eFinanceDirectory published an article on December 18th that explores past housing price corrections (a polite way of describing a decline in the market). It’s short and sweet and details the correction periods (from 3-9 years) in different markets. Just so we can see there is a light at the end of the tunnel, no matter that it seems light years away.
Glad to see that they are starting to investigate and prosecute those lenders who helped to create today’s sub-prime debacle. On Tuesday, Bob Egelko and SFGate reported on a “Guilty Plea in Sub-prime Mortgage Scam.” Also this week on SFGate (and in the SF Chron) was the not-so-shocking news that “Investors Own About One-Fifth of Bay Area Houses in Foreclosure.” Money-grubbing flippers are getting caught in the downturn. Guess they forgot to weigh that whole risk-versus-reward factor.
I take some issue with the blogger at Millionaire Mommy Next Door, whose recent post was titled, “Dispelling The Myth That Home Ownership Is Your Best Investment.” It may not be the best investment for everyone, but for me and countless others, it has provided us with more equity than we could have earned in most stocks, bonds, or any kind of fund. But she does make you think about this issue, and her readers offer insight such as, “All current living generations in America have been force-fed the idea that home ownership is absolutely essential to financial freedom. It is an article of faith in the national religion. Question this and you are branded a heretic. Somehow, through an Orwellian twisting of the language and a corruption of the educational system, debt became wealth. The last two generations that would have disputed this have passed on.”
If you think that “Foreclosures Are a Symptom, Home Prices Are the Problem,” then you should read this very article on Home Guide 123. I wanted to agree with him on some levels, but disagree on others. I definitely think I need more coffee before doing that. My one early morning thought on this topic is that people have to take responsibility for their actions and stop blaming others. If you get fat from eating McDonalds, that is your fault—not McDonalds (not that this has stopped people from suing McDonalds for that very reason). Same goes for home prices—we as consumers allowed the prices to rise, we paid the prices, we took out the mortgages. Yes, there are those who may have been duped or given loans without proper documentation or without the income to pay for the loans, but overall we caused much of this to happen. As painful as it is, we may have to weather it out and hopefully learn from this lesson.
On our own blog, we have reported “Feds Consider Plan To Tighten Lending Practices” and on a corporate level, Redfin CEO Glenn Kelman appeared on the Today Show last Friday debuting the Real Estate Scientist and the “Seven Tactics for Selling Your Home” which brought debate amongst the Sweet Digs blogs and the Redfin forums.
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