Industry News

Housing market emits hissing sound

Bubble contest: Zero-down buyers at risk of walking away
Published on Jan 26, 2004

Editor's note: The Washington, D.C.-based Center for Economic and Policy Research is sponsoring an essay contest on "Why there is no housing bubble." The winner will win $1,000. Send a copy of your entry to [email protected] for possible publication on Inman News. An opinion is just an opinion, but facts are facts, and no one can dispute the hard cold facts about the housing market. It's true low interest rates and capital gain limitations up to $500,000 for a couple and $250,000 for a single homeowner have fueled sales, causing investors to come out of the woodwork; however, many home buyers, in an effort to get into the market, have purchased properties with no money down, 100 percent financing. These interest-only notes will eventually balloon up, escalate payments beyond the capacity of the homeowner and guess what? No down...no risk! What do these buyers do? They walk! The bubble bursts, and the cycle of short sales and foreclosures begins. Many investors are finding that the ...

Comments