I like how you think!
Posted on 01/16/2008 7:49:02 PM PST by Clintonfatigued
A house in this wealthy Chicago suburb is far beyond the reach of most Americans.
Unfortunately, Hinsdale may also now be too expensive for some of the people who already live here.
"There is a section of the population here that over-extended themselves to buy here and then keep up the facade of wealth," said Sharon Sodikoff, a broker associate at local real estate agency Prudential Homelife Realty. "In the next year or so they'll be forced out in dribs and drabs."
With a picturesque little downtown area and large, expensive houses -- according to the Headrick-Wagner Consulting Group, the average home sale price here in the 12 months to September 30, 2007, was around $1.15 million -- Hinsdale seems a world away from the housing slowdown that may have brought the U.S. economy to the brink of a recession.
But even here, far from the housing crisis' epicenter, high earners with good credit may be heading for trouble as their adjustable rate mortgages (ARMs) adjust beyond their means, local real estate agents and others say. In a normal housing market they'd be able to sell, but now they are stuck.
(Excerpt) Read more at news.yahoo.com ...
This is bad and not getting better.
Those that downscale , will make room for those that move up. At a much better price.
Remember when Bush took office, a recession was already active.
True, the housing market had a bubble just as the stock market did about 5 to 10 years ago. There will be corrections.
However, many lenders made loans they never should have made.
Too bad. No sympathy for them from this quarter.
ALL income groups can be stupid and buy more than they can afford!! EVERYONE is suffering because of these people...buying outlandishly priced first and SECOND homes, homes to FLIP, disposable homes.
Oh, so the same people who were telling me what geniuses they were for “investing” in an obvious real estate bubble, and telling me how stupid I was for “throwing away” my money on rent rather than a mortgage are now getting their heads handed to them...
Cry me a freepin’ river...
I like how you think!
I’m with you on this...
Not to be vindictive, but if you overextend yourself...you cannot blame anyone else.
When my wife and I bought a house and developed a lifestyle, we did it in such a way so that if one of us was to lose a job (layoff, injury, etc) we could tighten our belts and squeak by. Wouldn’t be easy, but we could do it.
Instead of buying a big huge house with a big yard, etc...we got a little ranch. I know many people just don’t think that way, but...it is a choice.
What if you buy a 15 million dollar mansion and it is only worth 8 million? Live in it for 10 years.
Wouldn’t be easy, but we could do it.Instead of buying a big huge house with a big yard, etc...we got a little ranch. I know many people just don’t think that way, but it is a choice.
We did the same thing--the planning to only use one income. (thinking that we'd have kids one day) Not a ranch, but a bungalow. Sure isn't fancy, but we're not in debt up to our eyeballs either.
whaddaya mean...livin outta cars....
We didn’t have no steenkin cars...we had to sleep in the road...and were GLAD of it!
Yes, optimism is intimidating to some.
I agree with you.
We bought what we could afford also. An old house in a small town on a quarter of an acre. We just decided to live within our means. It takes a huge burden off one financially.
Sure, I wouldn’t object at all to a bigger place that doesn’t need the amount of fixing up this one does, but should the economy ever belly up, we’re all set.
Besides, I never could see paying 2-3 times the value of the house in interest.
Housing prices outpaced income. It did so across the entire housing market. There would be no housing crisis if income could have kept pace with prices. The hidden problem aside from that which compounds the overall mess is that home owners who had significant equity in their homes, used the rise in housing prices to borrow further against their home, using much like an ATM machine.
Bogus title.
An excellent choice if it fit your circumstances at the time.
My wife and I bought our current house 15 years ago with a 15 year mortgage that I could afford on my pay, her pay wasn't included in the figuring. We paid the mortgage in about 9 years
Over extending is no ones fault but the person who over extended.
I get mailings all the time from institutions wanting to loan me money on my house. I don't need the money but if I did I'd have to think long and hard about having another mortgage to pay on this place.
If they’re smart, many expensive houses could be sold to foreign investors.
Exactly. Add to that greed the greed of house flippers, mortgage co.s, etc. Greed all around.
OMG, wealthy people who make bad decisions could be accountable! It’s a tragedy! And it’s getting worse!!!!
Women and minorities and wealthy hit hardest! Ahhhhhhhhhhh!!!!!!!!!!!
Bingo. That’s the key to most of this. Time. Over time most of these properties will appreciate towards the recent peaks (and beyond). As Michelle Malkin would say, Suck. It. Up.
