The NAR hype has already started in preparation for the Spring home buying season. If anyone is thinking of buying - BEWARE!!

Prices are going to take another leg down in 2010 in most areas and this latest batch of knife catchers who are rushing to buy - are just that - naive knife catchers.

What’s the truth? Unemployment remaing at 10% to 11% (government fake numbers) and 15% to 18% (true numbers). Stagnant incomes. Higher taxes on the way. 3 million homes STILL unsold. Banks still hiding their foreclosures and trying to feed them into the pipeline slowly in order to the con “wanna be” buyers that there is not a glut of unsold foreclosures. However, the big gorilla is ALT-A.

Big interest rates on the horizon in 2010 and 2011 for Alt-A mortgage holders. Many of these borrowers bought several years ago AT THE PEAK. It’s been nice living in a $700 to $1 million property (which have slowly been losing value) because the interest rates were LOW. So….Now the HIGH interest rates will kick in.

That means those who got big loans at very low interest rates for several years (ALT-A borrowers mostly had/have good credit) will now pay VERY HIGH interest rates on a $1 million/property loan which is now worth $700,000 (or less). A LOT of those borrowers are going to default. That means those $1 million properties are now going to hit the market at $700,000. That in turn means the CURRENT properties selling at $700,000 and going to drop 20% to 30% at least.

Back to square one. When employment gets better ( a LOT better) it might signal it’s time to buy. Until then stay out of the property market.

- fiftyfirststate

Related Posts:

• “Eurozone Unemployment At Record Highs; Private Sector Lending Drops First Time Ever”
• More homeowners will have negative equity (owes more on the home than it is worth)
• Foreclosures grind on as lenders fail to modify loans
• A former boss is declaring personal bankruptcy, then the business.
• Anger about who and what caused this mess.

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