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

To: John Vosilla who wrote (111162)	3/18/2008 1:05:17 AM
From: neolib	Read Replies (2) \| Respond to of 306849

I bought my first real estate in 1991 with seller financing at 9%. I had 20% down and a 10 year lone. That is why I claim the current RE market is functioning just fine. Look at all the flapping about how loans are hard to get these days. Jeeze, for 9% interest there is still good availability. The number of homes sold each month is still fine, there are still buyers, just somewhat less than the long term average, while a few years ago, it was above the long term average. Nothing is seized up there. What is new is the magnitude of the MBS market blowing up. But that was a mess we created. There is zero reason why mortgage contracts can't be written in simple enough terms that you scare off people who should not be taking them out. Our system was not constructed to make sure good deals were done. It was constructed to do the most deals, since that is what made the most money. The global stage however is an issue this time. In the 1990's the RE slump in CA was largely military spending related, but the country was at least emerging from the Japan Inc complex, and tech was finally advancing to the point were it was clearly transforming our lives much more so than in the 1980's. The US tech titans hit their stride in the 1990's and the US future looked great as the decade ended with Federal budgets even starting to look good, and ole Greenspan wringing his hands about the approaching doom of no Fed debt as an investment vehicle LOL! Now things don't look so optimistic. The WOT and its methods have divided much of the USA internally, as well as somewhat isolated us from much of the rest of the world. Fed spending is a major ouch, and the big driver of our last 5 years of economic performance (RE bubble) is imploding. China Inc is making Japan Inc look anemic. We are also 15 years closer to the baby boomers retiring, and SS and Medicare have not been substantially improved. Coupled with the $ falling, yes, things look different this time.