Jump to content
House Price Crash Forum
Sign in to follow this  
strbear

Anecdotal - First Really Negative Piece I've Seen

Recommended Posts

I'm keen for a property in LA but the prices have been sky high (no surprises there then) - I follow the LA times and they have been running pieces on the slowing market for months BUT today is the first real negative piece I've seen - its tales of people suffering a major downturn because they are employed in the housing industry.

I know most will skirt this but I think its a strong piece of anecdotal evidence things are turning over there,

Snipe away,

http://www.latimes.com/business/la-fi-home...=la-home-center

SB

Share this post


Link to post
Share on other sites

http://www.signonsandiego.com/news/busines...cmortgages.html

High-risk mortgages turning into toxic mess

By Michael Liedtke

ASSOCIATED PRESS

12:54 p.m. August 10, 2007

SAN FRANCISCO – When Linda Martin refinanced the mortgages on three different houses nearly three years ago, she thought the lower monthly payments would help her save more money for retirement.

Instead, the Lakewood, Colo. skin-care specialist is sinking in financial quicksand amid a widening mortgage morass that's pulling down home prices and threatening to drag the U.S. economy into a recession.

“I'm hanging on by a thread, not knowing whether I am going to be living in a car in six months,” said Martin, who declined to reveal her age.

Martin is among the multitude of borrowers saddled with “option” adjustable rate mortgages, risky loans that dangled bargain-basement introductory payments and also let borrowers defer a portion of interest payments until later years.

An even larger group is wrestling with another type of adjustable rate mortgage, or ARM, called “interest-only.” These loans allowed borrowers to pay just enough each month to cover the interest owed on the loan, leaving the balance of the outstanding debt unchanged.

While most of the mortgage market worries so far have focused on the huge losses flowing from the subprime home loans made to people with bad credit, the option and interest-only ARMs held by more creditworthy borrowers loom as another calamity in the making.

If the worst fears about these loans materialize, the economic damage would likely extend well beyond the United States because much of the debt has been packaged into securities sold to pension funds, banks and other investors around the world who were hungry for high yields. The fallout could also further depress housing prices, leaving U.S. consumers feeling poorer and less likely to buy the merchandise imported from overseas.

...../

Share this post


Link to post
Share on other sites

RB

Thanks for that. One of the things about the LA (and to a lesser degree the SF markets) demonstrates to me is a London like attitude of "it may be happening in the rest of the US but it won't happen here" approach - so to see the LA Times have a significant piece like this tells me things really are turning. I've had no doubt they (LA,SF and SD) have had real problems but the sentiment in the press seems to be changing from can't happen here to might happen here.

SB

Share this post


Link to post
Share on other sites
I'm keen for a property in LA but the prices have been sky high (no surprises there then) - I follow the LA times and they have been running pieces on the slowing market for months BUT today is the first real negative piece I've seen - its tales of people suffering a major downturn because they are employed in the housing industry.

I know most will skirt this but I think its a strong piece of anecdotal evidence things are turning over there,

Snipe away,

http://www.latimes.com/business/la-fi-home...=la-home-center

SB

The slowdown in the housing market in 1990 increased unemployment tenfold as it affected the building industry with tradesman, labourers and those employed in that sector being laid off. It had a knock on effect thus in subsectors of that industry supplies etc . Regards immigration, do you remember all the Irish builders and labourers leaving London when times got hard. Then the financial layoffs, those were the days when you never had it so good in the city. Its amazing how things can change overnight. I am going by living proof not speculation.

3 things we didn't have then was sub-prime lending on the scale it is, BTL speculationon the scale as it is now and credit card debt on the scale it is now (1K or a couple of hundered quid in those days and most had only 1 card).

Something to think about ehhhmmmmm

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 350 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.