The plot sickens in California
source: http://www.reuters.com/article/businessNews/idUSN2637340220071026?feedType=RSS&feedName=busi...
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- jesseinsd
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California rode the real estate bubble up and now it's riding it back down. I live in San Diego and work in the real estate industry and I see the current meltdown as the result of a perfect storm of speculative investment that drove prices up, irresponsible lending practices, media induced hysteria that made people think they could buy a house and win the lottery with it, and plain old carelessness on the part of consumers. It was ludicrous to think that home values could keep going up 25% and more each year in California when wages were not even close to keeping pace. And when you think about these foreclosures, many people have less of an investment in these homes than renters in an apartment. With all the 100% financing they have nothing to lose but their credit by walking away from these homes. Which brings us to...
..the rental market. Rental companies and landlords are seeing their business boom as buyers pull out of the market and rent while they wait for the market to stabilize. They are being much more stringent in their selection process and I'm concerned that these freshly foreclosed upon homeowners (has somebody made a word for foreclose-ees yet?) are going to find themselves kicked while they are way down when they can't even rent a decent home. It will be at least the end of 2008 before things turn around and I fear that it will get worse before it gets better. Does anybody else hear the ticking time bomb of adjustable rate mortgages getting ready to recast?
..the rental market. Rental companies and landlords are seeing their business boom as buyers pull out of the market and rent while they wait for the market to stabilize. They are being much more stringent in their selection process and I'm concerned that these freshly foreclosed upon homeowners (has somebody made a word for foreclose-ees yet?) are going to find themselves kicked while they are way down when they can't even rent a decent home. It will be at least the end of 2008 before things turn around and I fear that it will get worse before it gets better. Does anybody else hear the ticking time bomb of adjustable rate mortgages getting ready to recast?
