Reading the news has become an exercise in how much bad news I can take before I feel the need to jump off a building or drink 100-proof alcohol until my tears become flammable.
Housing starts fell to record lows in November.
Builder confidence at all time lows.
Homes lose over $2 trillion in value.
Home foreclosures continue to surge.
It is enough to make you want to just cry. Or is it? The question I hear the most is, have we hit the bottom, yet?
I don’t think so. I believe we have a ways to go, for a few reasons. For starters, the government has been trying to stabilize the housing market for over a year now with absolutely no luck at all. Banks have been pushing “Loan modifications” hard this year for homeowners to reinvent themselves. The dirty little secret about loan modification packages is a good percentage of loans that have been modified go back into default within six months of the modification period ending. And toxic mortgages are nowhere near resolution, even as the nation at large begins to pay off personal debts.
Some experts say as many as half of the estimated 9 million toxic, or bad, mortgages could default in coming years, at enormous cost to the nation. With 12 million homeowners owing more on their mortgages than what the properties are worth, the problem will continue for some time. So, why doesn’t the government apply the same logic to the troubled homeowners that it did to the banks that have gotten hundreds of billions of dollars of taxpayer-backed funding in recent months?
The bottom line is this. There is no bottom line in sight. We, here at the FlipBoard, told our readership to look for a bottom during the first or second quarter of 2009. In light of new information, we might have to revise this estimate. Unfortunately, it will be later than sooner. What we all have to do is simply, pay down debt, save like crazy and be prepared to take advantage of fantastic deals when they become available. The money is made on the buy, Ladies and Gentlemen. Never forget that.
-Richard – www.theflipboard.com
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