| I had a closing on Friday with a gentleman who works as an analyst for one of the major lenders in the industry. He and his colleagues are predicting a housing crash in the next two to three years. He does not think it will be as bad as the crash of 2008, but a crash nonetheless. The term he used was a "reset". He was a very intelligent young man and I found his discussion on the housing market to be quite informative and eye opening. He spoke of "artificially" low rates, the high cost of homes, and several other factors that would play into there being a "reset". I have been saying it for the past two years that we are in for another crash, but I did not think it would happen so soon. If things keep going as they are, I see it happening in another five years. All the conditions are there . . . cashing out equity, high credit card debt, housing prices continuing to climb, and the return of the adjustable rate mortgage (ARM). We already know people are beginning to have difficulties paying their mortgages due to the increase of loan mods over the past two years. |
