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The Cleaner Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:19 AM
Original message
Hold On To Your Butts: Housing Bubble Burst is NATIONWIDE >>
Edited on Sun Aug-20-06 10:20 AM by The Cleaner
There's no doubt now that we are witnessing the anticipated bursting of the housing bubble. Amongst those who recognized this as a bubble, debate raged as to whether or not the housing bubble is nationwide or restricted to the "bubble cities" that have seen skyrocketing housing prices - DC, LA, San Fran, Boston, NYC, etc. Many said this housing bubble crash will only be felt in these "bubble cities."

Dallas was never a "bubble city." Prices have been fairly stable here the last few years, and has certainly not seen the insanity of the other markets. But at the same time, Dallas is now seeing record foreclosures indicating that the deflating housing bubble was indeed a nationwide phenomenon.


North Texas Sees Record Foreclosure Rate
(Addison, TX) -- Residential foreclosures are at record levels in North Texas -- up 30 percent from this time last year. According to the "Dallas Morning News," over 38-hundred houses may be foreclosed over the next month which would bring the total foreclosures for 2006 to more than 28-thousand. George Roddy, president of Addison-based Foreclosure Listing Service, says the situation is bringing back what he called the "nightmares of 1988 and 1989 when homeowners lost their properties during a regional recession." This time, the foreclosures are blamed on poor financial planning and rising living expenses.

Source: http://cbs11tv.com/localbriefs#story1
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elehhhhna Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:23 AM
Response to Original message
1. These forclosures are more due to HOME EQUITY borrowing than
anything else, which was, btw, ILLEGAL in TX until just several years ago.
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The Cleaner Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:30 AM
Response to Reply #1
8. Actually here in Dallas it's a variety of factors...
And they are all national issues.

Rising interest rates, increase in subprime lending, increasing mortgage rates under ARMs, salaries not keeping up with the cost of living, and nobody informing home buyers of the high financial risk they are taking on.
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Toots Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:39 AM
Response to Reply #8
14. Are any of the reasons lower home values?
To me that is when the "bubble" bursts. When house values start declining, not just when forclosures occur.
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Gormy Cuss Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 02:24 PM
Response to Reply #14
29. Yes, that's why there is argument on the "bubble bursting" description.
Edited on Sun Aug-20-06 02:24 PM by Gormy Cuss
A burst is sudden and catastrophic and historically it meant that values decline. In many large markets the worst that has happened so far is that appreciation has slowed to a crawl. That's not a bubble bursting. Markets with high levels of foreclosures usually end up with negative appreciation rates but not always. Areas where demand is still relatively high can absorb those foreclosures without a decline in value.
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The Cleaner Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 09:11 AM
Response to Reply #29
40. In many markets prices ARE dropping.
And when you have a neighborhood full of foreclosures, what do you think will happen to home values? Down they go. That is established fact.
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Gormy Cuss Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 09:16 PM
Response to Reply #40
57. When you have an area that moves from a position of
high appreciation rates to high foreclosures in short order,say 2- 4 quarters, that's a bubble bursting. Similarly if an area goes from high appreciation (say 20% year to year) to negative appreciation in a few quarters, that's a bubble bursting.

What is happening in most markets is that appreciation has slowed, and/or the rate of foreclosures has increased but not to the point where there are MANY properties losing value or going into foreclosure as a percentage of total properties. That is why the image of a bubble bursting is less appropriate than a bubble with a slow leak. I was commenting on the inaccuracy of the "bubble bursting," not the health of the residential real estate market. On a national level, there's no question that the residential real estate market is long out of the go-go phase of recent years.

I live in a state where the foreclosure rate is 60% higher than last year, which sound disastrous until one reviews the long term data -- that enormous increase just brings the state back to the level where it was four years ago and the foreclosure rate is still substantial lower than the 20 year average. So, the foreclosure rate has increased (never a good sign) but there has been no corresponding decline in market values. Rather, the market values have failed to sustain the 20% year-to year rates and are instead at 6-11% in most major markets. There had yet to be a decline in value because the pent-up demand is so strong.
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Subdivisions Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 01:38 PM
Response to Reply #1
26. And why do people take out home equity loans?
I'd wager to say that it's because they are middle class and to survive, middle class have to constantly put themselves further and further in debt.