Just to correct the misleading title:
If you’re overleveraged, you’re not “wealthy.” A wealthy person has positive net worth and, if wise, a diverse portfolio.
But this article is neither about the wealthy nor the wise.
Someone..please explain this...why is it beneficial for the banks to foreclose on these homes and let them sit there then just renegotiate these adjustable loans...I DON’T GET IT.
btt
I say...
Long overdue getting this nuevo rich riff-raff out of the neighborhood.
Perhaps now we can drive our Bentleys down the street without being concerned about the fenders being dented by their 2 year old Mercedes.
In a normal market, houses wouldn’t average 1.15 million...
I don't either. Unless there's a huge tax write-off or they're waiting for a big bailout (same-same I guess)
A leftist defines wealthy as having more money than they do. Having a mortgage on a million dollar home is not wealthy. The wealthy pay cash and do not have this problem.
The problem I see are all these pandering politicians offering federal bail out plans. This is not a natural disaster or recession. The economy, in terms of income, hasn’t changed drastically in the last five years. If these folks who are in trouble had simply gotten a fixed rate mortgage when they bought these homes there wouldn’t be a problem. So I got my 5.75% 30 year fixed mortgage and paid it on time every month for a house I could afford. Explain to me again why my taxes are bailing out the guy who bought a more expensive home with less down for the teaser ARM at 1.75% or whatever. Or why his rate should be frozen at the original teaser rate. Or why he’s not accountable for the second or third mortgage he put on the house after just a year or two to buy more stuff he can’t afford. Or any of the other dumb ideas I hear from our elected dum-dums.
Yes, some lenders were unscrupulous, but the consumer is the one that should be held responsible. If there is a bail out of any kind I will be furious.....I do what is right and no one is paying my bills.
"There is a section of the population here that over-extended themselves to buy here and then keep up the facade of wealth,"
: )
You maywish to speak with Deval Patrick, who when at the Justice Dept. under Clinton hammered the living crap out of the banks to do just that.
The headline is misleading, claiming to be about the wealthy being hurt by the housing "crisis", when the reality is that it is the pitiful dupes who feel compelled to keep up with the Joneses by presenting "the facade of wealth."
“We did the same thing—the planning to only use one income. (thinking that we’d have kids one day) Not a ranch, but a bungalow. Sure isn’t fancy, but we’re not in debt up to our eyeballs either.”
Seems common sense isn’t so common anymore...
Agree with your thoughts.
Dave Hanna, managing partner of Prudential Preferred CRE, shows off a 6,500 square feet (604 square metres) home in Burr Ridge, a suburb of Hinsdale,Illinois, in this undated photo. With a picturesque little downtown area and large, expensive houses -- according to the Headrick-Wagner Consulting Group, the average home sale price here in the 12 months to September 30, 2007, was around $1.15 million -- Hinsdale seems a world away from the housing slowdown that may have brought the U.S. economy to the brink of a recession. But even here, far from the housing crisis' epicenter, high earners with good credit may be heading for trouble as their adjustable rate mortgages (ARMs) adjust beyond their means, local real estate agents and others say. In a normal housing market they'd be able to sell, but now they are stuck.
The suburb where I live is filled with McMansions and leased luxury autos parked in front of them. The houses have no furniture or cheap furniture because the Smiths who bought the houses to keep up with the Joneses are as broke as the Joneses. Further examples of the difference between intelligence (which they have) and common sense (which they lack). The saddest part is that they’re raising kids to live conspicuous overconsumption something-for-nothing lifestyles too and wonder why everything turns to sh*t when a job is lost, the ARM adjusts, etc.
There is absolutely no excuse for it. The 1980s Texas S&L crisis showed what happens in a real estate bubble. The 1990s dot com bubble reinforced the lesson. Now we’ve got another real estate bubble bursting.
The homeowners aren’t the only ones who exercised bad judgement with regards to the mortgage crisis.
But that doesn’t answer the question...why wouldn’t banks renegotiate these mortgages?
Maybe they think the customers won’t be able to meet any satisfactory terms. The business community in this country is very short-sighted. And the number of people who are abondoning their homes reflects this.
sw
Poor credit risk? Isn’t that redundant? If they got these low rate mortgages and were able to afford the low rates, why not just let them stay with the LOW RATES??? Maybe pay a little more at the end? I don’t know...maybe a little creativity is in order.
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