[rb22982]

If you take "Florida" out of the south, most of it is very affordable. One thing that makes real estate harder to judge based on the last 30 or 40 years is that interest rates are so low. Borrowing 100k at 12-20% is as expensive or more expensive than borrowing 200k at 5%. Real costs of ownership are not up as high as it would appear based on value alone. The problem with the bubble was that loans were given to people with crappy credit with little/no down and just no down payments period. If you plop down $25-100k of your own money up front, you'll think long and hard before signing the dotted line.

[umgud]

I bought my current house new 7 years ago. It trippled here in the boom, but now we’re in a bust and it has dropped in value, but, it is still worth more than double what I paid for it.

[fight_truth_decay]

These sub-prime loans were not all typical loans; but re-fi's where debt (vehicles, boats, old credit card debt) was also rolled into the "loan" package, along with extra money, in one case I know of, $10,000 for new furniture etc. This young guy had a history of bad credit, but Congress said to the banks, give "this class of people" money so everyone can take pride in owning their own home. The Banks said cool! Will do! Now they are stuck with homes holding no equity. Not so cool now!

[Polybius]

Real costs of ownership are not up as high as it would appear based on value alone. The problem with the bubble was that loans were given to people with crappy credit with little/no down and just no down payments period.

And those people were bidding against you for the house you wanted and bidding $450,000 for a $250,000 house.

As a result, the only way that even people with good jobs could afford the Bubble prices was with a gimmick loan.

As a result, in 2004, 47.1% of the mortgage loans issued for purchases of single-family homes in California were ticking time bombs.

MAY 18, 2005 ... A Growing Tide of Risky Mortgages...Here are some scary statistics: In 2004, fully 50.4% of the mortgage loans issued for purchases of single-family homes in Georgia were to pay interest only. That made the Peach State No. 1 in the nation in its share of interest-only mortgages. But a whole bunch of other states were not far behind: California was second, at 47.1%, Colorado third, at 45.5%, Nevada fourth, at 44.7%, and the District of Columbia, fifth at 43.8%. ... the sheer numbers indicate that the loans are also being taken out by a much bigger sector of the public -- people who are struggling to get into a rising housing market and feel that they couldn't get the properties they want any other way .... "In most of those cases, buyers have no idea how they're going to pay" the higher payments that will be owed once principal payments begin, says William J. Pulte, founder and chairman of Pulte Homes

That was written back in in the year 2005.

The "once principal payments begin" time frame predicted as a disaster back in 2005 is .....now.

But, back in 2004 .....

"Hey, don't worry! Be Happy!! Four years from now, in 2008, you house will have increased in value and you can refinance!!!"

"Drink the Kool-Aid and sign on the dotted line."

Interoffice e-mail: "Sally, the fool signed. Package up all the loans we made this week and sell them to a Greater Fool on Wall Street as a high interest safe investment. After I am filthy rich, how about dumping that loser husband of yours and running off to the Caribbean with me?"

[Notary Sojac]

Borrowing 100k at 12-20% is as expensive or more expensive than borrowing 200k at 5%.

In a static economy that's true.

But if that 20% rate goes to 8% you can refinance, while if the resale value of that $200K house drops to $150K you're just screwed.

[KarenMarie]

We bought this house with cash 7 years ago. We paid $135k and our property tax was $2,400.

18 months ago, the county decided it was not making enough money and sent the assessors around the entire country. Over night, the value of my house changed from $135k to $302k and my property tax is now over $5,000.

I look at houses in the area that went for $250k when five years ago that are now going for $6-6.5k! They are paying over $10k per year in property tax.

Astounding!