Home equity loans are often an option when someone is in a desperate financial situation. I think the middle class, in general, has reached that point.
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soothsayer Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:25 AM
Response to Original message
2. Well, as a renter, I say GOOD, but I feel for you owners
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madrchsod Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:26 AM
Response to Reply #2
4. actually rents are going up across america
people have to live somewhere if they lose their homes...
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Rockholm Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 06:25 AM
Response to Reply #4
35. It's called Supply and Demand.
When housing inventories rise the selling prices fall. When the inventories tighten, the prices will rise again.
You have noticed the rental market. Very good catch. When more people decide to rent rather than own (for whatever reason) rents will go up. Once more people ask "Why am I renting? Housing prices are where I can afford now" they will then start buying real estate again. It's a tipping point.
When housing prices drop, rents go up. It is a cycle that repeats itself.
By the way, real estate is LOCAL. Houses are staying on the market a bit longer than last year, but prices in Massachusetts, at least in my county, have dropped a mere 1%.
No bubble burst here. And as far as those CHEERING a bubble burst. Shame. Seems to me that these people missed the boat a few years ago and are kicking themselves.
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The Cleaner Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 09:18 AM
Response to Reply #35
42. Very funny! And dumb.
Edited on Mon Aug-21-06 09:20 AM by The Cleaner
Seems to me that these people missed the boat a few years ago and are kicking themselves.

I'm renting and love it. Who needs the stress? I have seen such insanity in the housing market and I am personally GLAD I didn't fall for all the lies fed to the sheeple by realtors, etc.

Foreclosures are at an all time high. Salaries have not kept pace. People are seriously in debt and their mortgage payments are going up. They were tricked, lied to into buying a home without knowing the risks.

How about negative equity? If homes fall in value below their purchase price, people not only owe on the second mortgage but now have NEGATIVE EQUITY...they will be living in a home that is LOSING MONEY! They can't sell the home - so what do they do?

When this thing really gets going there's gonna be a lot of pissed off people out there, alot of broke people, alot of bankrupt people.

Phew - glad I missed THAT boat.
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Rockholm Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 11:11 AM
Response to Reply #42
44. Even funnier...And dumber.
I'm renting and love it. Who needs the stress? I have seen such insanity in the housing market and I am personally GLAD I didn't fall for all the lies fed to the sheeple by realtors, etc.

Happy you're renting. That is a personal choice. You have a roof over your head. But what lies are you referring to?

Your second paragraph is so riddled with holes. Foreclosures may be at an all time high in PLANO. Where is Plano anyway? Sarcasm. People get into debt for many reasons.

Equity is equity. Negative equity? Well, they would only "lose" money if they sell their home below asking price. If you bought a house at the beginning of the year and you try to sell in certain markets now, you might just well lose money. I went to college in Houston in the early-mid 80's. People were walking away from their homes because they had lost tremendous amounts of value. Today, the housing market is nowhere near that. Never will be.

Second mortgage? Equity loans? Bad spenders, as far as I am concerned. They are spending the profits that they have made in real estate.

Naturally, renters, who have no stake in the housing market, tend to be the ones jumping up and down hoping for a massive correction. Why do you want this to happen?
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LSK Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 12:12 PM
Response to Reply #42
46. what stress??
:shrug:
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stop the bleeding Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 01:13 PM
Response to Reply #42
51. hmmm lets see
owning a home with a fixed rate vs paying someone else's loan through the guise of renting - OK much clearer now :rofl: :rofl: :rofl:

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mccoyn Donating Member (512 posts) Send PM | Profile | Ignore Mon Aug-21-06 01:15 PM
Response to Reply #51
52. ... and investing the difference.
You missed that important part. It varies from market to market, but there are lots of places where you will make more money with less risk by renting and investing the difference.
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stop the bleeding Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 01:32 PM
Response to Reply #52
55. examples please of where/how
Edited on Mon Aug-21-06 01:35 PM by stop the bleeding
you will invest the difference - I am curious now.

