Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (28970)	3/31/2005 4:17:59 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 306849

Did the Japanese have access to cash out refi's prior to the bust? Maybe they continued to pay because they had more to lose.....I suppose we'll find out one way or the other.

To: GraceZ who wrote (28970)	3/31/2005 4:19:43 PM
From: mishedlo	Read Replies (3) \| Respond to of 306849

Yes, we do. Houses fell seriously in price off their peak and people continued to live in their houses and pay down their mortgages. I think most here will be surprised at how many here will do the same thing when the price of their house declines. I think there will be an enormous spike in foreclosures. But spike from where to where? Even if the foreclosure rate triples or quadruples (not a bad bet) the vast majority of the people can and will live in their houses and pay down their mortgages. But what about investment property? People owning 2-3 or more houses, or worse yet condos (firsts down and last up - at least I think). I am not sure if you are trying to make trivial the consequences of this bust or if you even think a big bust is coming. Perhaps you do, but think I am overstating the consequences. Mish

To: GraceZ who wrote (28970)	3/31/2005 4:56:09 PM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 306849

Grace, I don't understand your point. If your argument is that most people will continue to live in their houses, then I think the whole board is in agreement. If your point is that you are with the consensus of California homebuyers that prices should increase 20% per year over the next 10 years, then you are in disagreement. There is a difference between owning a home and being a slave to your mortgage. Mathematically, the latter should not happen if somebody makes more and saves more than his neighbor. If that happens, then the home no longer becomes a place to live, but rather, an investment. And as such, any investment that goes up too much can go down equally so particularly when its price is a function of liquidity. Plenty of people live in houses all over the world. Nobody is predicting Darfur here.

To: GraceZ who wrote (28970)	4/4/2005 11:01:20 AM
From: Tradelite	Read Replies (2) \| Respond to of 306849

"We" certainly do know what happened in Japan and here in the U.S. <<Houses fell seriously in price off their peak and people continued to live in their houses and pay down their mortgages. I think most here will be surprised at how many here will do the same thing when the price of their house declines.....>> You're right, Grace. I've seen my house fall in value a couple of times while owning it. Still own it and still live in it. Couldn't care less what happens to its value as long as I need to live in it. Seen the same thing happen with my 15-year-old automobile. Price declined for years, to the point where I found it cost-effective to cancel the collision insurance. All of a sudden, I seem to own a "classic" automobile which would command more money in the open market than the amount estimated by my dealership's body shop to fix the ugly dent in the side of the car imposed by a crazy driver a week ago. Real estate is a long-term investment. Certain cars might qualify for that status, as well. I'm keeping the car and expecting to collect the insurance to get the dent fixed. <<gg>> (Also keeping my house for the time being.)