Re: is the housing bubble ready to pop ?

I differ with the interest rate scenario this time around. Now it is
plain old PE that is the killer.
It costs $6 / $1,000 mtg / month at 6% 30 yr for a normal mortgage but
few can pay that on $300,000 worth of splinters so the old "baloon"
payment idea is resurrected since most of the payment is interest
anyway in the early yrs. The 21,600/yr payment is replaced by an
$18,000/yr interest only leaving $3,600 to accumulate at some interest
rate for say 5 yrs or so. This was done because the buyer could not
afford the 3k per year and yet the buyer has to have some way of
paying. Well the fast talking RE Salesrobber says something like,
Don't worry about it, the place will be worth more so you just borrow
on its new value ... yeh sure. Enter some unknown number of defaults
and ...

I'm being optimistic.

arthur
=======
On Tue, 19 Jul 2005 20:35:28 GMT, "DirtBag" wrote:
>
>"Genghis Khan" <psyhakias@xxxxxxxxx> wrote in message
>news:1121775382.701511.163830@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
>> prices are over inflated and the economic growth cannot support the
>> astronomical prices homesellers have been demanding so far in this
>> bubble imo. thoughts ?
>>
>When the interest rate climbs above the magic number that supports the
>investment part of the RE market. namely homes bought as rentals on
>adjustable rate mortgages . ( when rents cant support the increased mortgage
>payments ) there will be a huge increase of inventory and prices will
>plummet. There are a few areas that will not be effected as much as
>others. Sanf Francisco being one. Limited and exclusive is the place to be
>when the *** hits the turbine.
>
.

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