Foreclosure and Real Estate Blogs

The Anderson Center for Economic Research is predicting recession for 2008 in both California and the U.S.

” Much of the recent increase in consumer spending has been financed by households cashing out a portion of their home equity gains by refinancing their loans. But total home equity cashed out is estimated to decline by almost $60 billion in 2007.”

But that’s not all.

“We are projecting an additional decline of $130 billion in 2008. The resulting negative hit on consumer spending will be considerable, especially when it is coupled with the impact of higher energy costs on reducing spending.”

The full report should be a “must read” for anyone considering purchasing a home, either for use as a personal residence or as an investment property. The days of just buy it and you’ll make money are over, the fundamentals are critical now and you have to consider the very real prospect of losing value.

You can find the press release of the report here.

I’ve been looking at some properties and found a couple of bank owned houses on the same street, separated by one house in between them.  In itself, the proximity of the two is kind of alarming, but the bigger question is how many other homes in that same area will end up going through the same process.  I’ve already talked about home pricing and affordability, these samples are just kind of anecdotal references to a process repeating itself in many of the “boom” areas.

Property #1
3 bedroom 2.5 bath 2949 square feet sold on the open market for $809,000 in May, 2005
HSBC took the property back for $824,240 in August, 2007
Currently listed for sale at $759,900 with no takers yet.

Property #2
3 bedroom 2 bath 1836 square feet sold on the open market for $850,000 in January, 2006
Argent took the property back for $712,720 in August, 2007 (probable drop in opening bid)
Currently listed for sale at $725,000 with no takers yet.

Housing prices in many areas are now a moving target, and that target is on a downward trend.

Patrick.net has a strong argument about why there should not be a governmental bailout of the borrowers and subprime lenders who got those borrowers into their overpriced homes.

I’m not going to duplicate their thoughts, but visit the site, read the article AND contact your representatives and let them know how you feel on this issue.