Those on the right gave Bush credit for the economy when it was doing well....care to give Bush credit now that the economy isn't so great?

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I've been informed....don't blame Bush, he's "not in control"
That must make him out of control

My mom's in real estate, she says three to five years. She says the way this stuff is going right now, you can expect prices to start plummeting within about six months, maybe even sooner.

But, so now, Paulson and the Feds are in there buying up "dubious mortgages", right? And they've got some plan in place, to refinance "individuals" through FHA. Which is definitely a good deal for homeowners, man, I'd jump on that one even I didn't need it, 'cause you can't beat those FHA interest rates anywhere - heck, I'd even borrow that money and go use it to make more money, at those rates you can't miss....

But yeah, Paulson's no dummy, he's a very smart man. He sees those dollar signs start moving, and he'll know which way the wind's blowing. Yeah, really, I've seen this guy in action, it's like, he's deceptively laid back, when he's just talking to you, but man, when he gets into something (mentally), he really digs in - so yeah, I mean, if you were going to pick a speculator to run the Treasury, Paulson would probably be one of your best choices - and maybe that's what Bushie wanted, who knows - maybe he was kinda "thinking ahead", thinking he might need someone who's "clever with money" before the end of his term....

Plummeting? Sheesh...How low can they go? A house down the road from mine has been sitting for 15 months; it's been marked down by $75,000. from it's original asking price and still no buys. I realize that the housing market was overpriced, but this is getting serious.

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I've been informed....don't blame Bush, he's "not in control"
That must make him out of control

Well it's still plummeting in the DC area, I can tell you. A few of my close friends are involved in the housing industry (one deals with mortgages, the other heads up a small housing construction company, and the last one works for a huge nationwide homebuilder). I wouldn't say people are panicking, per se, but it's not looking good for anyone on the selling side of the fence.

On the buying side however.. if you got the cash, go for it!

Let's see, a "bump" would be a five to ten percent drop - and that's kinda what we've seen "so far", right?

"Plummeting" would be, like, a fifty percent drop. Kinda like what we saw in 1994, here in the Los Angeles area, after the earthquake. I'll give you an example. The day before the earthquake, a particular house was listed for 265,000 dollars, and it actually had an offer on it, only the owners weren't at home and so the agent had to wait to present it. Well, the earthquake happened, and then no one was buying houses anymore, and 'course the buyers got in there and managed to find all kinds of "doubt" (when the reality, it later turned out, was that the house was entirely undamaged, it was in perfect condition) - anyway, so that house, ended up selling for 141,000 dollars about three months later. So that's fifty percent of the value in three months - that's "plummeting".

So, I mean, this is the kinda thing that might happen in New Orleans after Katrina or something, but in the case of a mortgage crisis, the main difference is that the development will be slower - in fact, it'll be deceptively slow. There'll be those who argue that the whole thing doesn't even exist, but meanwhile this little crisis is creeping up on them - I mean, think about it in terms of turning the temperature up on a frog very slowly - the frog won't notice, right? It'll just sit there until it explodes (I mean, it'll die first, but then it'll explode) -

And that's kinda what'll happen in a mortgage crisis too - and the most likely way that'll happen, is if the jobs numbers go south. 'Cause most people are barely making their mortgage payments as it is (you know, through timely re-financing and all that) - and if that option either disappers, or if their jobs disappear so they can't pay their mortgages anymore - well then, everyone's going to suffer -

And now that they've changed the bankruptcy laws, these poor guys are even going to have to pay off the bank, in some cases, even if they walk away from their houses. So.... yes, it's a very ugly situation. The effect on the banks is that it'll dry up their liquidity, which means they won't be making very many loans anymore, which means small business will suffer, and even "bridge loans" will be harder to get -

So yeah, I would say this is very serious. The feds recognize that, they've already taken steps to jump in, if and when it's needed. It won't be pretty, but I think we'll survive it. Unless, that is, we have to pay for another foreign war first....

Well by that definition of plummeting.. I don't think DC is quite to plummeting yet. I was being a teensy bit overdramatic. But the discrepancies between those who can afford houses versus those who can't is kind of scary.

But the issue is very serious. People are selling, not because they want to, but because they can't afford to do otherwise. And they're losing out.. they have to sell dirt cheap. On the other side, I have friends who are looking to buy. And with their salary and credit histories, you would think they are overqualified to purchase. But the mortgage companies or bank doesn't want to risk lending to them.