BREAKING NEWS! Attorney General Alberto Gonzales has resigned from office! GOOD RIDDANCE!
The recent troubles in the stock market are, in large part, due to the fact that the housing bubble burst. This is having negative effects even on the middle class. People that are otherwise doing pretty good economically speaking are taking a real hit on their real estate holdings:
Flips, scams blamed in California housing decline
By Christelyn Karazin Mon Aug 27, 2007
CORONA, Calif (Reuters) – Bhaviesh and Varsha Shah bought their dream home in a new development east of Los Angeles two years ago, planted flowers around an emerald lawn and picked out wicker furniture for sitting outside on cool afternoons.
Today the view from their porch is a street pocked with boarded windows and dead lawns — homes now repossessed after buyers failed to make mounting mortgage payments.
The Shahs live on a street with 10 large homes of 3,000 square feet or more, four of them now in foreclosure.
Some of the homes being repossessed were bought by people that couldn’t make the monthly payments and didn’t know it at the time. Others were bought by people that had no intention of paying the mortgage. They just wanted to run a scam and live in a nice house for as long as they could for free. Still others were bought by “flip artists.” Speculators that buy real estate and sell it at a higher price as quickly as they can. The easy credit that allowed them to buy with no money down and finance 100% of the cost of a home allowed these buyers free reign to BUY, BUY, BUY. Now that the bubble has burst, they simply walk away dumping the property on the lender. Ms. Karazins article goes on to say:
Joe and Mary Gordon don’t feel much like sticking around, but have little choice.
They bought an approximately 4,000 square-foot (371 sq meter) home on the street behind the Shahs for $741,000, thinking it would be their last home after moving from Orange County, just west of the Inland Empire.
Two homes on the Gordon’s street are going through foreclosure and one of them, comparable in size to theirs, is being offered by the bank for $550,000.
The Gordons fear they will lose hundreds of thousands of dollars in equity. “We have no recourse. We’ll have to live here eight to ten years before we get our equity back,” said Joe.
What the Gordons are experiencing, owing more then what their house can be sold for, is what real estate agents refer to as “upside down.” This all will have real consequences for the US economy. Many people have been refinancing their homes as the housing bubble increased the worth of their homes. Most of these people are in the upside down situation now that the housing market is down. They spent the money they got from refinancing their homes on consumption. This is what kept the economy growing, even as wages stayed flat or even declined. Take this consumption out of the economy, and you get a real reduction in economic growth. We’re in for a real rough time because of all this. Don’t be fooled by the cooked books rosy statistics created by our government and spread by their MSM. The US economy is teetering on the brink of disaster. If it goes down as far as it can fall. It will most likely take the rest of the world economy down with it. We can be looking at the worst economic drop since the great depression. Even if the economy doesn’t completely collapse, there is a real ripple effect happening and an economic downturn is happening as we speak. How low our economy will drop is an open question, but I don’t like what I’m seeing:
If the world economy gets hit hard enough we will be seeing more of this:
Just remember, it was the thieving corporateers and their bought and prayed for idiots in washingtOOn that caused this disaster. Don’t let them con YOU into paying for it. Let them go after the pigs that got filthy rich from this disaster. Insist they repeal the bush crime families tax cuts to the wealthy! If they won’t charge the rich for this disaster, then do what you should do anyway. VOTE THIRD PARTIES COME ELECTION DAY!
The telepathic crickets on theClapSotronics editorial board and I are glad we don’t own real estate!
The scientifically impossible I do right away
The spiritually miraculous takes a bit longer