09-12-2006, 10:00 AM
A quote from Aaron's post:
That is not what I'm saying. I'm saying
that it seems these "analysts" or "doomsayers" do not comprehend the human factor of any housing collapse.
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Aaron, I don't understand what you mean when you refer to the "human factor of any housing collapse"?
Personally, I think the probable upcoming housing and economic collapse will be because of rising interest rates, rising gas costs and too many folks who got adjustible rate mortgages.
Folks can only afford so much per month for their mortgage. Many of them bought with adjustable rate mortgages thinking (A) the rate will never go up that much or (B) they would switch to fixed rate mortgage later when they can afford it or ©when the value of their house increases enough that they can sell it for a profit. These folks can only afford a certain amount each month to pay the mortgage. When the interest rates rise, they can't afford it. When it takes an extra couple hundred dollars in increased gas costs to get to work each month, they can't afford it. When the price of their house doesn't rise and they have to keep making the payments until their savings run out, then they can't afford it. In all these cases, they will go bankrupt and the property will sell off for a lower price. If the events have happened to cause these folks to not be able to afford their houses, it will also cause other folks to not be able to afford the houses at the previous prices.
As far as house construction goes, I've chatted with a few contractor friends and they said the middle range construction jobs are few and far between. They are doing the real small and affordable units (1,000 square feet and less) and doing the really big expensive units (3 million dollars and above), but nothing in between.
Since most of my clients are in the "small and affordable" range, they are real happy to be able to find contractors interested in doing their projects now. A year or so ago, they couldn't find a contractor to even give them the time of day. So even though it seems to be an ill wind, it brings some good to at least a few folks.
A hui hou,
Cathy
That is not what I'm saying. I'm saying
that it seems these "analysts" or "doomsayers" do not comprehend the human factor of any housing collapse.
*************************
Aaron, I don't understand what you mean when you refer to the "human factor of any housing collapse"?
Personally, I think the probable upcoming housing and economic collapse will be because of rising interest rates, rising gas costs and too many folks who got adjustible rate mortgages.
Folks can only afford so much per month for their mortgage. Many of them bought with adjustable rate mortgages thinking (A) the rate will never go up that much or (B) they would switch to fixed rate mortgage later when they can afford it or ©when the value of their house increases enough that they can sell it for a profit. These folks can only afford a certain amount each month to pay the mortgage. When the interest rates rise, they can't afford it. When it takes an extra couple hundred dollars in increased gas costs to get to work each month, they can't afford it. When the price of their house doesn't rise and they have to keep making the payments until their savings run out, then they can't afford it. In all these cases, they will go bankrupt and the property will sell off for a lower price. If the events have happened to cause these folks to not be able to afford their houses, it will also cause other folks to not be able to afford the houses at the previous prices.
As far as house construction goes, I've chatted with a few contractor friends and they said the middle range construction jobs are few and far between. They are doing the real small and affordable units (1,000 square feet and less) and doing the really big expensive units (3 million dollars and above), but nothing in between.
Since most of my clients are in the "small and affordable" range, they are real happy to be able to find contractors interested in doing their projects now. A year or so ago, they couldn't find a contractor to even give them the time of day. So even though it seems to be an ill wind, it brings some good to at least a few folks.
A hui hou,
Cathy
Kurt Wilson