It’s Not Just House Prices
The “bubble” started in South Florida, burst there first, but the banks have tied themselves in knots because of their greed. The Miami Herald has the grisly details: Homes more affordable; loans are not
To understand how the credit crisis is hitting home in South Florida, consider the plight of Teresa and Hoover Encalada. The couple found a two-bedroom condo they loved at the Plaza on Brickell. At $434,000, the price was right. Their credit was good.
Friday, they got the bad news: The lender wants 45 percent down on a five-year loan with an initial interest rate of 7.8 percent. Now Encalada, a 39-year-old administrative assistant, and her husband, an Ecuadorean banana grower, are waiting on a second bank offer requiring only 40 percent down before they proceed.
Existing home prices in South Florida have fallen 20 to 30 percent over the past year, putting once-unaffordable homes within the grasp of buyers — if only they could qualify for a loan at reasonable rates.
If you have the cash, the prices are in line again. If you need a mortgage, forget it. That “mortgage” offer isn’t even a good deal for a car loan.
2 comments
I veen searching for something I read years ago when the great ‘Internet Bubble’ burst and wreaked havoc. I finally found it. 🙂
It was an online interview (or ‘chat’ as they called it) on the US ABC blog in May 2000. It’s very interesting reading now, and should have been mandatory reading. 🙂
Blind Faith? Economist Warns of Speculative Bubble in Stock Market
Here’s a partial sample:
So… where has the ABC been the past few years? Not to mention the other MSM’s. 😉
No one in charge has the memory of a gerbil. Greenspan called it “irrational exuberance” and then did nothing about it.
When things start to go wrong, all you hear are the appeals for the “free market” as if that will solve the problem. When things are too late to save, the calls are for government intervention because the free market is kicking them into a bloody pulp.
This isn’t the first time this has happened, but the “powers that be” go into denial every time it starts to happen again. It’s as if they can’t see the pattern.