Why This Housing Bust Is Worst Ever: The American Dream Ends

mooblikatz, i'll bet for every consumer that received a high appraised value, none of the questioned it when they saw that the values were going higher. Now that they are going lower, are all appraisals going to be questioned? The market is the market. There were many of folks who bought property and turned it into a profit. Now you may not be able to do that. for a variety of reasons. The American Dream still exists. It has nothing to do with brokers or lenders. It's yours if you want it. If you dont want it, move to a different country. No one will stop you.

People seem to have forgotten that this has all happened before. It's almost identical to the 80's real estate bubble that basically wiped out half of the S&Ls in the country. I bought my house in Fairfield County CT in 1988 as prices had started to come down. Two years later the bottom really fell out and I couldn't give it away. People were mailing their keys to the bank in droves and were walking away from their properties. I bought in 1988 and by the year 2000 it was was still worth 10% LESS than what I had paid for it. Yep, over a decade later in one of the hottest markets in the country. So, my bet is anyone who bought in 2005 will see the same price for their property in 2015 (obviously it depends on location).

can anyone translate what the hell Johnny Ike said?? BTW swivel - if you have nothing intelligent to contribute - please don't put drivel like that on here. The housing situation is very serious NATIONwide - granted - the media is a great hype machine - but to say this is limited to a select few markets is ignorant and dangerous. As someone who works for a national homebuilder - I think Atkinson hit it on the head. Buying homes was the 2000's version of the "gold rush" with everyone thinking they could become a real estate baron...

Why do they call it the American dream? Because you have to be sleeping to believe it. This will end in disaster, the FED must raise rates soon. People I see are happily moving out and turning the keys in, to lenders who are IN BANKRUPTCY COURT. They took more equity out than they were ever worth. Saw one this week that took 1.1 million equity and is now selling for 488k.

1. The drastic increase in home prices that occurred over the past decade in many markets "killed" the American Dream as much or more than the current drop in prices -- a great many people were priced out of a home. Even as prices decline, they are not low enough for many first-time buyers. 2. She talks about this "new" attitude of people willing to walk away from loans. She should have been Oklahoma and Texas during the Oil Bust. This isn't new.

The worst thing one of our presidential candidates could do is increase income taxes. That will prolong the housing downturn for sure. Home are still the best investment one can make. It is one of the few tax shelters we have. Just be sure to appeal your tax assessment because municipalities have gone too far. The subprime crisis is only half of the story. The other half is the real estate tax crisis. Municipalities have been re-assessing at peak values for some time now. This is causing just as much pain as the tightening of credit and underwriting standards.

We turned homeownership into an investment tool. So why wouldn’t you walk away. If you have some losers with your portfolio, you would take your losses’ and look at the next tool. Homeownership is a huge money mover within our market and next is cars. Cars lose value, we all know that, but the home as always been a place to help families start a business, send kids to college… well you get the point. That has all stopped. People don’t even wish to remodel as the value isn’t there. So what is a person to do… walk away. The investor takes a hit on his/her credit, so what! Investors do not always use banks or their credit to purchase homes anyway. Our government needs to bring back the value of being a homeowner. In addition, create jobs within our county, rather than letting companies send them overseas. As this reduces the amount of money, the average household makes.

This slump in the market is going to let many young professionals enter the housing market. Those who have entered the job market in the last 5-6 years had no way to purchase a home until now. Mortgage rates are coming on par with rental rates, this will pull the trigger for young buyers who tire of renting.

There are simply no factors in our economy that will turn the current slide downward around any sooner than 1-2 years. in late 06', pundits said we were in for a rough quarter or two correction in home values. in early 07' the same said we'd see some corrections through the year. That was based largely on FINANCING or the lack thereof as it was just then disappearing and the liquidity issues we've seen for nearly 18 mos. now were just heating up. Now we hear 09'? With the fed policy as it is + OIL, unemployment, sagging wages of the employed and lurking inflationary pressure, we're in for what may be some years of downward movement and then a FLAT bottom followed by modest gorowth.

There is no such thing as never ending sustainable economic growth. Until americans realize this and change policy and education towards frugality, longevity, and value this is what you will have boom and bust cycles that favor the bankers.

