From the Fauquier Times-Democrat today.
A few years back I was at a photo shoot for a house featured in our real estate section. . . . I knew the real estate agent, and asked her what the house was listed for.
"$535,000," she said.
"That seems pricey," I replied.
"Maybe, but it should sell quickly."
The house was nice and all, but it didn't seem half-a-million-nice. I asked her how people could afford it.
"You don't have to put any money down," she said.
"How's that?"
"You get a first mortgage for 80 percent, and a second for the other 20 percent, and you can get in without putting up any money. My 22-year-old son just bought a house for $450,000 with no money down. It's an interest-only loan."
I left there knowing that the housing situation was in bad shape, only nobody seemed to notice at the time.
. . .
How will this bubble end? Badly, I'm afraid.
6 comments:
I bet that Agents "22 year old son" is very happy his Mommy strapped him with that horrific debt at such a young age. I hope he can live in it for the next 10 years....
excellent op-ed piece. it's so hard for me to understand how so many people abandoned common sense and jumped into the housing market with nary a fear that the lights would soon be shut off. i guess thats manias for ya.
Great commentary. Race horses, dotcom stocks -- let's not forget the comic book bubble of the early 90s. When it burst, it almost bankrupted several publishers.
This is a great blog, Harriet. Please keep it up.
I discovered this blog quite by accident a couple of weeks ago. Though I am not in the market to own a home, I found the information Harriett provides so astounding that I was compelled to share the blog with a few people back home. Believe me these friends are ever so grateful they do not live here.
I moved to Northern Virginia 2 years ago from the Atlanta metro area. An excellent career opportunity that can be leveraged in another few years when I head back south left me with little choice but to pack up and live here for about 5 years.
Before moving I researched the VA real estate market. I had been a home owner since 1978 and the thought of NOT owning a home seemed strange. I decided that I would never want to own a home here.
I feel sorry for those who have purchased in the last 5 years. And I like many wonder how intelligent people could have been so suckered. Apparently a similar market occurred here in the late 80s and early 90s, so it is even more difficult to imagine what got into people.
I have seen run-down townhouses here with asking prices of $400K + that in Atlanta would be found in the ghetto areas. And I am really surprised at the inferior materials on many of the new houses. I cannot imagine anyone buying a house here. Renting is a far more prudent thing to do if you plan to be here less than 7 years. As for me, when this job ends in 3 years I am headed to North Carolina.
kcwood: "And I am really surprised at the inferior materials on many of the new houses. I cannot imagine anyone buying a house here."
The overall poor construction is what convinced me not to buy here. The houses I've rented have been nothing but problems (for the landlords!). Construction here is definitely substandard, compared to what I've seen in other parts of the country.
Hopefully I did not imply that in Atlanta there are not houses made with shoddy materials. There are, but certainly not as many as I have seen here. This market is sad on so many levels.
One may be paid about 15% less in Atlanta, but in most ways the standard of living is far better than here. Beautiful houses at 50% or more less. There are some things I really miss.
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