< HOME  Tuesday, April 04, 2006

America's Road to Housing Hell

Existential Equity Extraction and Six Months to Housing Hell by Richard Benson outlines reasons why American homeowners are about to descend into housing hell.
If you really needed to make ends meet while living in this so-called Housing Heaven, all you had to do was buy a vacation home, rental property, or second-home and proceed to “install your own ATM on the side of your financed house” with your bank’s help, of course. Who needs to work, when you can simply go to the bank and rob your own house? It’s easier than robbing the bank! Living this way is fine in Housing Heaven, but not down here on earth. Here’s why.

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[In sum] As the refinancing game ends and borrowing costs increase, a significant rise in foreclosures could put a few million more homes back on the already-saturated market! When these foreclosures come, many of the homes for sale will have no equity and the seller will want a quick sale. Buyers will still be choosey, unless there is a real deal and the prices are marked down big time. The entire structure of housing prices will move lower with these forced sales. With mortgage foreclosures mounting up, it could get unbearably hot in Housing Hell.
Great read, albeit grim conclusion. Mirrors an earlier piece by Peter Killelea at Axis of Logic.

If you're in the market to sell your house, it's time to put your strategic thinking cap on. You don't want to be the last seller to settle for less.

Thanks, silverisgood, for the link to housing hell.


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