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Those are the same issues that I found through my own research. Those factors are the reason why we are trying to sell now instead of waiting. (esp since we put $90k down on this baby)
I don't think I agree that the final leg up will be as early as 2011. What I do know is I don't want to be stuck in Georgia for years to come. Let's hope our home sells this spring. Our target move date would be early June. If we can't move in early summer, we will have to wait until next summer to try again because we are teachers.
I may be incorrect but I thought Mike was saying we are already in the midst of the final leg up, then it's back down for some time.
Most people, Mike included, are assuming the Alt-A and prime mortgage resets which begin in earnest this spring (all those 5, 7 year ARMs people took out in 2003-2005) at the same time when the tax credit + QE and MBS buybacks by the government expire will cause a flood of inventory, cause downward price pressures, another round of mortgage defaults (both strategic and hardship), government interventions, and credit contraction (which affects people who want to buy, even if they have $ to put down and excellent credit).
If you go with that argument, yeah, things will get tough again very soon. I would watch financial stocks to get a measure of where things will go. If they start to drop precipitously, the markets are looking out 6-12 months and see big troubles on the horizon.
Alternatively, I don't think the conventional wisdom on this is accurate. I think the Fed and the administration is fully aware of this problem, which is why there was a flurry of announcements about extensions to programs and widening of guarantees for FNM and FRE. The problems will get worse, but the government will continue to throw every kitchen sink they can at this problem to forestall it through 2010.
Eventually the piper will be paid, but I'm guessing we don't get the collapse or further retrenchment many are expecting this year, and certainly not before the elections. Politicians will kick the can down the road at all costs, first ensuring their re-election. They will also make sure other priorities are taken care of first - namely passing healthcare, bailing out banks and hedge funds yet again, passing another domestic stimulus program, and making a go at cap and trade.
2011 - things will get very creaky. We'll probably have one "too big to fail" bank fail later in 2011 - probably Citibank. I don't think prices crash, but there will be a paralysis that overtakes RE. Sellers won't be able to sell, and will just try to stay in their homes. Buyers will not be able to buy, due to availability of credit, higher interest rates for those who do, and lower inventory. Banks will keep holding foreclosures as long as they don't have to mark them on their books or as long as the government provides cheap credit to them enabling them to make large trading profits.
2012 - too difficult to accurately forecast yet, but it will likely be a very, very, very bad year.
I may be incorrect but I thought Mike was saying we are already in the midst of the final leg up, then it's back down for some time.
Most people, Mike included, are assuming the Alt-A and prime mortgage resets which begin in earnest this spring (all those 5, 7 year ARMs people took out in 2003-2005) at the same time when the tax credit + QE and MBS buybacks by the government expire will cause a flood of inventory, cause downward price pressures, another round of mortgage defaults (both strategic and hardship), government interventions, and credit contraction (which affects people who want to buy, even if they have $ to put down and excellent credit).
If you go with that argument, yeah, things will get tough again very soon. I would watch financial stocks to get a measure of where things will go. If they start to drop precipitously, the markets are looking out 6-12 months and see big troubles on the horizon.
Alternatively, I don't think the conventional wisdom on this is accurate. I think the Fed and the administration is fully aware of this problem, which is why there was a flurry of announcements about extensions to programs and widening of guarantees for FNM and FRE. The problems will get worse, but the government will continue to throw every kitchen sink they can at this problem to forestall it through 2010.
Eventually the piper will be paid, but I'm guessing we don't get the collapse or further retrenchment many are expecting this year, and certainly not before the elections. Politicians will kick the can down the road at all costs, first ensuring their re-election. They will also make sure other priorities are taken care of first - namely passing healthcare, bailing out banks and hedge funds yet again, passing another domestic stimulus program, and making a go at cap and trade.
2011 - things will get very creaky. We'll probably have one "too big to fail" bank fail later in 2011 - probably Citibank. I don't think prices crash, but there will be a paralysis that overtakes RE. Sellers won't be able to sell, and will just try to stay in their homes. Buyers will not be able to buy, due to availability of credit, higher interest rates for those who do, and lower inventory. Banks will keep holding foreclosures as long as they don't have to mark them on their books or as long as the government provides cheap credit to them enabling them to make large trading profits.
2012 - too difficult to accurately forecast yet, but it will likely be a very, very, very bad year.
I agree with you.
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