It’s never paid to bet against America
Warren Buffett was interviewed on Dateline NBC last night and described the current state of the economy as an "economic Pearl Harbor" that is not as bad as the Great Depression or World War II, but still is very significant. The Oracle of Omaha said that fear is permeating the American psyche, "which leads to people not wanting to spend and not wanting to make investments, and that leads to more fear. We'll break out of it. It takes time." Buffett didn't wish to guess when the crisis would end, but he did leave with one piece of powerful advice: "It's never paid to bet against America…We come through things, but it's not always a smooth ride." San Diego real estateSan Diego Homeowners with Underwater Loans
People might have got into these loans without thinking too hard but I guarantee you that they won't leave as foolishly. You don't need to be Robert Shiller to understand that your housing equity is not coming back any time soon and that rents are becoming ever more affordable.
Besides… who needs a credit score in the next 4 years anyway? Many people approaching 800 on their FICO are still being denied new credit card offers and have no desire to purchase any real estate until the dust settles.
Many strongly believe that underwater homeowners should walk away en masse unless their true desire is to stay put for the next 15 to 20 years. Rip the band-aid off!!! San Diego Realtor
San Diego Home Negative Equity
“However, most subprime borrowers are already financially stretched even without higher monthly payments. This financial overburdening may mean that the continuing falls in house prices prompts borrowers to wonder whether the sacrifices of paying towards a depreciating investment is economically sensible. Given that it is almost certainly cheaper to rent an equivalent property and that subprime borrowers are unlikely to be losing much in the way of credit score from a default, it is increasingly difficult to see how ‘transaction costs’ can provide much of an argument against defaulting.”
As a result we believe negative equity is playing a progressively more important roll in determining whether borrowers are defaulting.
Other related blog posts:
Negative equity casualties – Las Vegas Sun – Adjustable rate mortgages and investors counting on appreciation fueled Nevada’s rise to its spot as the foreclosure capital of the country the past two years. By the time the final 2008 statistics are calculated, …
Negative equity increasing in Grand Junction housing market – 1/1 … – Negative equity increasing in Grand Junction housing market By Anna Maria Basquez – GJ Sentinel – Thursday, January 01, 2009 The number of homes in Grand.
Research Recap » Blog Archive » What Lies Behind Higher US … – Author Luci Ellis of the Reserve bank of Australia writes that the relationships between the characteristics of mortgages and the incidence of negative equity in a housing bust help explain why US households have fallen …
Californians Pack Their Bags for Other States
According to census estimates the number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period — more than any other state.
Not to worry; California will not be empty any time soon. Actually, California continues to increase in overall population because of births and immigration, legal and illegal. It is the fourth consecutive year that more residents have left from California for other states than arrived in California from within the United States.
Why are are they moving?
#1. California's unemployment rate hit 8.4 percent in November, the third-highest in the nation, and it is expected to get worse.
#2. A record number of home foreclosures.
#3. Personal income was flat last year.
#4. A $41.6 billion budget hole over 18 months, have residents bracing for higher taxes, cuts in education and postponed tax rebates.
#5. Office vacancy rates in San Diego and San Jose surpass the 10.2 percent national average.
#6. Median housing prices have nose-dived one-third from a 2006 peak, but many homes are still out of reach for middle-class families. San Diego real estate agents
Real Esate Outlook 2009 … Economist Gary Shilling
The San Diego real estate market turn-around in 2009 seems to be the usual New Year rose-colored glasses media 'talking head' consensus.
The already crumbling housing market could plummet an additional 20%, says Gary Shilling, president of A. Gary Shilling & Co.
San Diego housing is already down over 30%, but according to Shilling, there's no near-term bottom in sight.
Excess inventory – nearly a year's worth supply – is the "mortal enemy" of any recovery in housing, says Shilling, who does not believe the Fed's efforts to lower mortgage rates will resolve the crisis.
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San Diego real estate – 2009 the Option ARM resets
Many local mortgage lenders feel that San Diego & Southern California were the prime locations for the adjustable Option ARM loans. Now, just when many believed the mortgage crisis was winding down, San Diego real estate will be facing another major obsticle.
Our first post on this problem was San Diego Real Estate … The Coming Next Wave of Foreclosures, published on 7-17-08. It took a little while, but now the major media outlets have picked up on this problem. San Diego Realtors
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