Saturday, October 15, 2005

It Was Just an Illusion On Paper

Mortgage rates are rising. Cheap mortgages are history. Thank goodness. Maybe sanity will finally outpace hubris.

Some choice quotes:
""The era of cheap mortgages finally ended yesterday. After fueling one of the most free-spending decades on record, the cheap, fixed-rate mortgage jumped virtually overnight from its historic 40-year lows to root permanently beyond the psychologically important 6 percent level yesterday, where economists believe it will keep rising dramatically."

""The new jump in mortgage costs, when combined with weaker incomes, the national deficit, skyrocketing energy prices and overpriced houses, are driving a stake into the housing bubble, analysts say."

""People had felt rich but they're seeing now that they aren't, it was just an illusion on paper,' Johnson said.""

""Peter Schiff (said), 'We've been living in this fantasy bubble for too long. People are going to find out their pensions and homes aren't worth what they thought.'""


Blogger marine_explorer said...

"People had felt rich but they're seeing now that they aren't, it was just an illusion on paper"

But, we're already rich in Marin, right?
I'm sure nobody spent here based on the "paper wealth" of their homes--or extracted equity for home improvement or new cars? Marin is definitely a cash-rich place, and can't possibly be affected by a real estate downturn.

Oct 15, 2005, 2:39:00 PM  
Blogger Marinite said...

I assume you are being sarcastic. But... Sure there are a lot of folks here who are rich and were so before the housing bubble. But I am also sure there are a lot here who are rich on paper and who have extracted tons of equity from their houses. I know quite a number of these sorts myself. It would be useful to know what percentage of Marinites have done this.

Oct 15, 2005, 3:33:00 PM  
Blogger marine_explorer said...

Sure there are a lot of folks here who are rich and were so before the housing bubble.

I'm sure there's plenty of old money here, such as the people I'm told who own a half-dozen homes in the county. Perhaps parking all that cash in real estate is common practice in their circles, but they'll only see a return if they sell. But, they're stubborn to price to market.

It may still be popular now to "invest" in real estate, but what happens when the old money changes their mind? I bet all the wannabes will follow suit. Could real estate investing in Marin ever become passé?

Oct 16, 2005, 9:30:00 PM  

Post a Comment

<< Home

Terms of Use: The purpose of the Marin Real Estate Bubble weblog (located at URL and henceforth referred to as “MREB” or “this site”) is to present and discuss information relating to real estate and the real estate industry in general (locally, state-wide, nationally, and internationally) as it pertains to the thesis that recent real estate related activity is properly characterized as a “speculative mania” or a “bubble”. MREB is a non-profit, community site that depends on community participation and feedback. While MREB administrators do strive to confirm all information presented here and qualify all doubtful items, the information presented at MREB is neither definitive nor should it be construed as professional advice. All information published on MREB is provided “as is” without warranty of any kind and the administrators of this site shall not be liable for any direct or indirect damages arising out of use of this site. This site is moderated by MREB administrators and the MREB administrators reserve the right to edit, remove, or refuse postings that are off-topic, defamatory, libelous, offensive, or otherwise deemed inappropriate by MREB administrators. You should consult a finance professional before making any decisions based on information found on this site.

The contributors to this site may, from time to time, hold short (or long) positions in mentioned and related companies.