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Old Today, 12:28 PM
 
Location: Phoenix, AZ
1,839 posts, read 2,119,296 times
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Quote:
Originally Posted by C2BP View Post
You are confused. Housing inflation and hype wasn’t normal from 2001 until 2007 and again from 2010 until today. That is not normal. Housing prices deflating back to levels where most Americans can afford them again is normal. House is a shelter and not some kind of investment that Real Estate industry has created and hyped. Rampant speculation was one of the primary causes of the buying mania and subsequent collapse. We need to deflate housing prices back to levels where most Americans can afford to buy them again and we need to dismantle NAR (national association of realtors). As long as we have those shysters in place housing will be a mess in our country. Speculation in housing should be illegal, especially speculation in single family homes.

Good Luck!
Sure, the price of housing reverted back to normal, but demand and supply did not. Virtually no homes were built from 2009 through 2011 and there correspondingly was very little demand in 2009. How could there be? The overall economy was terrible, unemployment was sky high, and a ton of people were underwater on their mortgages (those that didn't get foreclosed on and lost their home) so were't even able to move. Those homes that were foreclosed on were easy pickings for investors, companies like Blackrock, etc. that snapped them up at rock bottom prices and turned many of them into rentals. Or smaller investors (many from foreign countries) who then either sat on them waiting for prices to rise, or flipped them or also turned them into rentals. Thus, it was NOT a normal market by any means, aside from the affordability piece of it. Again, though, supply and demand were so low amongst the general populace that there wasn't much that many people could do about it. Those that actually were able to buy then and had the foresight to do so did very, very well however.
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Old Today, 12:44 PM
 
3,845 posts, read 986,457 times
Reputation: 4399
Quote:
Originally Posted by ShampooBanana View Post
Sure, the price of housing reverted back to normal, but demand and supply did not. Virtually no homes were built from 2009 through 2011 and there correspondingly was very little demand in 2009. How could there be? The overall economy was terrible, unemployment was sky high, and a ton of people were underwater on their mortgages (those that didn't get foreclosed on and lost their home) so were't even able to move. Those homes that were foreclosed on were easy pickings for investors, companies like Blackrock, etc. that snapped them up at rock bottom prices and turned many of them into rentals. Or smaller investors (many from foreign countries) who then either sat on them waiting for prices to rise, or flipped them or also turned them into rentals. Thus, it was NOT a normal market by any means, aside from the affordability piece of it. Again, though, supply and demand were so low amongst the general populace that there wasn't much that many people could do about it. Those that actually were able to buy then and had the foresight to do so did very, very well however.
In most situations, you could figure out how to deal with an underwater mortgage. All other things being constant, it usually just means you cannot move without having a lump sum for both the difference and whatever it costs to move into your new place. It wasn't all due to 100% financing. It could be buying at top-of-market WITH a down payment and the price correction eating up your equity and then some more.

Now, the 1-2 punch was the job loss combined with it. People couldn't just sell and move back in with family. The underwater part prevented them from selling (due to the lump sum due). I think there was somewhat of a "frog in the pan" scenario where people tried using credit cards to temporarily makeup for budget shortfalls, not knowing it was about to get much worse. If they'd seen how bad it was going to get, there would have been more strategic bankruptcies, I speculate.

One less account to have to list and get statements for!
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