on edit: I guess I am an exception we bought our house in late 2003 - our fixed mort is lower than 95% of the rents/renters around here.
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Zynx Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:26 AM
Response to Original message
3. I always said people would be shocked by the scope and depth of
the decline. The conventional wisdom is always wrong on bubbles.
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survivor999 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:27 AM
Response to Original message
5. What happens to these houses
After foreclosure? Anybody know? Are they sold at low prices by the mortgage companies to recoup what they can?
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elehhhhna Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:34 AM
Response to Reply #5
11. They're resold to recoup...but often are not maintained while the banks
hold them. We had one on our block a few years ago and the bank people: never locked the doors, NEVER had the grass cut, never did a THING to maintain the property for the 6 months or so that they owned it. We did it ALL.
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catmandu57 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 01:30 PM
Response to Reply #11
25. Great
I was just thinking about the dump next door, and how it would finally be maintained if it was foreclosed on. The woman who owns the place has had the grass mowed twice this year, currently you could lose a small child in it.
She's a classic slumlord, give me the money and doesn't give a rats ass about anything else, the quality of her tennants is falling as well, the word is out on her she's desperate to rent the place.
Right now there is an overabundace of rental units in our town a new complex with over three hundred units will be opening next month, and they put this dump to shame.
Apartments sit idle here forever, there is a glut, landlords are giving all kind of incentives, free cable, free months etc...
She's going to be foreclosed, it's just a matter of time, it sounds like it'll be out of the frying pan and into the fire, I just hope if the place goes up in flames the wind is blowing away from us.
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stepnw1f Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 01:07 PM
Response to Reply #11
50. We Had One Across the Street from Us
Just got sold after more than a year. (Boston, MA)
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napi21 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:35 AM
Response to Reply #5
12. Yes, at least that's what happens to them here.
The lein holder holds a foreclosure sale, the one's I've known have been auctions, and the property goes to the highest bidder. The remaining $$ owed to the lein holder remains as an outstanding debt to the original property owner too! I've seen that happen toa number of people who bought more expensive cars than they could affordand ended up having them repossessed. They were REALLY CRYING when they found out they still had to pay the bank the difference between what they owed and what the car actually sold for! Paying for something you no longer have is NOT FUN!
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spanone Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:27 AM
Response to Original message
6. Good, now they can live in their huge SUV's. McMansions to the homeless.
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Rockholm Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 06:30 AM
Response to Reply #6
36. Actually, the rich a not the ones facing foreclosure.
It is the middle class and who are affected by this. The middle class who took out equity loan after equity loan will be hurt enormously. The lower class who bought into the American Dream should be just fine.
If you own your home and plan on living in it, you have no worries. If you bought your home three years ago and have refinanced 10 times and have no equity, you could be screwed.
If you bought more house than you could really afford with a no money down, 1 to 3 year ARM, you could be screwed.
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Kajsa Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:29 AM
Response to Original message
7. I live in a "bubble area", which has seen prices
skyrocket 200-300% over the past ten years.
Typical mortgage payments of housing in my area
are $4,000/mo.

Those who are hurting now took out home loans with variable interest rates.
The rates have gone up and many are not able to make their mortgage payments.

The "interest only" loans are madness!
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hatrack Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 08:38 AM
Response to Reply #7
38. There's something worse - the negative amortization loan
It's a loan with the interest rate set so low that it doesn't cover the cost of the loan. So, the difference between what you pay and what the loan cost gets added to the principal at the end of each month.

No, I'm not making this up. And the best part? One of the trade names for this is the "Smart Loan".

For the ultimate in real estate absurdity, check out http://www.burbed.com

Absolutely brilliant website!
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Kajsa Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 01:03 PM
Response to Reply #38
48. Thank you for the link.

This has a lot of information
regarding the inflated housing market,
especially in CA.

"Smart Loans" aare only "smart " for the lenders.
What a ripoff! Grrr.

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dkofos Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:31 AM
Response to Original message
9. We seem to set new records for foreclosures every year in
north Texas.

But the economy is BOOMING.

Just ask any republican.
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patricia92243 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:31 AM
Response to Original message
10. No job = can't make house payments. What is hard to understand about that
No job is nationwide, so the housing bubble burst is nationwide.
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bridgit Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:39 AM
Response to Original message
13. Good, now maybe hubby & i will be able to get a house...
:bounce:
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acmejack Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 12:16 PM
Response to Reply #13
22. Do you realize how you sound?
People's lives are being destroyed, happy for you & hubby, but wow...
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bridgit Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 12:40 PM
Response to Reply #22
24. you should have been here in town the last time the market crashed...
as a result of an artificially inflated republican economy, the late 80's early 90's, maybe you were watching, maybe you weren't...it wasn't pretty then either

you should hear how you sound = to my ear, a snot nosed know it all
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earth mom Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 01:42 PM
Response to Reply #24
27. Don't forget-a lot of average liberal folks have put their life savings,
Edited on Sun Aug-20-06 01:45 PM by TheGoldenRule
heart and soul, blood sweat and tears into their homes and that is nothing to laugh about. I don't like what the THUGS have done to this country with their looting of the treasury, crooked book keeping and slick numbers game which doesn't show the true state of the economy, but I sure as hell don't want to see even more people be hurt by their greed, that's for damn sure!

