I really wish I’d taken my own advice a couple of years ago and tried to sell my place to instead rent for awhile. The bubble has burst, and it’s not pretty.
Stocks take a turn for the worse as investors scoff at the Fed’s decision to step in yet again, this time adding $3 bln in temporary reserves. At $35 bln (the sum of the first two repos), the Fed had already stepped in more aggressively than its actions following the 9/11 attacks to calm a nervous market.
Since a third injection is unprecedented, as such infusions typically only occur during a crisis, investors are again left wondering just how bad the subprime situation is and questioning whether or not an emergency rate cut would even be enough to avert a possible true credit crunch.
I’ve seen Jim Cramer go asplodey before, and mostly I just generally find him entertaining rather than taking his advice seriously at all, but he really went AWOL on CNBC about this same issue recently.
My assessors evaluation this year showed that my place has lost value, homes in the area are now selling for about 10-15% less than I paid four years ago, and many houses have gone to into foreclosure in this area. I’m still waiting to see what prices the homes that recently sold in a foreclosure auction went for wondering how much they will bring the value of my place down. I do somewhat regret buying a place when I was so young, but maybe it’s better in the long run to learn this lesson on a relatively inexpensive piece of property with a standard 30 year loan.
Me and the wife are buying out her ex, we closed on Thursday, July 26th. Because of the three day right of recession, we were not getting funded until the 31st. On the 30th, the mortgage company went bankrupt, due to the drop in value of the properties they held mortgages on. At least rates dropped in the meanwhile…
That’s crazy. Good luck finding another place to get your mortgage through. I wonder how much the minimum credit rating required to get a normal loan will change in the coming months, etc..
what neighborhood do you live in?
I live kind of out in the ghetto– basically hwy 36 and Federal. My zip code is Westminster, but Federal Heights is across the street, and Denver is just down the street.
This is one thing I wished I had been wrong about…I remember reading an article in The Economist in 2005, pretty much agreeing with it, and telling some co-workers about it. They more or less blew me off. I hoped it was wrong, as I just bought a house about a year before. I wrote it off as yet another example of someone dismissing something because it isn’t the usual fluffy-bunny fairy tale people usually like to tell each other…this is the article, BTW, but it’s not available unless you are a subscriber (I no longer am, my sub ran out):
http://www.economist.com/printedition/displayStory.cfm?Story_id=4079458
Now it looks like it’s coming about.
This same magazine also mentioned that housing has historically been a *terrible* investment – about 3% rate of return when you look at the long view, not just the anomaly of the past 20 or so years. That’s something that people will still argue with me about. I tell them it was the Economist saying this, not me, and anyway, it’s clear that the current rate of growth is unsustainable – the rate before the bubble popped, I mean. I think when people argue against this stuff, it’s just cognitive dissonance, which I can understand, I suppose, even if it is irrational. That number of 3% is also referenced here: http://money.cnn.com/galleries/2007/real_estate/0704/gallery.stocks_v_realestate.moneymag/index.html
Anyway, I think it’s not a bad idea to have something “real”, it’s just something that people shouldn’t have treated as a bottomless ATM machine with no future consequences…I just hope I can hang onto mine. Interestingly, WSJ recently had an article about people who crunched the numbers and decided that renting made more fiscal sense for them.
Now I just hope the Peak Oil stuff is wrong, too….ugh.