Five Ways to Survive the Housing Slump

Although the Cheney/Bush administration has been touting tax cuts for the wealthy as the force behind the "healthy" economy, the hundres of billions in increased spending by consumers and the government from borrowed sources (China of course) appears to be the driving force behind the recent economic growth. The current crisis is remniscent of the 1981 Tax Recovery Act in which aggressive tax deductions for real estate, coupled with deregulation of the Savings and Loan industry, led to massive bailouts. In the current crisis, low interest rates and deregulation created a bubble in housing prices that could not be sustained. The major problem in both crisis has been a total disregard for any reasonable regulations. The current crisis will not be over in a matter of months - more likely 2 to 4 years or more before we get back to a healthy real estate lmarket, based on experience with the last bailout. What we need is a balanced aproach to regulations. We need reasonable protection for the consumer that does not unreasonably stifle our business community. It is not an easy balance to achieve, but setting the fox loose in the chicken house is definitely not the way to go. The one possible bright side is that the crisis may make more housing opportunities available for affordable housing for our veterans, senior citizens and working poor.

I think it's dumb to say "they'll return to 1997 levels" because that's not taking into account 10 years worth of NORMAL appreciation. What would home values likely have appreciated without the "aggressive lending practices"? Answer that and then you'll get a real value in TODAYs dollars. There are lots of people who bought with a 30 year fixed and some that did refinance their crazy loan or can afford the adjustments.

We just sold our home a few days ago, and had to drop our asking price $110,000 before we even got a serious hit. Ultimately we sold our home but at far far less than we had anticipated - even in this buyer's market. Is it as low as 10 years ago? I think not, such a statement is a bit extreme, but I can tell you when it was all said and done, we crawled out of the house with about $3,000 in our pocket. Thats it.

While we have had a lot of speculation in real estate and prices have been raised to unnatural levels, the population of the U.S. is growing. So eventually the market will balance. Once this happens demand will increase and prices will recover. Another actor is inflation which has not been a major factor so far. With oil at $100+ a barrell, and the dollar plumetting we will soon see inflation at a high level. Holding real assets is the key to beating inflation. If we get really bad inflation a so called overpriced home (a real asset) may become worth a lot more inflated dollars in the future

So if you need a home buy now the bargins are good. Use only low fixed rate financing. Speculators are all on the sidelines now.

By the way, they are not making any more land.

Housing Bear John Talbot? Who is he and why would you give him the slightest bit of press? Did you google "Real Estate Moron" to find him? He has no idea what is going to happen. If history has proven anything, it is that real estate will go up over time.

Real estatate was way over sold. It is no different than any asset group. There is a first time for everything and what goes up can and will come down. It will recover, but it will take years because you are only seeing the tip of the iceburg. Sub prime was one thing, but Alt A is coming home to roost along with all the A paper investment buyers who put next to nothing down on rental properties. There will be way to many rentals on the market and because of supply and demand, there will be rent competetion and rents will be reduced. Remember, when you are a landlord, you either have a tenant or you are the tenant, the mortgage must be paid or foreclosure is immenent. If you need $1,200.00 a month to break even, you will take $800.00 if you have to because that is better than nothing. Now you have a negative cash flow and you will be losing your rear end. More and more people are going to be trying to rent and the rental price competetion will be fierce. Real Estate had been way over hyped by a bunch of very greedy realtors, and loan originators. I think that Mr. Talbot is RIGHT ON, and we might as well get our heads out of our rear ends and start trying to figure out how to minimize our losses. Again, real estate is an asset group, just like stock, bonds, etc. and it CAN and it WILL go down. Don't loose your real end and make mistakes that could ruin you just because some greedy speculator sold you on a bunch of real estate BS! Good Luck to all!

Population growth, cost of construction increase, job market growth, rent income growth, and yes we will see prices come down, but to say that they will come down to 1997 levels is wrong. As long as we have investors that understand the real estate market, we will have support, and a fair ???price adjustment.??? I strongly believe that even with estimated 2 million foreclosures that will hit the market, many of them will be brought by investors, hence creating support for prices to adjust to fair-market value. Look for the Feds to adjust the interest rate to assist in the support of home prices, and we will come down softly. Thank You, REALNY.COM

1997 prices? Does Mr. Talbott think that potential homebuyers have time-traveled back to 1997? Once the government raises the conforming limit to $1,000,000 government guaranteed loans will get the mortgage industry back on track after the market corrects, buying and selling resumes, homebuilder stocks surge, bank stocks surge and doomsayers realize that the need for housing is as basic as it gets.

It's always amazes me that just because the "masses" in the more populated areas of the US are miserable and on the verge of bankruptcy because they aren't making a 20% per year gain on real estate investments, the entire US must be suffering the same fate. Wake up, there are other areas of the US where prices are holding fairly constant, even some small gains, but the media refuses to look outside the east coast and the west coast to find something positive for a change. Obviously, Mr. Talbott falls into this category....

Some houses were not even built in 1997 and it is ridiculous to say home prices will return to the 1997 level.
Housing problems in USA are not an internal issue any longer, but the subprime fallout and aftermath are just another sign of the global economy is undergoing a fundamental structural change with good and bad components. Telecom industry, for exmple, will face a sea change in another two years from now, giving a remarkable innovative benefit to businesses and consumers, while some smokestack industries will go down the drain. Emerging economies like India and China are sucking up construction supplies as well as energy, and home prices will perhaps triple in another 5 years.

People need to stop listening to the media for their information. It is not correct. I have been a mortgage professional for 24 years in California. This is a cycle and the deals are right now! I have seen a huge increase in recent weeks for purchases in my office and with rates at 30 plus year lows and great loans anyone with two cents to rub together should be buying. I am not talking about flipping or trying to make a quick buck but to purchase real estate as an investment to hold for at least a few years. It was flipping and wall street demand and bank greed as well as unlicensed mortgage and real estate imposters that took advantage of people and put them in crap loans. I know because I have been helping these poor folks get out of them. The industry needed a good shake out so us professionals can actually do our job and help our clients. theloanjeannie@yahoo

I wonder if owning a house is really an advantage. People think they make money by selling their house after a few years but they forget that they pay a huge amount of money in property taxes, and in the case of a condo add the assessment. Isn't it better to rent?

I disagree with John about remodeling doing additions or building a house right now. I what he like most people doinf the reporting are missing is the fact the interest rates are at historic lows and building materials and labor are way down right now. Infact i am hearing as much as a third lower on lumber and trusses and such. Now is the time to take advantage of this. We may not see these kind of bargans again. I have yet to see any one report one the whole scope of this situation. But seem to dell on the negitive. Wise up.

The Fed's recent highly inflationary policies have priced the U.S out of the global economy, esp the expensive coastal regions. Even more jobs will now shift overseas or be done by imported foreign labor. Look for job growth in the center of the country and watch the coasts turn into retirement communities... Why inflationary policies? Fed chairman Bernake believes it helps goverments pay off debts - that's right, the U.S. is bankrupt and won't raise taxes or cut spending, so the Fed has used inflation as a unvoted tax increase, which falls mainly on the young, but puts money into hands of retiring home owners, thus bailing out the social security system. But shifts staggering debt onto the young and future generations.

The Housing Slump.
You ain't seen nothin' yet.
B-B-B- Baby, you just ain't seen nothin' yet.
Here's something that you're never gonna forget. Bachman-Turner Overdrive