dangerous play (as I've read so far)
home values are hugely inflated
when they drop too, you'll end up with negative equity and possibly a denied refinancing
worst of both worlds
home values are hugely inflated
when they drop too, you'll end up with negative equity and possibly a denied refinancing
worst of both worlds
As long as lots of people get crushed simultaneously, the banks will demand to be bailed out, too.
A bunch of Southern California homes are already in this state--the banks are allowing the "owners" to simply pay the tax and interest and still live there. Why? Because if they foreclose on just a few too many houses, the basis value will plunge, the "owners" will walk away, and the bank will be stuck with a house they can't sell which will promptly get vandalized.
Only suckers use cash as long as the government keeps bailing them out.
BRIC's is one of the weakest coalitions recently formed - SA just stated today they won't let EU president in, it's an absolute paper tiger.
To out in perspective, I'd love to see EU bring in a strong coalition to offset the US dominance because competition is always good.
It’s not like stocks where you can sell to reap your gains and just hold onto the cash or move it to a different asset. You have to live somewhere. For most people, selling their home now means moving into a worse quality rental and paying more, or paying 2-3x what you were paying on your 2013 mortgage payment for the same quality home.
Prices aren’t going to come down just because interest rates and prices scare away buyers. The sellers don’t care that there are no buyers because they’re also not selling. It’s a weird unhealthy place for the economy where everyone except the banks seem to be losing.
I’ve always believed that if you want to buy a home and can afford it you should buy it. Timing the market is too hard.
Will it make you house poor? Possibly, especially in a place like the Bay Area where many people will risk being house poor to own a home.
If rates go down prices will rise