NONE of us should.
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bridgit Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 02:07 PM
Response to Reply #27
28. there's clearly no body laughing here, hubby is a loan officer and...
is able to confirm...the entire game is setup on behalf of the money lender let there be no mistake; at his one & only appearance before the NAACP, bush made sounds like he cared to make it easier for people to be able to understand "the fine print"...there can be no further doubt, that the fine print, while it can be understood, is itself established primarily for the lender, so sure...

people throw in with every good intention & desire to pay their mortgages in a timely manner, till some idiot son of a billionaire comes along and wipes the entire slate clean, nest eggs & all, but for he & his donor base

stay the hell away from those variable rate instruments is my thought, cause with the rates having bounced around like a rubber ball these last-some cycles...people are loosing their ass due to the avarice of the investor class, and their insufferably rigid fine print

hubby also, perhaps a bit of topic but; lost a house in oregon because the check for the fire insurance bounced by .06cts...that's six (6) pennies, he made the matter right in timely due course, but was forced to sell at the barest of cursory 'profits', so indeed...

no one is laughing here
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acmejack Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 06:07 AM
Response to Reply #24
30. You see the difference here?
I made my point without personally insulting you, which I would add is contrary to the rules. Always nice talking to a someone like you, when I was just trying to make a valid point which you would realize it is if you would merely think about it a moment and stop flinging gratuitous insults. You have a great day.

Snot nosed know it all=aka acmejack
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bridgit Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 09:14 AM
Response to Reply #30
41. whatever...
:rofl:
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acmejack Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 12:46 PM
Response to Reply #41
47. self delete
Edited on Mon Aug-21-06 01:12 PM by acmejack
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bridgit Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 01:05 PM
Response to Reply #47
49. works for me...
:thumbsup:
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Kingshakabobo Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 09:39 PM
Response to Reply #30
59. Don't bother. Clearly, you are dealing with someone with issues....
Anyone who would jump for joy at middle class people getting squeezed is not worth arguing with. Also, consider that you are dealing with someone not even bright enough to keep THEIR home insured. LOL.
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bridgit Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 10:04 PM
Response to Reply #59
60. imo both of you people are completely off the map, there is no...
Edited on Mon Aug-21-06 10:07 PM by bridgit
indication that ANY of these allegedly foreclosed-upon individuals will not be given every opportunity to alleviate themselves as much as they are able from the various instruments they have themselves signed on to (as a post mentions below perhaps, or likely having assumed more than they were able to pay to begin with)...they will simply be forced to take far less than they may have originally thought, and it is sometimes just that simple; is this a veil of tears this world? of that there can be no doubt...

imo both your essential arguments need to be taken up with mortgage houses, lobbyists (you know, people that have already maneuvered around your concerns in advance), or perhaps the congress of the united states of america, which is where these various laws & the hardships they create, are originated; and rather not bickering endlessly...imo...of course
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mtnsnake Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 06:16 AM
Response to Reply #22
31. Oh come on. You gotta be kidding!
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Momgonepostal Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 01:40 PM
Response to Reply #22
56. I'm a home owner but can't fault anyone for feeling that way
Home prices are ridiculously high. Can you really blame someone for hoping they drop a bit? Homes aren't supposed to be a short term investment, or even a 401K.

I live in a town where only about 3 percent of the population can afford and average priced home. I can't blame the other 97 percent for hoping for a market correction.
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madokie Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:40 AM
Response to Original message
15. New home construction is what has been fueling what little
employment we have now, our economy it is a fixin to get shittier than it already is.
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SpiralHawk Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:42 AM
Response to Original message
16. Thanks a pantload, Republicons
Edited on Sun Aug-20-06 10:44 AM by SpiralHawk
You have driven up America's debt and deficiet, and trashed the housing market while oil prices skyrocket and you fat cats reap massive pork and oil profits.

Never let me hear a republicon refer to themselves as "conservative" The are reckless fiscal radicals, and they have tosed America's economy in the global crapper, while making sure that they have lots of fat for themselves.

