What has caused the housing market to decline? and what effect has it had on the ecomomy?
Foreclosures? Bankrupt? Can you give me your opionion?
Well, I have a story to illustrate my point:
I’m an ebay powerseller in Los Angeles and often do cosignments. I went to a house today in the Imperial Valley, an area with some of the highest foreclosure rates in the country, to liquidize some assets. The owner was bankrupt real estate agency owner. The vestiges of his former consumption were all around me and I was the one who would have to put them for sale. He bought his house 2 years ago for $1.8 million and he put in another $200,000 for a patio and a volleybowl court. The bank will probably get around $800,000 for it.
The eeriest thing was the yard and patio. He had begun work on the yard and the patio was almost finished, but you could tell work had seized suddenly when the market plunged. There were a few left-over pallets of brick (expensive, made to look like vintage re-used 19th century bricks he had had sent from Virginia. And he was trying to sell them back to the brickyard for anything he could get for them.
So, what did this guy wanted me put for sale:
– Two SUV’s (one Land Rover and one around 50k each).
– Two sports cars (Mazda’s)
– 3 ATV’s (q Yamaha Rhino, 2 Predator’s)
– 2 dirt bikes.
– 2 Toy Haulers for the ATV’s and Dirt Bikes.
– A 22′ yacht.
– A 4K-5K Marine GPS/Radar system for the yacht that never got to be installed.
– A Mac Pro Computer, a heavy-duty computing system often used by film companies and the like to make movies worth around 5K. Nobody in their right mind would buy this as a home computer.
– A 8K finely crafted bar with granite insets… which was in a bare-floor and walls garage with a Fooze-ball, Air Hockey and Pool Tables.
– A tractor. Yes, like the kind you would find in a farm. This guy paid 22K for a tractor and attachments to help him clear a backyard half the size of a football field.
– Dozens of other knick knacks.
I couldn’t list half of this stuff because he owed more on it than it would sell for. He also had an 40′ RV, which is going to be his new home now.
To answer your question,
They were all responsible: Banks, Agents, Homeowners. They were greedy and thought that the market would go up forever. And it blew up in their faces big time. Banks that lend heavily in high-risk loans are dwingdling near bankrupcy, Real Estate agents are unemployed and Homeowners are in foreclosure. And I’m not the least bit sad about it.
The banks are the problem, they shouldn’t be lending money to people that are going to fault on payments. They are raising the rates to such a high amount that people can’t make payment. This has had a huge effect on our economy because of the amount of foreclosures!
References :
If you look at the statistics it is the mortgage market that is in crisis. The market was molded with incentives a couple of years ago that allowed people to buy houses they couldn’t afford. Therefore, the unsophisticated buyer would take on a mortgage that they did not fully understand the terms of. Now, their payments are "adjusting" and they can’t pay the payments. The home is now going into foreclosure or on the market to sell. When you have that many homes on the market, it becomes saturated and a "buyer’s market" which in turn drives the Fair Market Value down.
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GREEDY AGENTS AND BROKERS pushed programs to people they knew couldn’t afford the homes.
References :
Well, I have a story to illustrate my point:
I’m an ebay powerseller in Los Angeles and often do cosignments. I went to a house today in the Imperial Valley, an area with some of the highest foreclosure rates in the country, to liquidize some assets. The owner was bankrupt real estate agency owner. The vestiges of his former consumption were all around me and I was the one who would have to put them for sale. He bought his house 2 years ago for $1.8 million and he put in another $200,000 for a patio and a volleybowl court. The bank will probably get around $800,000 for it.
The eeriest thing was the yard and patio. He had begun work on the yard and the patio was almost finished, but you could tell work had seized suddenly when the market plunged. There were a few left-over pallets of brick (expensive, made to look like vintage re-used 19th century bricks he had had sent from Virginia. And he was trying to sell them back to the brickyard for anything he could get for them.
So, what did this guy wanted me put for sale:
– Two SUV’s (one Land Rover and one around 50k each).
– Two sports cars (Mazda’s)
– 3 ATV’s (q Yamaha Rhino, 2 Predator’s)
– 2 dirt bikes.
– 2 Toy Haulers for the ATV’s and Dirt Bikes.
– A 22′ yacht.
– A 4K-5K Marine GPS/Radar system for the yacht that never got to be installed.
– A Mac Pro Computer, a heavy-duty computing system often used by film companies and the like to make movies worth around 5K. Nobody in their right mind would buy this as a home computer.
– A 8K finely crafted bar with granite insets… which was in a bare-floor and walls garage with a Fooze-ball, Air Hockey and Pool Tables.
– A tractor. Yes, like the kind you would find in a farm. This guy paid 22K for a tractor and attachments to help him clear a backyard half the size of a football field.
– Dozens of other knick knacks.
I couldn’t list half of this stuff because he owed more on it than it would sell for. He also had an 40′ RV, which is going to be his new home now.
To answer your question,
They were all responsible: Banks, Agents, Homeowners. They were greedy and thought that the market would go up forever. And it blew up in their faces big time. Banks that lend heavily in high-risk loans are dwingdling near bankrupcy, Real Estate agents are unemployed and Homeowners are in foreclosure. And I’m not the least bit sad about it.
References :