Not a typo
More than 30 percent of U.S. homeowners who bought in the last two years owe more on their mortgage than their house is currently worth, a housing market research company said on Tuesday.
The housing market peaked in most U.S. markets in the last two years. Of home buyers in 2006, 39 percent of those with a median 10 percent down payment now have negative home equity similar to 30 percent of those who purchased in 2007, said online company Zillow in its quarterly home value report.
I guess that explains why the National Association of Realtors was on my TV last night claiming that "on average, home prices double every ten years."
Labels: economy
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3 Comments:
It's unfortunate that NAR continues to run this campaign. Whether it's a good time to buy is a very personal decision, depending on the buyers' financial stability, income, debts, where they are in life, and where they live in the country. The Triangle has most certainly not experienced this type of appreciation (doubling values) in most segments of the market. At the end of the day, the preferred way of buying a home is to make a the largest downpayment you can afford; work to achieve the best credit rating possible before buying; and understand that the longer you stay in the home the better you will weather fluctuations in the market.
By
Tamara Heyward, at 7:18 PM
Tamara - thanks for your thoughts. As one who got caught in a previous wave of California real estate bubbledom (1991 - 1993) and lost a house, i understand exactly what you're saying.
On the other hand, the Realtor™ ad i saw had copy which made me think it had been written specifically to address the falling prices issue, even though the "doubling every ten years" theme has been around since at least last summer.
By
Barry, at 9:59 AM
Maybe NAR should start promoting the sale of tulip bulbs?
But I'm trying to get my arms around several items related to the "housing bubble" burst or, as put by some financial pundits with no sense of irony, the "housing value re-adjustment".
1. Loans were made to unqualified borrowers.
2. Loans were made on homes outrageously priced above what some of these borrowers could afford––IF they were qualified.
3. Some of the borrowers appeared to have thrown all reason out the window and opted for ARM or adjusted rate mortgages. If you have a limited budget, don't you want a locked rate? Did they have no idea that the ARM could rise above their means?
4. These bad loans were approved by institutions that should have known better, then sold to other financial institutions in some arcane speculation market(s). I mean, what the hell?
5. This all happened when the rule of law was arrogantly put on "hold" by the Bush Admin. A lying sack o' shit Attorney General like Gonzales stonewalls simple questions in Congress, well that's just a green flag to do what ever the hell you please.
6. Was the government asleep or simply paid off to ignore what was going on?
Now did Realtors™ knowingly prod people into bad deals just to make their quarter sales goals? This is just plain business. As an industry they have basically given us a home market as healthy as the one in 1932, the height of the Great Depression. And you know what happened that year.
What really cheeses me off is that, in some way that is completely outside of my control, I will pay for this mess. In higher taxes, more fees and an "adjusted value" home.
F**k capitalism.
By
Tony, at 7:08 PM
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