At a National Economists Club luncheon in Washington Thursday, IMF economist Prakash Loungani...

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MarketGuy Comments (3983)
 
yep. been saying that for some time.
28 May 2010, 12:28 PM Reply Like

Mad_Max_A_Million Comments (1173)
 
Not quite so sure, MarketGuy - We are seeing that the people fleeing home ownership and going into apartments are getting fed up with car break-ins and close-quarter living and they are starting to go back into the home rental market - i.e. the banks (and what is left of the speculators) are getting pickier about who they are renting to in the deep south. So the rental prices just might stabilize again, keeping the shadow market just a bit more stable than it otherwise might be.
With dropping mortgage rates, you might jump back in. But avoid the Mc Mansions. Why? The middle class is being "Re-distributed" to the have-nots. They may "no longer" qualify for that California style mansion.
28 May 2010, 01:02 PM Reply Like

MarketGuy Comments (3983)
 
agree with the McMansion thesis. However, choices in life for the middle class are going to get worse as we hit the new wave of mortgage resets in the coming two years.
28 May 2010, 01:07 PM Reply Like

GreenRiver Comments (3829)
 
I'm not in the Deep south, but in Charlotte NC we didn't see a very big run-up in prices in the Bubble, nor much of a decrease in the bust. But prices are declining here and appear to be gathering steam. This has a lot to do with the banking industry - once a driver of development; but no job growth now.

Banks have essentially 4 choices in how do deal with a failed mortgage:

1: Take no action, let the mortgage holder "squat" in the house and make no payments. This usually ends with the squatter stripping the house and selling everything from light fixtures to the wiring for scrap.

2: Forclose, and let the house stand empty. It doesn't take long for squatters or vandals to find these properties.

3: Foreclose, and rent the property. Renters don't take very good care of the property and the don't help property values.

4: Foreclose, and sell at a loss.

Banks are realizing that #4 is the best option and it's driving down prices fast.
28 May 2010, 01:28 PM Reply Like