The real housing bust has not even started.

[Wcross]

August of 2005 saw the largest origination of adjustable rate mortgages at a whopping 70+ percent of all mortgages originated. Guess what was hot? 2/28 mortgages. And what was last month? That’s right, 2 years and now these people are facing larger payments with mortgages amortizing on different schedules. In addition, they no longer have the option of refinancing because this will push payments higher and the reason they took out these exotic loans is to squeeze into an overpriced home.

http://drhousingbubble.blogspot.com/2007/09/when-housing-clock-stops-ticking-why.html

If you read the link you can see why the situation is going to get a lot worse. Why would people need or want an adjustable rate mortgage at an historic low point for interest rates? Payments on their home would triple with the hope that they could refinance to a low fixed rate FHA loan.

Its funny how easy it is to spot a bubble in hindsight. There are no less than 5 "home flipping" shows on television, everybody is bragging about their home values and buying more than they can afford. Slap a coat of paint on and put in travertine tile so you can jack the price up 20-40%?

We have a train wreck on the way for our economy, THANKS GEORGY BOY. I am very negative on the economy surviving. Maybe I have been visiting this site too much;
http://ml-implode.com/

[FreakinDJ]

1. Housing not the only reason economy is going to tank

“America” - Does not manufacture any thing anymore

At least not in comparison to the past decades, and in the rush to out source companies have divested their selves of all their machine tools. The means to manufacture and the largest purchasers of our “used” machine tools has been China, India, and Mexico. At least their corporations see a market and aim to fulfill that market

How is that important

5 words – TRADE DEFICIT and NATIONAL DEBT

Together about 900 Billion with China alone. Not only does our country have these outstanding debts we no longer have the means produce the goods to pay it off.

We are Bankrupt folks plain and simple

[Deja Q]

4. Rescinding the tax cuts, or at least curbing 'government subsidy' would help a lot...

In either case, especially the latter, it is not increasing taxes. We're either no longer giving the large companies money they don't need, or putting the tax brackets back to the way they were, without adding to what it was before we made the mistake of cutting them in the first place.

Besides, with China's reputation for making garbage, some of which is toxic, they're in a far worse pickle than we are.

[FreakinDJ]

10. Wish that was true

"Besides, with China's reputation for making garbage"

Intel is now investing 1 Billion in a new chip facility over in China. 1 of the R&D engineers comes over for dinner occasionally. He is talking about retirement

So you can write of the microchip industry too

[Wcross]

15. The regulatory costs are much lower in China as are the wages.

If I am the CEO of Intel I am going to China. No EPA. No workers rights. People work a week for what Americans expect per hour. No question I am going to have a plant in China. If it works out I am moving ALL my plants to China.

What can/should we do to stop this trend?

[FreakinDJ]

22. Simple – Rescind the Bogus Trade Agreements

Lack of Workers rights, Basic Living Wages, and Ecological standards, are but just a few items missing from NAFTA and China’s trade agreements.

We only off-shored the labor violations and ecological disasters.

BTW: Canada’s Acid rain comes from the burning of coal in China

[Zhade]

28. Remember this when you go to vote in the primaries.

I'm pushing no candidate here - just remember which ones have betrayed the Yankee worker while pretending to care about us.

[WinkyDink]

25. Make the CEO's move to China, too.

[Wcross]

27. As a stockholder I demand lower cost management!

Who is to say I couldn't find better management talent for 1/10th the cost I pay in the States if I went to China? As an owner of the company I think we ought to explore that!

[Wcross]

5. I agree but nothing good could come from this either.

It just adds to our trouble. Perfect storm?

[CountAllVotes]

7. that is why they need to raise the rates

you just pointed out all of the reasons why a rate CUT will NOT help this situation.

Inflation is just beginning!

:dem:

[FreakinDJ]

12. Corps will need the rate cut once the trade imbalance is addressed

Hopefully Edwards gets in and holds true to his promise to address or rescind some of these ridiculous trade agreements. They are nothing but a huge give away to CEOs and Multinational Corporations.

But those that do want to remain and re-tool to begin manufacturing again are going to need to retool, and that takes money and lots of it.

We should have seen this coming when Intel, Microsoft, and Cisco were holding a combined amount of 1 Billion ear marked for capitol investments back in 2001

[BlooInBloo]

2. I don't think there has been any single loan more common than fix30.

[Wcross]

26. The most common loan is the fixed rate.

However, the story claims that in 2005 70% of the loans originated were adjustable rate loans. These loans will not be around for thirty years to add to the statistics. Either people will be able to refi into a fixed or they will lose their home. Perhaps the most common loan is the fixed rate due to the fact that the borrowers are able to pay them? When you have to borrow using an adjustable during an era of historically low rates you are not likely to be able to afford the home when the dust settles.

