No, it’s NOT subprime loans!
Sure, a small percentage of home buyers, with poor credit, were taken advantage of by unscrupulous loan representatives between 2000 and 2005. However, in the middle to upper end San Diego neighborhoods in which I work, this is not the problem.
The simple truth is that the problem was GREED!
Yes, greed and pure speculation were king in the San Diego real estate market heyday! One hundred percent loan purchases were ‘main-stream,’ while 110% and 120% refinancing were easy to obtain. The word was out:“Have good credit but do not make enough to purchase the larger property you desire? No problem! Just apply for a ‘stated’ income loan.” With these loans, the purchaser stated what their income was, and the lenders NEVER verified these statements.
A few weeks ago I heard a news story on the radio that a large percentage (more than half) were discovered to be fraudulent statements after the fact. Almost all new housing development put stringent rules into effect to try to cut down on speculators purchasing just to flip the homes once the project was sold out. Did this work? Not very well. Many San Diego real estate professionals speculate that real estate flippers purchased over 55% of downtown San Diego condominiums.
I feel sympathy for the few subprime buyers now facing the loss of their homes. But what about the speculators who tried to flip 'just' one more condo, or the homeowner who refinanced 110% of their home’s value in 2004 to take a Caribbean vacation and bought that new speedboat? How should one feel for the home buyers who knew they were in over their heads, but, also had an unshakable belief that San Diego home appreciation would not only make things work out, but also, make them tens of thousands of dollars on the sale of their home in just a few years time?[tags]San Diego,California,San Diego real estate,San Diego housing market,housing bust,housing bubble,California real estate,home values,housing appreciation[/tags] San Diego real estate agents
I agree with you and my only disagreement is that the greed is not confined to San Diego real estate but all the hyper-inflated real estate markets in the country. bail bonds Houston
I agree with you. San Diego homeowners seem to be in a deep financial mess. I can only hope that things get better from here.
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In the long term real estate always bounces back and people should take advantage of these slow periods if they really want to get a good return on their investments.
Isaac
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That my friend is genius