This is so cool.

Excellent job guys, as usual. Keep up the great work!

I live in a neighborhood that was dodging bullets until recently, now we have two homes in a 4 block area in foreclousure and three homes that are trying to sell before they enter foreclousure.

That is 5 homes in crisis out 25 in my neighborhood. Sadly, WE are not in the worst shape as a neighborhood compared to surrounding ones. One neighborhood I drive through daily appears to be in full sale mode - 8 homes in a row for sale on one run.

I don’t see this getting better anytime soon.

The assumption that a decline in home prices is a great thing for the many people who have been priced out of the opportunity for home ownership. For the last 10 years prices have gone crazy and getting them back to be affordable by average people is a good thing for many of us!

The main problem in housing is restrictive zoning that puts an artificial limit on supply and that makes people bid up prices for the limited supply of homes.

Home prices will continue to fall, until 2/3 of the people can afford a home. I’m not talking about people with poor credit,just people that pay there bills. that do not have the income to support a home loan at the current prices

I agree with Drew Horn above. I think here in Boston the prices are still too high as compared to incomes and rents. I don’t really see a crisis here.

I would love to hear your program address the lack of education re: money management that is rampant among Americans -especially young Americans. They treat their available “credit” like disposable income. Living far beyond their means. Shouldn’t real “home economics” be taught to our school-age children? Not the “home economics” of my highschool days, which was only for girls (unless your parents raised a stink about it) and only included sewing clothing we never wore, cooking (& eating) macaroni & cheese, etc. Why don’t our schools teach the basics of running a home? Balancing checkbooks? Proper use of credit cards? The mechanics of establishing & maintaining good credit? Etc?

Is this still part the Bush economic miracle…..?

My house has dropped by $130,000 in two years.

I bought it when the market was high, dumb, but my condo was sold at a high price as well.

I have lost all my equity that I had from the condo which was bought 10 years ago for cash.

I am now sitting in a house that I have over paid for which was sold by a real estate agent who was kind of shady. Message to you real estate agents, you are all crooks in my book and the state should come down on you people like a ton of bricks, this is an area that needs a lot of regulation and they need to be held accountable for all the BS they put out. This goes to the sellers who lie as well. Also the some of the lawyers are pretty bad as well.

There were problems with this house that the inspector missed, and the sellers lied about. In short they committed fraud. My only recourse was to spend huge amounts of money trying to sue everyone.
My real estate agent was more interested in making her commission than in dealing with my concerns. I was a deer in the head lights.

I made mistakes that I am owning up to, I will never use any person recommended by the real estate agent again.
Any real estate agent who says they can’t wait a day or a few hours for me to get my lawyer will be shown the door. If every other sentence out of there mouths is “you should put your condo on the market even if you can’t find your hose yet, no problems” I will show you the door.

The issue for me is that the business is not regulated at all. The housing inspectors are in with the agents, everyone wants to make a buck from the sellers and buyers.

It was all about them.

In my case I am stuck with a house that is now worth less than the small two bedroom 850 square foot condo I sold.

I am sitting on a cash cow, I wont go under as all the equity went into this dump and the mortgage is low.

However I wont be able to sell this place for years to come and doing anything, like updating the kitchen is not going to happen.

In short I am screwed.

This show, as well as most of the coverage of the bubble bursting, was pretty appalling. I lost count of the number of times that falling prices for housing were described as bad news, disaster, a crisis, etc. Housing is one of life’s necessities. Cheaper prices for housing are good.
the tipoff for me came about two-thirds through the show. A caller asked about the people who used to live in foreclosed houses. The lack of concern on the part of the commentators was palpable. They couldn’t wait to get back to the problems of people who couldn’t get the full three and a half million for their inherited brownstone.
Is this the “public” that NPR thinks it represents? Can we look forward to shows about how you can’t find good domestic help nowadays?
This country once had a goal of decent affordable housing for everyone. That goal has been replaced by the assumption that everyone who owns property is entitled to a good return on invested captital, even if it means that decent housing is chronically unaffordable, or sits vacant.
I thinks we should rethink those priorities.

The man who was angry because his house dropped in value (he bought it for under 200,000): I didn’t understand his situation. He bought it for under 200,000 and now is worried that he will have to sell for less? Or did he borrow against the home for something (like his wife’s school) and now cannot sell the house for what he bought it for? It was confusing.

I didn’t understand who he is mad at or how flippers and bad borrowers hurt him. If he bought for under 200,000 that seems like a reasonable price for a house in a regular market.

I’ve rented the same apt in Brooklyn for 10 years, and have dreamed of the day that I could build my nest-egg on the same block. I’ve just finished my college degree, the Brooklyn market is softening, and sadly my father passed away - but left me a down payment. I guess timing really is everything- all within months. I’m just not sure if I should buy now or wait a bit. I looked at ten condos/coops/brownstones on Sunday - there is so much property available in my neighborhood - I never dreamed I would have so much to choose from. I’m also tempted to go for a foreclosure - but that makes me nervous.

Mr.Gardner,
The problem as I see it is we live in a backwards country.
There are no regulations for real estate agents. Not any with any teeth. Sellers can off load lemon houses with more ease than they can a car!

I fell for it myself, I was trying to move up the housing latter from small condo to small house.

I got burned. I agree that houses should be a place to live and the investment should pay off in years, say 10 or more.

What’s happening now is the worse thing to housing since the Great Depression. This is not a joke. NPR tries as this show was to show some side to this.

You want a real awakening go to Cleveland where 40% of the public school children are now homeless due to this crisis. Whole neighborhoods are going under. I will repeat, 40% of the public school kids are homeless.

That’s Great Depression statistics if you ask me.
I think what is needed is a prudent ethic of borrowing and good affordable housing, both rental and buying stock. Look a Germany, a lot of people rent most of their lives, getting into debt is frowned upon.

