Five Ways to Survive the Housing Slump

"I know who the NAR is, very reputable actually."
You're so hilarious, you must work for the NAR, the organization that claimed there was no housing bubble and that home prices would continue to increase 20% a year for the next 15 years.

average incomes have been falling in the U.S

agreed!

Prices to income was 2 to 3x in 1997 ... as was the case in prior health periods.
now its nearly 10x. Has income gone up that much over 10 yeas now. No! Fact
is in California incomes have been down adjusted for inflation.

Prices need to adjust so that the median priced home can be a afforded by the median household income of an area. That is just basic economics.
False incomes (stated incomes) and false interest rates (1%) created false prices that must now adjust to real income and real interest rates.
A household earning $68,000 must settle for a 375,000 house if they put down 5% and are able to get a 6.25% interest rate.
In California, as banks feel the pressure of their REO inventory growing, they will have to sell to a population who has a median household income of between $56000-$75000. That means that the median house price needs to come down to about $360,000- $400,000 given todays rates. If rates should go up, before foreclosures peak (they have not) those median prices wil have to be even lower.

In the last two years of this crazy run, everybody and their mother became a "real estate investor" loose lending guidelines made this possible. Borrowers could lie about their income and 1% neg am loans made it possible for a minimum wage earner to buy a house on a false income and false interest rate that could not be sustained.

Drop by tens of thousands? I wish! I got relocated to AZ in 2005 and paid $806,000 for our home. Now it is worth about $590,000. Thank god we have a 30 fixed rate 80% loan. Some of our neighbors that have to relocate are getting killed. They can't come close to selling there homes for what they owe. But there are some good things about a down market we just picked up a house on Maui that there is no way I would have bought 2 years ago. Good luck to all of you having to sell.























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Drop by tens of thousands? How about hundred of thousands. I got relocated to Az two and a half years ago. I bought my house in 2005 and it was worth $806,000. Thank god I have a 30 year fixed rate 80% loan because now my house is only worth about $590,000. Some of my neighbors are in big trouble because the have to relocate and can't even come close to selling there house for what they owe. Glad I'm not going anywere for a while. There are 12 forclosures out of 94 homes in my sub-division.

As a Realtor, I want to let you know that they teach and tell us that the loan isnt our responsibility to explain to the buyer! Its Buyer Beware! I on the otherhand make it a point to know my clients financing before I have them sign a contract, because I dont want them to loose the house in 6 months or a year. I have actually lost clients because I have refused to write offers for them because of their loans. Yes I did loans for a while and have over 20+ years in Accounting and Finance as my background. I know what will work on certain budgets and what wont! If I wouldn't put my own family in that loan why would I do that to your family??? I take my Rule of Ethics very seriously! There have been many people go into the finance and real estate market over the last 5 years for a fast buck. They are now gone because the easy money inst there. Know who your working with and understand your loan, if your lender cant explain something clearly....then think about a second opionion!! You would if it were a medical decision....anything financial should be considered just as important.
I truly care if my families can afford a home. While many have gone to someone else to buy a home, and are now in trouble....I know it wasnt because of me trying to make a fast commission. What is sad that they call me to help them, and for many I cant other then suggest a short sale or bankruptcy!
CAR and NAR have a lot of political input to the Goverment and Fed Reserve...but hey dont always listen to us anymore then some of our clients have. We DO NOT control the rules of real estate, the government does! Thankfully new laws are being put in place, a bit too late however, but they will make sure that anyone that sells you a loan is licensed by the DRE of your local state. That wasnt the case in the past.
Know who your working with, and like a doctors prognosis...get a second opinion anytime you think something is just too good to be true, or just too easy!!
Always check your states DRE website for licensees to see if the person your working with is licensed...if they are not....run, dont walk out of their office!! Oh Yea, and take all your personal information with you!

I disagree with your comment because the ultimate responsibility falls with the individual buying the property and not with the Real Estate agents nor the banks. Only adults are allowed to buy houses without the consent of a parent or legal guardian, therefore it is assumed they would know what to do. I have bought 4 properties in the past 7 years, three of them as investments, the lowest being priced at under $200K and the highest at almost $750K, and I never had any problem(s) with the bank or the financing. My wife and I are teachers, so we don't make lots of money, but we manage our money carefully and we educate ourselves in matters of purchasing Real Estate and the different financing opportunities available. I could never and would never blame someone else for my own ignorance. What right would I have for doing that? The problem with a lot of people who are now in trouble is that they didn't do their homework before jumping in the deep end, and they are drowning because they found out it was very tiring to swim against the current. It's a sad situation, but the only people to blame are the buyers who went above their heads purchasing properties they could not pay. It's a lesson learned.