You’re right! Proves I should get more sleep. I didn’t notice the date; I just knew I hadn’t read it yet. Mahalo for the newest link.

My point is to identify the reason for the price increases and to point out that the current market is disconnected from the underlying state of the economy. All of which is true.

My concern is that the government stimulus is setting a trap for the uneducated.

I want readers to understand that Washington and Wall St. are distorting the market, and that readers use this knowledge to make an educated decesion.

Bye the way, All this crazyness that has happened in the last few years has taken everybody by storm. Three years ago some people did think a real estate crash was possible, but who knew that trillions of dollars were going to be thrown at the bust. Who expected the bail-outs, and the moratoriums, tax credits, Tarp, and Hamp, and loan modifications! The list goes on and on and on!

I had no idea what the impact and ramifications of all of this would be. I am learning on the job just like every one else.

Bottom line, the people in the market now are in a heavyly manipulated market, That is an undeniable fact.

Now ask yourself which direction will the market go once the stimulus is gone? And in that situation will you be trapped?

Please do! Given CR’s numbers on bubble-era MEW I’d be surprised if huge numbers of pre-bubble purchasers weren’t involved.

http://www.cnbc.com/id/33627573

~~ Breaking News ~~CNN/Money article entitled: “$8,000 Home Credit Still In Play”. And the subtitle is:
“Negotiations About Whether and How To Extend and Expand the Tax Credit For Homebuyers Are Moving Quickly. Here are the latest developments”.

And the link to the one-page article is:
http://money.cnn.com/2009/10/28/real_estate/homebuyer_credit/index.htm?postversion=2009102913

Greg in LA, the unemployment and the declines in real income have accumulated over the past 2-3 years. Real estate has accumulated large losses over that period as well. Down by ~40% in many places.

I’m thinking of calling my landlord asking him if he’s willing to reduce my rent to the interest only portion of his mortgage. He can bill me for the principal at the end of my lease at which point I squat and wait for cash for keys.

So, after another six years of interest only, the borrower now not only still has no equity, they owe 1/3 more on the loan than they did at the start. Nice!

Banks should just go into the rental business, they are just about already there.