Tuesday, September 11, 2007

LA Times Opinion Piece is Right On

LA Times piece by Peter Viles September 4, 2007 captured much of what I struggled to articulate earlier. (I know this is old news in blog land, but I just got around to reading the article).

"And yet now, just as the market is starting to cool and possibly provide buying opportunities, many of these folks -- especially those patiently waiting out the bubble -- find themselves crashing a pity party for the very buyers who priced them out of the market. They are furious that the government appears interested in supporting overextended borrowers and high prices, and they cite data to support their position. According to the California Assn. of Realtors, 41% of first-time California home buyers in 2006 put no money down. The median down payment for first-time buyers was just $10,000. No wonder LA Land commenter "jbunniii" writes: "No bailout is needed -- most of the borrowers in trouble didn't put any money down in the first place, so they will lose nothing by walking away."You don't have to accept all of these arguments."

"There is no doubt that some big lenders confused and, in some cases, defrauded borrowers, with the tacit approval of Congress, the Bush administration and regulators. It's also notable that "bubble bloggers" are not disinterested parties. Many are hoping that prices will fall so they can buy."

"But it's striking how little attention the views of the anti-bailout bears have gotten. Politicians, by rushing to the defense of recent home buyers, give the appearance of endorsing price stability at historically high levels. This makes little sense in Los Angeles, which ranks among the least affordable markets in America when housing prices are matched against income levels. Why should government favor today's owners over tomorrow's buyers?""

"I make nearly 100K and cannot afford a home in California," "JK" wrote on LA Land. "Using my tax dollars to help irresponsible people keep homes they can't afford, while at the same time keeping me out of the market, will be enough to send me over the edge.""


Giacomo said...

Right. And of course there's absolutely no way to sort out the "victims" from people who were just plain gambling.

I'm sure, too, that many were "gambling" with the purchase of a second home (figuring they'd have a vacation home (i.e., a horse property in the foothills, or a cabin at Tahoe) for 2 years before re-selling at a profit). Sorry!

mr big said...

This bailout talk is political mumbo jumbo.There will be no bailout for the morons.You will see people quit paying taxes if it happens. The market will correct and allow smart people to buy again.I am going to laugh in my ex girlfriends face when she loses her 400k condo in rocklin.I will not date a woman with excessive debt like this. She was smart enough to buy in august 05.With realtor fees already in the hole 80000.She would not listen to me at all about it as i know jack sh@t. I wonder how many divorces this will cause because it killed my relationship.I'm still here in az waiting.

buying time said...

Mr. Big sounds like you are better off without her. Financial stress is one of the leading causes of relationship(marriage) problems....so avoiding it a smart move!

Given what has been coming out on the MLS lately, you might be moving back sooner than later...been seeing some nice price drops lately.

Gwynster said...

Amen BT!

There are two things that will test any marriage - how you approach finanes and how you approach child-rearing.

I have a few male friends who are addicted to high-maintenance women. At least 1 is going to loose everything unless someone dies and gives them .25 mil withing the next couple of years.