Posted by MoparNorm on Friday, October 12, 2007 at 09:52:47 :
In Reply to: Nanny Sam posted by Ken C. on Friday, October 12, 2007 at 09:10:59 :
Ken and David are right on...and I didn't have to post a thing.....ha!ha!
A free market is always self correcting, prices always fluctuate on a 10-12 year cycle, and always because we have short memories.
During the next few years the market will shake out the bad loans, the prices will temporarily drop, people will snap up the "bargains" and the whole deal will start over again,...for the umpteenth time...
I bought my first house in the 70's, a $26,000 house that was selling for $52,000, with payments of $450 a month, I didn't sleep at night for months, worrying about how I was going to make the payments...I now pay $600 a month...for a car payment...times change, prices always rise...that house, resold 12 years later for $275,000. It's now "worth" $750,000. Everything is relative, we pay more we get more when we sell and the cycle repeats itself.
It's supply and demand. When the demand diminishes the prices moderate. People that can barely afford to buy a teaser rate adjustable loan should have KNOWN that they would be in serious trouble when the rates started to climb.
Ken, it may or may not be stupidity or ignorance, but it certainly was denial.
The moral of the story is to save, save, save, for a down payment. With a decent down payment, house payments are alway less than rent and you will have equity in your home in a few short years.
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