Housing Market: "Crash"...?

"Thandie, we just won the Oscar for Best Picture! Why are you so upset?"

"Matt, I'm stuck in a negative-option interest-only mortgage, my payments are about to double, and the housing market makes the Oscar telecast look like the Autobahn! I'm totally screwed!"

Reuters is reporting a continuing decline in new home sales, despite claims that the warmer weather would boost orders a bit. Meanwhile, this statistic about Newcastle's subprime loan buyout shows that there's a healthy market for the bottom-feeders, even outside of Montgomery County. ;)

Is there going to be a major crash in the market? I think, as I've said before, you'll see regional bubbles pop and collapse depending on how severely the market's overextended itself. As long as counties keep levying disproportionate property tax assessments and sellers keep pushing prices $50-60k above their home's actual worth, the market's eventual "correction" will be harder. Some areas, like D.C., NorCal, and NYC, will be able to weather the storm because of a continuing influx of new jobs and investment. Other areas? Well, not so much.

I'm not as much of a pure bear about the market as Bonddad is, but I would heed his warnings nonetheless. People need to "get right" about the market, save their money, and stop flipping properties like they were flapjacks, or we'll be heading for a crash that all the Academy Awards in the world won't make any more palatable.

Posted at March 6, 2006 04:30 PM

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"Thandie, we just won the Oscar for Best Picture! Why are you so upset?" "Matt, I'm stuck in a negative-option interest-only mortgage, my payments are about to double, and the housing market makes the Oscar telecast look like the Autobahn! I'm totally screwed!" Reuters is reporting a continuing decline in new home sales, despite claims that the warmer weather would boost orders a bit. Meanwhile, this statistic about Newcastle's subprime loan buyout shows that there's a healthy market for the bottom-feeders, even outside of Montgomery County. ;) Is there going to be a major crash in the market? I think, as I've said before, you'll see regional bubbles pop and collapse depending on how severely the market's overextended itself. As long as counties keep levying disproportionate property tax assessments and sellers keep pushing prices $50-60k above their home's actual worth, the market's eventual "correction" will be harder. Some areas, like D.C., NorCal, and NYC, will be able to weather the storm because of a continuing influx of new jobs and investment. Other areas? Well, not so much. I'm not as much of a pure bear about the market as Bonddad is, but I would heed his warnings nonetheless. People need to "get right" about the market, save their money, and stop flipping properties like they were flapjacks, or we'll be heading for a crash that all the Academy Awards in the world won't make any more palatable.