So is the housing market going to crash in the US?

mikey ortega

Being new to this game, I am a little concerned over all of the housing "bubble burst" talk. I guess we didn't have all of these adjustable loans back in the late 80's when the market crashed, but appartently people don't learn from prior mistakes.
Another friend told me that the secondary market, which we didn't have in the 80's will not allow for a crash.
I am still trying to figure out all of the different programs that I can offer, let alone if my family and I will have to move out of our house soon.
Someone help...thanks!

dsickler · Posted: Wed Nov 09, 2005 7:55 am Post subject:

The following is is a link to one of the most informative and accurate assesments of the housing bubble theory that I have read in some time.

http://realtytimes.com/rtcpages/20051026_bubbles.htm

Personally, I think some areas will be supseptiple to a bubble due to high inventory, and low demand, and because of higher rates, higher prices, stagnet incomes. But most importantly, speculative buying, where people are buying because they are expecting growth in the city that really may or may not grow as much as they expect it to.

Example: San Bernadiino
People are buying houses out there because they have heard of plans for a new railroad to be built for transportation from San Bernadino to LA. So people buy and prices rise. But what if the railroad is not built, now many people bought homes that they though would have a higher value because of the railroad, only to find out it's now worth less then they expected.

However, as you will see in the article, the truth is, the demand for housing will always be there. I know people who are buying $1 Million homes like nothing. And if the housing market falls in some areas, they willl most likely take on the opportunity of buying low, so that when the market goes back up and balances, they can flip the properties once again.

My interpretation: the market is like a person walking up the stair with a yo-yo. along the way, the yo-yo will have it's ups and down, but in the long run, it's a contant upward motion. And I don't see a national burst any time soon. Maybe just a slow down, but no burst like everyone is expecting. There is to much demand, even in a soft market to let values fall much, if at all.

David.

chow · Posted: Tue Nov 15, 2005 3:43 pm Post subject:

I see my market going into a bubble, long before a coastal market-BUT I did have a long conversation with my old boss yesterday.

(he moved to FL???) No one down there is having a problem with 12% rates, and he's selling them on first mortgages-right now!

I started in this business when a first mortgage for a sub prime borrower was 12%, and FHA was well over 9%. People will buy homes, they will invest, they will ride the market, and refi when rates go down again.

We just have to work like dogs some days. If your customer's think this is bad, ask them if they know anyone who did mortgages in the 80's.

Jimmy Carter was a good president, but.....18%??? Try getting into the finance world in that era!