We could use a little of that here.

Last weekend CNN repeatedly showed an investigative piece about a woman-librarian with a $50,000 a year income. She bought a house for $560,000 with no means to ever pay for it. She has not made a mortgage payment in a year and is fighting foreclosure with the help of an attorney. CNN investigated why lenders gave her two loans and broker sold her those loans given her modest means. One thing they forget to ask was why she bought it. She knew the house cost 11 times her annual income. Obviously, she speculated on rapid house appreciation. I don’t see any other exit strategy. No way she could pay the mortgages.

What’s disturbing is the apparent public opinion, NPR and Congress all seem to be on the side of people like that. But what is she really losing in the end? She put little or nothing in. Small or no down payment, small or no monthly payments. I say she is the sophisticated concumer out there. I, with all my law degrees from two different countries, did not even think that I could get a nice house with practically no payments. Pure betting. Only in America.

I am one citizen who is not on the side of this woman or anyone like this. This is fraud period.

The formula to buy any kind of property is 3 times your salary. Which means this librarian should not have received a loan for more than $150,00.

The librarian was acting out of greed, she saw an opportunity to live beyond her means. The bank should have told her sorry but with this kind of income you can barley afford the down payment.

Let’s do the math for a normal purchase of this house.
It is priced at $560,000. If you have to put down 20% which is a standard amount for any house she would have had to put up $112,000.

OK lets do 15% which brings you an $84,000 down payment. Now you add legal fees and taxes and the amount of this sale will go up before the mortgage is even added to the cost.

Now remember if she only has income of $50,000 before deductions.

The difference after a 20% down payment would be $448,000. So lets say she was able to get a 30 year mortgage on this amount at 6.5% interest. That’s about $2500 per month which is $30,000 per year.

At $50,000 per year the numbers don’t add up.

Bottom line is the system failed, it failed because what used to be a sound banking transaction has been turned into a kind of ponzi scam.

As my husband and I search for our first home, I’m extremely disheartened by much of what’s posted here- and yet I know it absolutely reflects the current state of the real estate market. Many seem to share the perception that I’m lucky to be a buyer, not a seller. Not so, I say!
Between the two of us, my husband and I earn roughly $110,000 (and just for the record, we’ve not considered anything above the $330,000 range), but we’re having a hard time finding homes that are NOT up for foreclosure. Buying a foreclosed home is morally objectionable, so after six months, we’ve put a paltry two offers down, one of which was rejected, the other is pending.
To all those affected by the implosion, please know not everyone wishes to partake in opportunism…Jen, age 31 from MA

A financial advisor on NPR said “homes aren’t ATM machines” and I couldn’t agree more. Homes are there to provide shelter, but a lot of opportunists out there have caused this to happen. In the 90’s it was buying tech stocks and in the late 2000’s I imagine it’s going to be energy. Most people want to find some get rich scheme.
Secondly - it makes me almost sick to my stomach when so many are crying about global warming yet I see land being plowed up everywhere in the midwest to make room for more housing developments. Aren’t there enough houses already for the number of people that live in this country? Money isn’t evil, but it seems greed is.

> Money isn’t evil, but it seems greed is.

Well, that’s what the “good book” says, anyhow:

1 Timothy 6:10
http://en.wikisource.org/wiki/Bible_(King_James)/1_Timothy#6

But in the world of Ayn Rand and Wall Street, “Greed is good.”

Most of the people who bought mortgages beyond their means bear some responsibility, but there’s little question that they were targeted, lied to, and sold down the river by indifferent, unregulated and greedy salesmen. “Oh, when the interest rates balloon, you just refinance to make the payments.” “You can afford this because its value keeps appreciating” or some BS like that.

Maybe so, but a subprime borrower was the one who stood to make the most money if the market kept going up because, by definition, it was all leverage, somebody else’s money they were playing with. When thing are not so good they are the ones who stand to lose the least for the same reason.

From the market perspective, what is the point of trying to keep them in those unaffordable to them homes? All their disposable income is going to go to pay housing costs, so they can’t spend money into the economy, hence consumer spending is low. Meanwhile the houses will be artifically kept off the market to preserve the current price levels (also artifically), which reduces the volume of market activity, which is exactly what the market needs right now. People need to be able to go back to work in the housing sector. Market does not care whether a house will sell at $500 K or $350K. Market needs volume. Hence, the prices need to fall. But then, I grew up in the former USSR and perhaps don’t fully understand the way “free market” is supposed work. And where did all those world famous “rugged individualists” go? All I hear and see around is victims. If this continues, Russia, China and India will eat the US for breakfast.

Are people ready for a huge recession or we might be heading for a depression.

In today’s New York Times (8/7/08) this was the headline
“Housing Lenders Fear Bigger Wave of Loan Defaults”
The so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier.

This is only the beginning. This is what 30 years of Republican deregulation of all the financial markets has brought us, to our knees.

Se you on the bread line, brother can you spare me $10 for a cup of latte?

Great job! I love the show.

Bob Gardner, BLESS YOU!

I downloaded the podcast of this show and listened minute after minute as the host’s panic at the declining home values rose and rose, and I was disgusted. I thought, I have got to get to a computer to express my outrage. (Of course, right?) But thank goodness someone else was already there to represent.

All this talk about recovering declining home values seems to miss the point - for a while, homes were OVERVALUED. To hope for those go go days of high value homes is to hope to exclude a large chunk of the population from ever being able to afford a home. A one BR condo in many cities averages something like $200-$300 K at a MINIMUM. Who but the wealthy can afford this? If I want my home to increase and increase in value, then I am hoping to be able to exclude people like me from ever owning a home again.

Real Estate agents are not responsible for the condition of homes. Sue your inspector.