[ex-Texan]

Have you recived your mortgage bill recently? Three million home owners with ARM loans just got a BIG surprise in the mail. Their mortgage payments are going up and and up and UP. (Want to Learn More?) To repeat the favorite mantras of FR naysayers: "There are no real estate bubbles. No bubbles here, not where I live, and no way Jose. The sky is not falling. Time to move on."

[nkycincinnatikid]

bump for reading

[Tempest]

true. All the idiots taking the bad loans and the greedy jerks who are offering them are to blame for this impending fiasco.

[GOPJ]

You run a lot of these "bubble goin' burst" threads. Do you want it to happen? What if it doesn't happen?

[narses]

My eyes glazed over 'bout halfway through this. Anybody with the background and expertise to analyze this and opine for us with less ability?

[Rockitz]

...plus if the tax reform passes whereby mortgage interest is no longer tax deductible, look out below.

[Mr. Jeeves]

With houses now regarded as sources of income rather then expenses, many people see no cost to homeownership. If a typical homebuyer in Southern California expects a $500,000 condo to appreciate by $100,000 per year, does he care if the $2,000 monthly mortgage payment consumes half of his salary? Of course not, as the anticipation of extracting an extra $100,000 per year in tax-free income means the house is expected to add to, rather than subtract from monthly income. In fact, with home ownership now perceived to be more lucrative than employment, is it any wonder that potential homebuyers will pay outrageous prices, and say or do anything to qualify for mortgages?

Nice, succinct description of the mentality behind the California real estate market. The concept of "carrying costs" is completely lost on these people...who are busy fantasizing about what kind of BMW they can buy when they get a home equity loan against their soon-to-be-appreciated value.

[TheLion]

You sure post a lot of these "Real Estate Bubble Burst Articles"....almost a tongue twister. Where I live, people have taken their properties off the market since we have experienced a slowdown. Also, most here can afford the costs and don't have to sell. While I will agree that there are problems, it depends what market location you are talking about.

I couldn't rent for what my mortgage of 15 years offers me. There are many of us out here that take owernership seriously.

[Capriole]

I live in a suburb of Washington, DC. A few months ago a pleasant, moderate-sized house--not the biggest or handsomest house in the neighborhood--sold for $700K. It took only a few days to sell. A month ago another house of the same size and floor plan went on the market for $640K. It has not sold. There was supposed to be an open house at this house today and I noticed that no auto traffic had even headed in that direction all afternoon. Seems as though the bubble has already popped around here.