[AlCzervik]

3. in 2006 40% of all homebuyers in Ca. got funky mortgages, these mortagages

have a 1, 3 or 5 year trigger on the rate adjustment so here in Ca. we're in for a bad ride for the next 10 years imo.

[FreakinDJ]

6. I heard that on the news here in Sacramento

40% of California homes on those funky loans

Frankly right down the street there is an entire development project (approx 100 acers) with with streets, sidewalks, streetlights, utilities and about 12 model homes where the contractor walked away prior to completing the model homes

Probably can get a heck of a deal on 1 of the models

[AlCzervik]

9. i'm in Elk Grove and the foreclosures here are way up as you probably already know

and the housing prices continue to fall, on my street right now we have 2 in foreclosure and 2 that sold short, this is a cul de sac with 22 homes, not good.

[Ecumenist]

13. FreakinDJ, I live in the north Natomas area and there is a development that is about

2 miles from me that matches your description EXACTLY. There are about 12 models and sidewalks- the whole nine yards-and there hasn't been ONE home built since that subdivision opened in late June, early July. It sits at the intersection of Del Paso Road and Gateway Oaks, I believe. Is this the one you speak of?

[AlCzervik]

14. when i moved here i almost--almost bought in the mega sub divsion in Natomas.

[Ecumenist]

16. Ohh, You'll one day realise how smart that was!! I live here BUT I don't own here

I own a piece of property in Tehama county and we're building a home there, going the owner builder method and pricing EVERYTHING as economically as possible. You couldn't pay me enough to buy anything here. This area is a floodplain, BIG TIME!!!

[AlCzervik]

17. you what stopped me---the flood insurance question, i asked one of the sales people

at one of the builder's "Do i need flodd insurance here?" "Um, lemme check.......um not anymore" "Ok thanks, i won't be buying anywhere ner here".

[Ecumenist]

19. AMEN...We bought private flood insurance even though we only rent

but got news for you. Elk Grove floods too, usually due to the water that drains down through Sheldon and Wilton area. It really depends on where you are in that area. the Consumnes has flooded alot since I've lived here, since 1982.

[AlCzervik]

21. out street flood during the heavy rains but so far so after 7 years, no one

has had any water make it past their driveway. 6 more years and i'll be selling and moving to the coast and 6 years can't come soon enough. we all need to plan a meet up before the primary.

[FreakinDJ]

20. 27 feet below river level - Natomas is a "Sink Hole"

I worked in the flood zone up in Yuba County after the 96 flood. It was like a Nuclear Holocaust. Dead animals and plumes of smoke rising from spontaneous combustion hay Bails all over the place. Every thing you could imagine was up in the tree tops. Garbage cans, household items, even an ATV was deposited in the branches of a tree. I even saw a house sitting on top of the family car

And EVERY THING I mean every thing was covered with the grey river silt

I would move fast if I were you. The Sac River floods about every 10 years

[FreakinDJ]

18. No this 1 is on Rio Linda Blvd

and the contractor stopped before the side walks and concrete driveways were put in

Actually the concrete forms and stakes are in but work stopped almost 1 yr ago. Recently some signs showed up in the windows of the models "Available"

[Ecumenist]

23. Is that the one that has had Auction signs up? I've seen some driving down I80

regarding a new home auction. I'm telling you though, this one that is right next to me is going to next to join the auction brigade. When they were working on building the models and putting in streets etc, I asked my husband why they were doing that when it was already clearly apparent that noone was buying anything. I mean to tell you, NOTHING has been sold or even built in the form of anything at all other than the existing models. If you get a chance, next time you drive to this area, take a swing past that subdivision; it's a hot mess to see what was a producing field turned into a doomed, unsold AND uncompleted subdivision.

[GreatCaesarsGhost]

8. in my neighborhood, there are no "for sale" signs anymore

just signs with the realtor's name on them. too many for sale signs may make people think there is some sort of problem. my neighbor's house has been on the market for over 6 months.

[rucky]

11. Add that to the dropping home prices..

and tightened-up guidelines, and you have a bunch of people who were told that when their ARMs are ready to explode, they could just refi off their growing home equity. Oops. Equity's shrinking. Now they're going to find themselves upside-down on their mortgage with no exit strategy.

[Wcross]

24. Do you remember the ad's for 125% mortgages?

Forget about upside down- 25% of all those loans were unsecured! I guess you CAN'T borrow your way to prosperity!:crazy:

[KoKo]

29. Dr. Housing Bubble is a good blog. There's a great article on Florida in the '20's

Housing Bubble and what went on. Thanks for the link...I'm bookmarking it.

http://drhousingbubble.blogspot.com/2007/09/florida-housing-1920s-redux-history.html