That is what it is being called today on Channel 4 News. The Dow took a giant plunge today because of the real estate market. And one of the big players, Countrywide Financial is being targeted as one of the alleged lenders to people who could not afford to buy a house (it appears that these people were given some of the notorious ‘creative’ loans). Now some of those same homeowners are in deep trouble because their mortgage payments have increased and they can’t afford it. So now the buyer who has good credit and has a down payment is in demand.
But, get this, it turns out that Cupertino is being called one of the Bay Area “hidden gems” where prices are holding steady and multiple offers are still going in on houses for sale. One of the reasons is said to be the great school districts there. And I imagine being in the heart of Silicon Valley with jobs on the increase doesn’t hurt.
I feel the most important thing is not to panic and sell your home because you are afraid it won’t be worth anything much soon. That kind of thinking also doesn’t help the housing market for other sellers. Panic in this type of situation is much like panicking when the stock market plunges and people sell their stocks in high numbers which in turn makes the stock market plunge even more. Of course I realize telling you not to panic when you have a mortgage you can’t afford sounds ridiculous. It is very scary and I am not trying to minimize it. Instead of ‘creative’ loans maybe we should be coming up with ‘creative’ ways to help soften the blow for those hard-hit homeowners. Let’s put our thinking caps on folks! Meanwhile check out our own Redfin maven Brenda Keener‘s great posts covering Cupertino.
REAL ESTATE TERMINOLOGY:
Boot – In an exchange, any property that isn’t treated as a like-kind for income tax purposes; for example, if a building is traded for a vacant lot and a yacht, the yacht is boot.