Fat Cat Republicons
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mike_c Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 10:50 AM
Response to Original message
17. this is needed and necessary, IMO-- unfortunately, I doubt it will go...
...far enough. Personally, I'd like to see the real estate market collapse utterly. Fewer than 14 percent of residents in my county can afford a median priced home here now, and I live in a relatively rural county-- not in a high priced urban bubble. I'm a professional with a very good job, and I can't afford a home in my community. It's ridiculous.
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Kickoutthejams23 Donating Member (354 posts) Send PM | Profile | Ignore Sun Aug-20-06 11:41 AM
Response to Reply #17
18. I agree
I live in a bubble area and it is Hurricane insurance rather than interest rates that are really killing us. (despite the fact we haven't had a hurricane since 1923. Housing costs skyrocketed past the ability of people to buy them and with a new construction boom over the last few years supply is way ahead of demand (esp at inflated prices)The market will correct itself rather sharply and overall it will be a good thing for most people in the area. Except for those individuals who bought at the top.
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Mayberry Machiavelli Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 11:45 AM
Response to Original message
19. I think what you are seeing in Dallas is overleveraged lifestyles bursting
and not so much the housing bubble, although that I think is starting too.

Prices did not "bubble" in the Dallas area like on the coasts. They will no doubt come down with the inevitable reckoning though.

People in N. Texas are very materialistic, and are frequently highly leveraged to get their large home and fancy cars.
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sendero Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 06:20 AM
Response to Reply #19
33. I agree with you....
... I've lived here for a long time. Dallas is utterly INFECTED with the $500-a-week millionaire syndrome. Folks here are caught up in looking prosperous whether they are or not in a very big way.

I didn't think the "bubble" would hit here - and frankly what is happening here really isn't a "bubble bursting" because we never had crazy house-price inflation here.

What we did have was folks buying houses too big for their income, using risky mortgage instruments (getting an ARM when rates are at historic lows is the height of financial mismanagement) and a generally soft economy.

The scary thing is that this could really snowball. A correction to sanity in the housing markets would be an overall good thing, a general collapse would be disastrous.
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Lisa0825 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 09:24 AM
Response to Reply #33
43. Yeah, I lived in Dallas a few years.
Now I am in Houston, and while we have our own set of quirks here, the "yuppiness" of Dallas always amazed me! Everyone I knew who lived there overextended themselves for the sake of appearances.
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Ilsa Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 10:35 PM
Response to Reply #43
62. Very true. I live there 13 years ago and it was the same:
all about keeping up with the joneses, even if you can't afford anything other than sheets to drape your front windows.
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Lone_Star_Dem Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 01:21 PM
Response to Reply #19
54. I feel you're right on the mark
I saw a lot of that insane level of materialism in Dallas and I expected this type of harsh awakening.

The housing market in Texas has remained at or below market value for the most part. We won't be a factor in the bubble effect.
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MoseyWalker Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 11:47 AM
Response to Original message
20. I am so thankful that I'm not making rent or mortgage payments
anymore. I don't know how people do it. I live in the middle of nothingness, which means rents and buying a house are cheap - and I mean unbelieveable cheap -, but jobs pay next to nothing as well (assuming one can find a job). I'm glad I have ended up where I did. Paying a small fortune for rent of a 600 sq ft apartment in the middle of a city is no longer my dream. Think I'll just try to be happy here in Nowhereville.
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jerry611 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 12:02 PM
Response to Original message
21. I have a friend that is a mortgage officer....
He says that foreclosures are up for one reason and one reason alone...

PEOPLE BOUGHT MORE THAN THEY CAN AFFORD!!!

What happened was that you had very low interest rates for adjustable mortgages 3-5 years ago. Those mortgages are now up for refinancing. And many are finding out that the increase in rates has increased their monthly payments by several hundred dollars. Many people can't afford the closing costs or the mouthly payments of the refinanced mortgage. So the mortgage ends up in foreclosure.

Now to make matters worse, the property values went up so high and so fast that some people took out home equity loans. So they are paying a 2nd mortgage on top of the 1st mortgage that is going to increase in payments. This would be too much of a blow to some family's budgets, and they are forced to sell the house.

And don't get me started about credit card debt...that right there is personal responsibility and has nothing to do with the government. If you go out and rack up $10,000 on crap you don't need and now can't afford the payments, you have only yourself to blame for that debt.
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union_maid Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-20-06 12:31 PM
Response to Reply #21
23. True...but...
If relocation isn't possible, and for a variety of reasons sometimes it isn't, sometimes overextending yourself is the only way to live. I'm not a victim of the bubble and neither are my adult children, but only because there was room in our house for them. Otherwise, due to a joint custody order, they'd have had to continue to rent or to buy in a market that was inflated both for buyers and renters. Close to 2k a month for a rental that'll just barely fit a small family. And it all went up so fast, people didn't have much time to adjust their lives for the new reality.

