Not in this market. I think the housing market is tanking. I’m going to turn this into a bigger post later where I give you my own experience but in the mean time, go read this blog. It will be an eye opener. I’ve been reading it since last September when I put my house on the market. I now rent.
In a nutshell the blog attributes the HB to four factors:
1: Loosening of lending standards
2: Speculation
3: Rampant HELOC withdrawals
4: The high percentage of interest only ARMs used by buyers.
People used I/O ARMs because that was the way to afford a home and they were afraid to be priced out forever. Now interest rates are rising and ARMs are resetting. Property prices are declining in value which limits a homeowner’s ability to refinance to a fixed product unless they can bring money to the closing table. The fear is that people who couldn’t afford the housing payment at fixed rates in the first place are going to be in a lot of trouble.
A good friend of mine is a realtor who sold my house for me. His anecdotal evidence is scary for the D.C. area. In the last two years he was selling 800k homes to people with 60k income with bank approved loans.
Check out that blog. You’ll be surprised to see how wide and far this thing has spread.
My advice? Don’t buy unless you are sure you are going to live in that place for 10 years. That for what it is worth.
CSG
1 Comment
September 20, 2006 at 9:28 pm
[...] In my earlier housing bubble post I mentioned I’d tell my story about housing and why I came to believe there is a huge housing bubble in the U.S. [...]
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