Do you think because of the down turn in US housing market their will be a recession?

Question

With banks like The Northern Rock in the UK facing financial difficulties because they are feeling the force of the down turn in the US housing markets do you think their will be a recession on both sides of the pond? Or do you think things will pick up. And with the Northern Rock in trouble what will happen to those who have mortgages?

Answer 1

One business professor I respect said that recessions were caused by a "disparity in incomes between classes." His perspective was that a healthy economy is supported by good incomes at the lower and middle income levels. Worldwide, it seems to me that we have a wide distribution of incomes that continues to broaden.

I believe that the long-term prospects for US housing market will be up, however, as wealthy families and investors continue to buy second and third homes. For a while, the US economy was kept up through loans against equity in homes. Now, the US economy is kept a float through massive deficit spending in the military. Unfortunately, long-term, this spending is supporting wealthy investors in multinational corporations and depleting the wealth of most Americans and American military families.

Until we can replace the greed-centric power structure in our countries, most of us are bound to suffer through war, loss of civil liberties, ever increasing debt, and ultimately financial hardship.

Answer 2

Between this and the continued sky-high energy costs, there will sooner or later be a recession.

Millions in the US have adjustable rate mortgages which were approved at low rates. As those rates go up, many will not be able to afford the payments and will have to default. Whether that happens in the next month or the next year, I cannot predict. But it's only a matter of time, because interest rates can't stay low forever.

Answer 3

It's a sure bet!

The top of the real estate market was the summer of 2005. Most home values are now off by double digits!

I think we are only half way through this decline. 2010 should be the bottom.

Keep in mind, the average San Diego median home price is over $550,000. So, a 15% decline is a $82,500 loss! If you purchased last year, even with 20% down payment, your San Diego home could now be worth MUCH LESS than the amount of your mortgage!

With my take on the background of the current San Diego real estate market expressed, my opinion on the immediate future is that the San Diego real estate market is likely to accelerate down as the popular adjustable rate mortgages from the last few years come up for their first adjustment.

Yes, San Diego housing values could easily be down 25 to 30% from their summer 2005 values by the end of 2007.

For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:

http://www.brokerforyou.com/brokerforyou


Additional real estate info sites:

http://www.downtown-san-diego-real-estate.com/san-diego-real-estate-article-index.htm
http://www.brokerforyou.com
http://www.san-diego-for-sale-by-owner.com
http://www.la-jolla-ca-del-mar-san-diego-real-estate-encinitas-california.us
http://www.brokerforyou.com/blogger/index.htm
http://www.sandiegorealestatelibrary.info
http://www.sandiego-agent.com
http://san-diego-coastal-real-estate.blogspot.com
http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
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http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
http://www.brokerforyou.com/san-diego-real-estate-sales.html
http://www.poway-real-estate.info
http://www.del-mar-real-estate.info
http://www.la-jolla-real-estate.info
http://www.los-angeles-real-estate-brokers.com
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Answer 4

particular, this is and could be historic previous repeating its-self! They apparently did no longer learn from the 1st bypass around with Fannie Mae and Freddie Mac. back, they're loaning to those who won't be able to pay them back. nonetheless permitting applicants to lie on their mortgage purposes. the government is the undertaking! the comparable grasping, criminal remains working the prepare at Fannie Mae. If Obama replaced into particularly clever he might have at recent referred to as for an study into Fannie Mae and ASK Raines to resign, instead of annoying approximately GM. right this is a link from 2004 that shows even some time past then there have been issues and not something replaced into ever finished approximately it. Bush tried to get solutions yet replaced into stonewalled by way of democrats. a majority of those courses could be chalked as much as democrats, they love them and that they continually fail.

Answer 5

There will be lots of people on the street.