We talk about "predatory lending" practices and accuse Lenders/Brokers of such. For the ignorant ones out there, there is a "3" day rescission period! I don't blame the Loan officers , I blame the borrowers who's futile attempt to "keep up with the Jone's" are now paying ther price. My suggestion? once a renter, always a renter

There are simply no factors in our economy that will turn the current slide downward around any sooner than 1-2 years. in late 06', pundits said we were in for a rough quarter or two correction in home values. in early 07' the same said we'd see some corrections through the year. That was based largely on FINANCING or the lack thereof as it was just then disappearing and the liquidity issues we've seen for nearly 18 mos. now were just heating up. Now we hear 09'? With the fed policy as it is + OIL, unemployment, sagging wages of the employed and lurking inflationary pressure, we're in for what may be some years of downward movement and then a FLAT bottom followed by modest gorowth.

I wish there were someone at Fannie Mae or Freddie Mac to hear this... There is a rapidly growing problem with people who decide to buy another house, then let the one they own (that's worth far less than what they owe) fall into foreclosure. This way, their credit is preserved for the duration until they can buy their 'bargain' replacement home. IMHO, I believe this practice is magnifying the foreclosure epidemic we are seeing. I believe that Fannie Mae and Freddie Mac are capable of requiring home purchase Borrowers to prove that the home they are ostensibly 'leaving behind to rent out' - has at least a modicum of equity - proven through an appraisal of the property they are leaving behind. I believe this purchase lending requirement will go a LONG WAY toward stemming a growing tide of foreclosures. Is anyone that can help make this loan underwriting revision a reality - listening? I hope so.

the housing industry is set up by national,state and local governments to be a never ending source of tax revenue. more and more buyers are starting to figure this out and without some form or tax reductions on a permanent basis many buyers will stay away and opt for renting. Ca has already indicated they would eliminate the mtg interest deduction due to budget problems and with a flat tax/vat being pushed nationally it is only a matter of time until these "benefits" are lost. Remember when credit card interest was deductible? A home is not an investment, an investment pays you money. Withdrawing a appreciated equity is very costly and muct be repaid

Awesome to hear so many informed comments here. The national market SHOULD be going down. Even after the drops in the previously "hot" areas, prices are still up at least 50% from 5 years ago. Prices should come down to realistic levels. People are still sitting on unrealistic gains in housing. These real estate biz people just have to cry it out and live of the ridiculous fat from the past 10 years.

The media has reported the problem fairly well, albeit with a bit too much hype. The truth is that property values have declined in many areas because loans aren't being approved. Also, home values in many areas have NOT appreciated which is just as bad as devaluation in an inflationary market. I personally believe that foreclosures of subprime loans and unfounded ARMs isn't a bad thing as long as the LESSON IS LEARNED - "don't borrow (or lend) money if the borrower cannot afford the payments". The real problem is the secondary effect foreclosures have on neighborhood values (as reported in the story). Lastly, the media is missing one of the cornerstones of the problem which is mortgage-backed securities - fraudulent valuations of these instruments led to gross profiteering and ultimately contributed to origination of bad loans (note that many loan originators didn't care a whit about loan values except for how they could repackage them to sell as mortgage-backed securities). Mortgage backed securities should be outlawed (or at least deemed "junk") since there is no longer a relationship between bond values and loan/mortgage values.

Why is it that when a business bails out of a loan and cites it as a bad investment it's considered just business? But an individual bails on a home because the note is higher than the value of the home it's irresponsible. Man, the corps have you guys trained well.

Since when has "the American Dream" become equated with "owning your own home." Methinks some marketing guru in the housing industry appropropriated that concept to sell some suckers more houses. I guess it did the trick for awhile at least. From what I can remember about "the American dream", or at least the concept in civics class, it was that one can achieve his/her goals or station in life through hard work and determination (and maybe a little luck). And that folks aren't stuck where they start (social-class-wise) and are free to move up or down the social ladder through merit/hard-work or laziness, respectively.

all this boomtown excess could be sopped up by the feds through reparations to people that have legitimate grievance with the govt. I'm thinking Barrack becomes president, the fed "section 8's" to all those folks still waiting for someone to rebuild their place down in New Orleans. Also, we have about a million or so Iraqis that could use a place to live, thanks to our wonderful commander in chief.

.....people have to live somewhere, and true investors will buy, rent out and hold for the long term...as an Investment. Americans started to think homes shoud go up 10% per yr in value...LOL talk about unrealistic expectations....hang in there folks, and don't rely on our gov't for solutions....rely on yourself....the "every american deserves their own home" got us into this mess.....we just need to get back to 20 % dwn pmt....2 yrs at a job.....30 % ratio of monthly mortgage to monthly income ratios.