Right now the interest rates continue to be very low. THE GLOOM AND DOOM that the media has been talking about for 3 years has now come to pass. BUT FOR WHAT REASON? That Real Estate bubble that they predicted to BURST has now begun. But would it have if people didn't fear it coming. I had a banner year, and am fine with an adjustment in the market, but how many people believe the media played a huge part in this crisis?
2007-11-14 04:32:48 · 14 answers · asked by SONDRA 1 in Business & Finance ➔ Renting & Real Estate
I think the media is behind a lot of this stuff......gas prices being another.
2007-11-14 04:35:41 · answer #1 · answered by Anonymous · 2⤊ 3⤋
I blame the media for not paying enough attention. I don't believe that anyone has been talking doom and gloom for the last three years, and that has been a problem. Instead, everyone was talking about how the real estate market will always go up, and how interest rates are at historic lows so now is the time to buy. Only a few people were paying attention to exactly who was getting mortgages, for how much, and it what form. If people knew how risky these loans really were, they could have been stopped, or at least properly priced years ago. Then we wouldn't have banks with massive write-downs, and so forth. This crisis isn't overblown yet.
2007-11-14 12:45:16 · answer #2 · answered by greatrussian 1 · 1⤊ 0⤋
Excellent point. Just as the stock market is driven by human emotion, so is the real estate market. I guarantee that if CNN said "The economy is great, now is the time to buy" the real estate market would boom again. There is no logical reason that houses are sitting on the market for so long while people are trying so hard to get loans.
You CANNOT blame it all on subprime borrowers because by all acounts 75% to 90% of those loans are good. That stat comes from the doom and gloom stat that says anywhere from 10% to 25% will result in foreclosure. The media chooses to report the negative, but in actuality it's a positive. 90% of subprime loans will be paid on time? Even 75% is a large number of people that are now being locked out of the market. All that needs to happen if for people to get the "green light" to spend money again. The lenders will relax, the economy will recover.
2007-11-15 02:30:59 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Its is tru that the Banks are to blame for allowing just about anyone to get a loan. Howeve the media makes the Mountain out of a molehill and it keeps people scared of buying. Now is a great time to buy, the interest rates are good and there is alot of inventory. What more could a buyer want. The media keeps reporting crap like,
"Home Sales fall again, more news at 11:00pm!"
Then people run and think that its a national problem.
In los Angeles, the number of homes sold, fell, the prices, ...not so much. There is a big difference. People fear that they may overpay for a home. Before you can buy a home, the home has to be appraised. The lender will not approve a loan for more that what the home is worth.
Bottom line, ....
When the rates are good the prices a stagnant.
When the rates are high, prices are on the rise.
I
2007-11-14 13:45:43 · answer #4 · answered by thebigcheese1993 2 · 0⤊ 0⤋
It wasn't the media. The meltdown was well under way before the media ever picked up on it. Once the adjustable rate mortgages started to reset to higher payments, there was nothing that could be done. Nothing the media did or didn't do would have made any difference. In fact, it was probably a good thing that the media DID start discussing the economics of the housing market because there were a lot of people buying homes who didn't understand why prices could not continue to rise.
When a mortgage payment on an average home costs 80% of the average income in an area, there is no way in the world for that situation to continue. It is simply unaffordable and prices had to fall because incomes were not going to triple.
It came down to pure supply and demand. Homeowners had to get out of mortgages they could no longer afford, and there weren't enough people willing and/or able to buy them.
2007-11-14 12:42:25 · answer #5 · answered by likepepsi 7 · 2⤊ 1⤋
The media just reported on it. Too many young people were buying houses at the wrong time, on adjustable rate mortgages. They would pay on the property just long enough to utilize the benefits of that system, and then unloading the property at a markup. As market value fell, so many people were not able to keep up with the adjustable rates, and it was easier to let the bank forclose than go down with the ship.
2007-11-14 12:45:14 · answer #6 · answered by xooxcable 5 · 2⤊ 0⤋
No, they did not cause the meltdown, they were sounding the alarms for 3 years because it was an artificial market.
And it still is in a downturn, look at statistics issued by relators, real estate investors, etc. Look at the subprime lending market (where much of the chaos came from) and the lending practices employed by lenders.
So you personally had a good year, congrats. But many aren't and are dying on the vine so to speak.
There are 90 day inventories in many areas (mine included) and thats in November, which is crazy. We've gone up to as much as 120 day inventories here recently by some estimations.
Its not being caused by the media anymore than global warming is being caused by the media. They report events, they dont make events (typically).
2007-11-14 12:39:07 · answer #7 · answered by Phil M 7 · 1⤊ 1⤋
Consider yourself fortunate, but the media did not place the 14 for sale signs in my neighborhood. Prices climbed too high too fast, people were duped by teaser rates and interest only loans. The full blame should fall on the mortgage writing companies and their feeding frenzy of the last five years.
2007-11-14 12:39:20 · answer #8 · answered by World Peace Now 3 · 2⤊ 1⤋
the lending institutions did it to themselves by allowing too many risky, "get them into a house and get the money NOW" schemes to snowball out of control. alot of people are loosing their homes because of those schemes and yes, the media is standing there screaming at the top of their lungs "we told you so!!". when my wife and i bought our house 25 years ago, we dumped quite afew agents because they tried to get us into some of "those deals". we had a large dn payment and went traditional financing. it cost more but our behinds were covered.
2007-11-14 12:43:19 · answer #9 · answered by oldguy 6 · 1⤊ 0⤋
Flugger is correct ,and those people will be in dire straits when the interest rates start to climb. Can't blame every thing on the media............
2007-11-14 12:41:21 · answer #10 · answered by Anonymous · 0⤊ 1⤋
I don’t blame the media for causing anything, but I do blame them for blowing this situation way out of proportion.
2007-11-14 12:38:42 · answer #11 · answered by Anonymous · 1⤊ 1⤋