This is scary. I was only in elementary school in the 80's, so I don't remember what real estate was like, but I can imagine it was pretty bad since I've heard many times about the interest rates of the 80s being upwards in the high teens. We moved to Texas in 1984, and when I sold that house about 5 years ago, I noticed my parents had assumed the loan in order to buy the house. I guess assumptions were the main way to keep your rates low, though I can't believe they paid what they paid back then just to get into the house.
<!-- Image starts here -->
Nearly 4,000 homes are in foreclosure this month for Dallas, Tarrant, Denton, and Collin Counties, the 4 main counties in the North Dallas area. That's a 49% average increase over this time last year.
| |||||||||||||||||||||||||||
The "average" value of foreclosures is around $115,000. This is sad because what this means is that we got a lot of first time home owners into the market, probably on an ARM, and they thought they could own a home for the same price as they pay for an apartment, but still didn't understand the responsibilities of home ownership.
3 of my last 5 listing appiontments have been with people who can't afford to actually sell their homes.
Many of the other foreclosures are people over $500k. Yes, these are mostly the telecom executives who are living beyong their means, got an interest only ARM and now can't afford their payments...
That is scary! I think the market down here may be heading in that direction. This due to people jumping into the market late and not being able to sell their house. They are so leveraged out that one bad step and they are in serious trouble. Also, I think it could really be bad in the next few years due to the amount of Pay-option ARM's that were sold to the wrong people. It is a great product for certain people, but I don t think a majority of the individuals explain it well, as in the case of Ameriquest. We will see what happens but if something doesnt change then people could really be in for a suprise in the next few years. I see that you said that most people are living beyond their means. I think that might be viable in most foreclosure situations. Most people spend more than they earn. That is a scary thought of what the future might bring.
Take Care