Friday, August 15, 2008

Housing Bottom is here!

So says Jim Cramer. So says Alan Greenspan.

Except Jim Cramer said the bottom was here in late 2007. And he also gave a buy buy buy rating on Bear Sterns a few days before the company ceased to exist.

Alan Greenspan said the housing bottom had arrived in 2006. Hmm, how'd that work out for everyone?

I also wonder then if the housing bottom is here, why this situation is currently happening in the Atlanta area;

2425 Anderson Estates Ct - FORECLOSURE, For Sale $430,000

2430 Anderson Estates Ct - For Sale $440,000

2435 Anderson Estates Ct - FORECLOSURE, For Sale $425,000

2440 Anderson Estates Ct - For Sale at $385,000

2455 Anderson Estates Ct - For Sale at $425,000

Yeah, the bottom is here indeed. I'm sure 5 people will swoop in and buy all of these houses any day now. And this is just one of dozens and dozens of similar streets where literally 1/2 the homes on the street are either for sale, in foreclosure or in pre-foreclosure status.

These homes were built in 2006. So the home "owners" bought right at the peak. They listened to their real estate agent and the stories about real estate never going down in price. The stories about buy now or be priced out forever. The stories about throwing your money away on rent. The stories about the great tax benefits of owning (spend an extra $1 to save $0.25 in taxes). The stories about how with a little creative financing you could own a house 10 times your income. The stories about how with a little fibbing here and there (ie I make $290K a year as a clerk at JC Penny's but I can't seem to find my W2, so you'll just have to take my word for it) you could get any amount of financing you wanted since the banks are just giving money away. The stories about how owning a home is the American Dream. They believed all those stories and committed financial suicide.

Oh well, better luck next time.

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