So, my question is, if SOME people are going to this extreme, what is going to happen when things really heat up? I read a article where the maker of private home owner exotic loans was interviewed. They asked him does he think this thing is almost over. His remark was, "if this was a baseball game, we are in the national anthem, the game hasn't even started". So my question is, how far do you think this is going to go? More of what was seen in the video, ghost towns, what?
I don't think a majority of Americans are going to commit arson. I also don't think a majority are even going to walk away from their homes. I believe that home prices will fall some (unevenly by % throughout the country) and then perhaps be flat to no gains for a few years. In 10 years (max.) I would think prices will be appreciating again at regular/historical (4% - ish) levels.
Do I think that a 1/2 million dollar home (a true one that should be worth that - 4000 sq foot, nice landscaping, large lot, lots of upgrades) is ever going to sell for $80K? No -not really.
Do I think Starter homes (1200 sq feet, few upgrades if any, older parts of older towns) will begin to be more reasonable (back to $100,000 - $120,000) in a lot of areas? Yes.
But it will depend where you are, how much the run up was in those areas, what kind of jobs/incomes there are to support prices in the future, etc..
Do I picture the USA which has always placed such a high value on OWNING land/property will suddenly turn into a total nation of renters??? No. Will 5% of citizens convert to that philosophy? Maybe.
The news always show extreme cases to get ratings - I doubt we turn Lord of the Flies any time soon.
Currently the last stats I heard is 9 million homes are currently upside down on there loans. Which means they owe more than the house is worth. 5 to 6% of US homes have defaulted and are very close to Foreclosure.
loans made in 2005 had 2/3 year ARMS. The resets started happening last summer.
Now do 2006 and 2007. We are just at the beginning..remember it takes 9 months to get a home foreclosed and there's a backlog now.
So my question is, how far do you think this is going to go?
How far in terms of people committing desperate acts or how far before this market will stabilize?
While this IS a depression era housing market ... it's actually a good thing. These people were debt junkies who had no business owning homes in the first place.
People who were responsible will now have great buying opportunities. Prices are falling so fast that houses are becoming affordable very, very quickly.
In the end ... this will actually be great for the economy.
I foresee riots, arson, looting and general civilian unrest.
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