Why did 9/11 effect the cost of homes the way it did?

Question

PLEASE HELP.. MY BOYFRIEND REFUSES TO SAY "MAYBE". There is no room for my opinions. NOT EVEN HYPOTHETICAL SCENARIOS ARE CONSIDERED. HE IS NEVER WRONG. I ALWAYS AM. Please, enlighten me. Is it possible that... the extreme increase in the cost of homes transpired primarily after the attack on America. Did the real estate market notice that, as a result of the current events, Americans had matured unexpectedly and began to prioritize things more. They "grabbed life by the horns", stopped procrastinating and started making their "dreams" a reality. They opened that business they always discussed, purchased their first home, they settled down and some even got married. As a result, houses went up. Many purch hastily w/no money down under that adjustable loan that everyone was getting and NOW they are all losing their homes because their rates have increased. HOW WRONG AM I ? :

Answer 1

If I was your boyfriend, I would slap you for thinking you're right.

9/11 caused a huge drop in the stock market and the Fed Reserve felt it was necessary to recover by way of dropping the target interest rate. As a result, bonds outperformed stocks for a couple of years but more importantly, set the stage for a drastic economic recovery aided by cheap availability of money at the bank since interest rates were so low.

Lots of folks bought homes for both residential and investment purposes. More buying means higher prices.

I don't think your point of view's got any validity so please continue just listening to what he says and don't cause yourself any harm by more thinking.

Answer 2

I will go with "maybe", but only on a very weak basis. You seem to be of the mindset that the emotional effects of 9/11 is what caused Americans to become embroiled in this current subprime and foreclosure fiasco. I do not agree with that. However, as a direct result of 9/11, interest rates lowered (understandably, because the economy had taken a serious hit and needed help). Those lowered interest rates, combined with some wizardry on the part of Wall Street MBA's, provided us loans to marginal credit borrowers at a high LTV rate.

It was not the emotional effect of 9/11 which did this to us. Just coincidental with low interest and Enron like accounting and math on Wall Street.

Answer 3

You are totally wrong, sorry.
The lending and borrowing of money caused it originally. Basically lying on credit applications and not paying the banks back drove them to not lend people money for homes.
Steeply rising house values in the United States tempted new buyers to borrow beyond their means, and existing owners to borrow money by re-financing their existing mortgages, using as collateral the increased value of their real estate. In the case of loans made to marginal credit-worthy customers, commonly known as subprime loans, the lenders tended to "look the other way". Then prices began to turn around.

So the subprime mortgage financial crisis was born, and caused a sharp rise in home foreclosures. This started in the United States during the Fall of 2006 and had become a global financial crisis within a year. Many factors created it, but the most immediate causes were a rising interest rate environment which caused people with adjustable rate mortgages to see significant increases in their loan payments amid declining property values. This left many borrowers unable or unwilling to meet their financial commitments, and many lenders without a means to recoup their losses.
http://en.wikipedia.org/wiki/2007_Subprime_mortgage_financial_crisis

Answer 4

It wasn't 9-11.

We were in the beginnings of a massive recession that started in 2000 with the tech burst.

9-11 was just a gift to the government to divert us from reality. Do you have any idea how many formerly high paid tech workers that lost their jobs in 2000/2001 still do not have comparable jobs back?

The government and the banks conspired to make money easy so that the economy would keep on ticking.

They can't conspire much longer. Unless of course we have another terrorist attack on US soil to distract us from reality.

Answer 5

Hi. Being right isn't as important as NOT bring burdened with OCB, obsessive compulsive behaviour.

As for your question, yes, I agree with frankie PLUS....

The media told America prices are to go up because of 9/11. The media in this country is very one sided-they are socialists, just like the liberals. Boy, I'd better stay away from politics.

Please remember, the media tells us all what to do, especially the politicians, so just don't worry about being right or wrong. Be happy you are in a country where you are allowed to be right or wrong and you do NOT have OCD. Take care, God bless and Merry Christmas.
Jim

Answer 6

I don't think what happened with the home prices after 9/11 are relevant anymore.

What is relevant, is why you are choosing to stay with a man that is verbally abusive...you can't possibly be that desperate???