MikeHr

5 Comments

    • The WSJ Is Wrong on the Housing Crisis [view article]
      One thing that no one mentioned is the still high cost of home ownership. The housing mania was fueled by zero down, stated income loans that pushed prices up to unrealistic levels. It was the greater fool theory at work. I'll buy this home for this absurd price because in a year I'll sell it to some other fool and make a pile of money. Some people did make a lot of money. Now some people are losing a lot of money. A debt pyramid can only go so high before it collapses. This is what we are experiencing now. With the mortgage market going back to traditional requirements (20% down and documented income and assets), the dynamics have changed. The debt engine that drove prices to unrealistic levels is gone. Do the math. A $1 million home, common in the SF Bay Area, now requires a $200,000 down payment and monthly payments of $4,860, plus property taxes of approximately $1,100 per month, plus insurance, plus utilities and other expenses. May 08 09:53 AM
    • How Will the Housing Crisis End? [view article]
      You made the comment, "Essentially, this crisis is occurring due to a substantial increase in the supply of houses through subprime foreclosures, and a decrease in demand to buy houses through harder to get mortgages." I would counter that by saying that prices were pushed to insanely un-affordable levels because of bad loan practices. Here in California, homes worth $150,000 to $250,000 were pushed up to $500,000. These are small 900 to 1200 square foot homes that were built 50+ years ago. Most would be better off being torn down and turned into housing more suited to today's world. Now those homes are plummeting in value from their previously inflated value. It will take time before they reach their real value, meaning we still have a ways to go on the downside, Mar 26 08:15 PM
    • Yun Says Housing Will Be Merely Flat Next Year? Whew! [view article]
      Thanks Trader Mark. I'm a realtor in Danville, California. This market was once booming, but is now much subdued as many real estate markets are in California. Naturally, people still need to move for job and family reasons. And there still is that upward climbing segment looking to move into a trophy home. The reality is that much of the real estate boom was not based on higher income, exploding population or just a hankering for a great new home. It was based on interest rates that went down to the ground and financing packages that let people move into a home based on just paying the teaser interest rate. The promise was that home prices would continue to climb. The only reason they were climbing was because of cheap credit and no money down. As you all know, that is why the real estate market is in decline now. Buyers actually have to have down payment money. Nov 16 12:13 AM
    • CEOs in Subprime Said 'Apres Moi le Deluge' [view article]
      Larry, you got it right. It seems these CEOs are more concerned with getting their own than running the business. This has been going on for decades--except now the numbers are huge. Take Nardelli. Run Home Depot into the ground, then leave with a monstrous bonus. Will he do the same for Chrysler? Nov 14 05:46 PM
    • CEOs in Subprime Said 'Apres Moi le Deluge' [view article]
      Larry, you got it right. It seems these CEOs are more concerned with getting their own than running the business. This has been going on for decades--except now the numbers are huge. Take Nardelli. Run Home Depot into the ground, then leave with a monstrous bonus. Will he do the same for Chrysler? Nov 14 05:46 PM
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