Article

2008-10-31 Home Front Economy

7.5 million homeowners are stuck with upside down equity

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Posted by GolfBravoUSMC 2008-10-31 11:49|| || Front Page|| [11131 views ] Top

#1 Is there a natural law that says a home will always increase in value? That if you buy in a hyper-inflated market you are guaranteed to not lose money even though you bought a home that you knew was overvalued?

A lot of those folks, if they stay in the house and don't lose their jobs, will be fine in 5-10 years. If they bought to turn the house over and make a quick buck then they will be hurting (and should be).

Posted by tipover 2008-10-31 12:15|| 2008-10-31 12:15|| Front Page Top

#2 "Being underwater leaves homeowners vulnerable to foreclosure,"

It leaves the banks holding the bag if the homeowner decides to walk and no equity to cushion a distress sale. Another consequence of the stupid policy of 5% or zero down mortgages.

Posted by ed 2008-10-31 12:38|| 2008-10-31 12:38|| Front Page Top

#3 Guess I don't have to worry about capital gains tax. Thanks congress.

Posted by swksvolFF 2008-10-31 12:47|| 2008-10-31 12:47|| Front Page Top

#4 Speculation in any market carries considerable risk of loss. We got spoiled in the 90's and started to believe all the bullshit artists that were saying things like "home value will never go down, it's impossible" or "the stock market is really the safest place to put your money".

I just read an article online that determined that over the last 10 years you would have made about the same profit on a 10yr. CD as you would have investing in a major index after all the ups and downs you'd actually be ahead a few bucks with the CD.

Posted by bigjim-ky 2008-10-31 13:13|| 2008-10-31 13:13|| Front Page Top

#5 Good news: The gubmint gonna make it sos you can't make a bad investment anymore.

Bad news: The gubmint gonna make it sos you can't make a good investment anymore.

Posted by M. Murcek">M. Murcek 2008-10-31 13:15|| 2008-10-31 13:15|| Front Page Top

#6 I've read that people who are losing their houses are more likely to be Democrats. Maybe that's because Republicans are by nature more skeptical and less likely to be caught up by hype.

Posted by tipper 2008-10-31 13:31|| 2008-10-31 13:31|| Front Page Top

#7 Or maybe more Democrats than Republicans believe you can get something for nothing, tipper.

Posted by Barbara Skolaut">Barbara Skolaut 2008-10-31 13:37|| http://ariellestjohndesigns.com/]">[http://ariellestjohndesigns.com/] 2008-10-31 13:37|| Front Page Top

#8 Why not? With the $750,000,000,000.00 bailout *WE* have to pay for they may be right....

Posted by CrazyFool 2008-10-31 13:39|| 2008-10-31 13:39|| Front Page Top

#9 #6 I've read that people who are losing their houses are more likely to be Democrats. Maybe that's because Republicans are by nature more skeptical and less likely to be caught up by hype.

Examine the ratings of big city banks heavily involved in Fannie/Freddie loans. Examine the demographics. Behold the Democrat!

Posted by Besoeker 2008-10-31 13:47|| 2008-10-31 13:47|| Front Page Top

#10 Thats what happened in Kansas; both Senators and all but 1 Representative voted against the bailout - the exception was the representative for democrat heavy Lawrence and Kansas City gerymandered district.

Kansas City was, when I was in the area, full of the property speculators; build a house live there for a couple years then sell it at profit rinse repeat. The city of Lawrence has somehow got into the property purchasing and construction business under the auspice of the city providing housing for the poor. How that is legal I have no idea.

Posted by swksvolFF 2008-10-31 15:16|| 2008-10-31 15:16|| Front Page Top

#11 Other bubble states with high levels of negative equity include Arizona (29.2%), Florida (29.2%) and California (27.4%).

The traffic on San Diego freeways during rush hour is a lot lighter lately. It's kinda nice, actually. Sorry if I seem a little callous but the bubble created a lot of problems here and I think it was about damn time it got popped. The only bitch is that the rest of us have to pay for it.

Posted by Ebbang Uluque6305 2008-10-31 16:15|| 2008-10-31 16:15|| Front Page Top

#12 housing for the poor = (corruption + instant slum)

Posted by Ebbang Uluque6305 2008-10-31 16:20|| 2008-10-31 16:20|| Front Page Top

#13 Another story posted here discusses the glut of cargo ships; i see a potential win-win here: let the gov't (FEMA) rent the things and then them without houses can live in the holds.

Of course FEMA would need to line the bulkheads with formalhehyde-soaked plywood so they would feel right at home, but then that would also bail out the timber industry. and the railroads cuz you would need to ship that plywood somehow.
and you would need workers to do that, so jobs are created.

see recession fixed!

Posted by USN, Ret. 2008-10-31 16:46|| 2008-10-31 16:46|| Front Page Top

#14 You mean we ain't gonna turn them into Q-ships?

Posted by Phil 2008-10-31 18:06|| 2008-10-31 18:06|| Front Page Top

#15 BINGO!

Posted by Thing From Snowy Mountain 2008-10-31 18:06|| 2008-10-31 18:06|| Front Page Top

#16 Glug, glug, glug

hai hai!

Posted by .5MT 2008-10-31 19:25|| www.cybernations.net]">[www.cybernations.net] 2008-10-31 19:25|| Front Page Top

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