The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: TobagoJack who wrote (463)	8/28/2001 10:03:17 PM
From: Tradelite	Read Replies (1) of 306849

Jay.. you said I haven't met many people with negative equity "yet".... The prime period for meeting people with negative equity was during the early to mid-1990s. Yes, I met an unfortunate few and helped them one way or another to sell their homes. None of them went to the poor-house because of it....they were transient in their jobs and were short-term home owners, usually had owned real estate in other locations and had made plenty of money on those properties....any loss they suffered on the sale of their current home by having to sell at the down end of a cycle was measured against what they had made on previous homes. Have also worked with countless first-time homebuyers, but never helped one of them take possession of a home in a negative equity position. Down payments are a good thing, and most people I have met have had adequate down payments and therefore immediate equity in the homes they bought...they were children of boomers and had great jobs, sometimes had large amounts of financial help from parents, and usually bought homes with a down payment of anywhere from 5 percent to 30 percent. Still wondering where all of these so-far fictional people with negative equity in their homes are going to materialize? Probably not in my area. Hong Kong is a little far away for me to identify with. One other thought for those expecting a major "crash" like the early 1990s....that period was preceded by extreme real estate market speculation, both in residential and commercial properties. Over-building was rampant. Builders today aren't over-building---how many "spec" homes do you see builders offering in the market today?....in fact they can't find enough labor to complete the homes they already have under contract without delays.

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