Again, I never bought into the "existing equity", or the "I bought this home and already have 50K in equity!!" I guess my skepticism comes from my mother in law being an independent mortgage broker, who always has said this, "your house is only worth what someone wants to pay for it." Meaning, all these folks with these mortgages are in free fall, many now own a home that is not worth what they paid for it. It also means, that if homes continue in the downward spiral of foreclosure or short sell, the home a responsible owner has is not worth the value they think it is.
Do I think that the housing market will turn around quick? No. The homes many are in are not going to spiral back up for some time. Some folks have been in their homes a while, others wanted to flip it and are stuck, others just wanted a first home and can't afford it.
The mortgage industry and banks made big money of those fishy loans, made big money off of no regulation, and in the end stuck the bill with the taxpayer, us. We are the ones who now have to help homeowners, banks, etc., keep their homes. Banks don't want these homes, they are not going to get nothing for it, but you can't suck blood from a turnip when it is bone dry. That is the reality here.
My husband is totally against helping anyone with mortgage problems, me I am more sympathetic because things happen in one's life like losing a job, medical emergency, wages cut, etc. That is another reality that is happening around this country, but I do understand my husband's rage of bailing out homeowners who signed for these homes.
Everyone is hoping that the housing market will rebound to what it was 5 years ago, I say, no it will not happen. The housing market needs to come to reality of what their actual property is worth. It was overpriced in the beginning, now it is time for reality readjustment. Until this happens, homes are going to continue to plunge and those with money will make a killing out here in this market. Oh, that is another problem; many don't have the money to make a killing. Sigh.
Home prices plunged a record 18.2 percent in November from a year earlier as the country’s housing market remains in the throes of a deep recession, according to an index from Standard & Poor’s.
Prices in 11 metro areas fell at record rates from a year earlier. Prices in 14 cities fell more than 10 percent from November 2007.
Phoenix and Las Vegas were hardest hit in November, with prices down 3.4 percent and 3.3 percent, respectively. The two cities also have the worst returns over the one-year period, with prices falling 32.9 percent and 31.6 percent, respectively.