Quote of the Day

Patience. In 2 years you can probably buy wherever you want at a decent price, and condos will be going for $100K like they should be. Right now people are either in over their heads and trying to get out at what they are in there for (plus the real estate commission), or else they are in complete denial - just like the government-speak. All this "if we are actually in a recession" talk just makes people think that free money and sub-prime borrowing standards will be back in a couple months, jobs will correct themselves by Valentines day, and everything will be peachy by Spring Break. I still laugh every time I read one of the reports where they say "If we are in a recession..." Are we in a recession? Just look around. If we aren't, God help us once we are. I predict in 2 years, when there are more foreclosures on the market than you can count, unemployment is at 10%, unions have been squashed, Wall-street is dead, and banks only lend to the 720's and up who have 20%-30% down with no more than 36% DTI ratios, and interest is up in the 9's and 10's, you will see the old New York coming back - and all that encompasses. In some ways it won't be a bad thing to have houses at normal prices with real lending standards in place again. Even at normal prices, some people will still not be able to buy a house, but then again contrary to the Clinton era logic, not everyone should own a house. Renting will still be an option for them, just like it has been for centuries. And for those who bought high, hopefully you will continue to have good fortune and enjoy your house and not need to sell it until you are back into an equity position. Kinda sucks that you paid twice or even three times what you house is now going to be worth, but hey - I bought tech stocks in the 90's and look where they went. As for now though, you won't really see prices drop until reality sets in. That hasn't happened yet.

Posted by: williamsburgguy at November 18, 2008 4:13 PM