As to credit cards, that varies as well. I know plenty of people who have cruises and other expensive non-necessities on theirs. You know what's on our? Medical costs - co-pays - that are in excess of our ability to pay. Other ways to get into credit card debt without frivolous spending is by not being able to afford car repairs and having no way to get to work without a car. Gas and home energy prices are taking a toll on people who did not have a lot of excess income, as well. Sometimes it's personal responsibility. Sometimes it's circumstances.
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marions ghost Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 06:53 AM
Response to Reply #23
37. So true union_maid
"Sometimes it's personal responsibility. Sometimes it's circumstances." You said it!
----------------------

People who are righteous about this have never been in a financial fix when they were working as hard as they could and not 'overextending,' but still having trouble making ends meet. This is happening to a lot of people. And the rest of us who are doing OK and living within our bounds are only one personal catastrophe away from the same situation.

It's so pompous to boil it all down to "personal responsibility" implying that people are all greedy suckers. This is the fat-cat Republican attitude toward the economic pains they inflict on others.

How about the "responsible" changes in banking laws that allow loans structured so that you only pay interest and never pay down your principle--marketed as "new freedom" loans? :mad:
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sbj405 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 06:17 AM
Response to Reply #21
32. Not to mention interest only loans.
A lot of people took those thinking they'd refi or sell the house in 3-5 years. Well now it's not looking so good.
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sendero Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 06:23 AM
Response to Reply #21
34. I'm sure your friend is a good person..
... but here in Dallas the big mortgage companies were pushing ARMs 2-3 years ago like they were the best thing since sliced bread. At the time, with mortgage rates at historic lows, there were very, very few situations where getting an ARM made financial sense, yet many were being taken out.

The same mortgage company that was pushing ARMs in their radio commercials has recently switched to selling the idea of getting you out of that nasty ARM and into a fixed rate mortgage. Fact is, the folks selling these mortgages KNEW DAMN WELL how bad an idea they were. There's some bad karma coming :(
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The Cleaner Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 09:08 AM
Response to Reply #34
39. Precisely!
I wonder also when we're going to see the final death of those damn "Get Rich Quick in Real Estate" infomercials.

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Jo March Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 11:24 AM
Response to Reply #34
45. An ARM was pushed on me
I didn't take it. I asked, "What if the interest rates skyrocket?" The uncomfortable seconds that followed (and my own common sense)convinced me that an ARM was NOT the way to go.
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WI_DEM Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 01:16 PM
Response to Original message
53. A recession in time for the '08 presidential election?
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OnionPatch Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 09:39 PM
Response to Original message
58. I noticed today so many homes for sale
that said "price reduced." I figured that can't be a good sign.
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scarface2004 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 10:37 PM
Response to Reply #58
63. i work for a homebuilder in nw houston
we have 30 custom under construction since beginning of year, less than 10 of those are in contract. it reminds me of the auto industry. here they are building thousands of new homes everywhere, so we definitely are in a new home glut, very dependent on some serious in migration from around the u.s. please move here and help us out.
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ChiciB1 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-21-06 10:21 PM
Response to Original message
61. I'm Getting No Bites On 5-Acres Prime Here In Florida!
This is the real thing folks. This time last year a friends sold here property in 4 hours! We put our 5 acres on the market last January... lots of calls in the beginning... now NOTHING!

And just got my AdValorem tax notice... without changes taxes on property to go up by at least $600.00, they RAISED the value of the land a GREAT deal. If tax changes are made the taxes will go up $1,450.00 more than we paid last year. And last year's taxes went up from the previous year by $2,900.00! So in just 2 years they valued the land at almost our asking price... which I'm now told we should ask less because prices are falling. Generally you aren't taxed on actual value, but at this rate we are going to be taxed on the 5 acres higher than our asking price.

We are holding out for now. The land is paid for, but these taxes are outrageous so we just decided to sell. Our home taxes have gone way up too, but we aren't planning on selling this place. So I ask you, how does a person deal with prices going way up, getting taxed on THAT price and then see prices go down, but taxes don't? It's not really fair.

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