>>>A bit of news about foreclosures in the San Francisco Bay Area: “Foreclosures are up 200% this month in the San Francisco Bay Area (November) compared to last year at this time. This is normal”!
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>>>Normal?
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>>My personal opinion is that it's going to get worse before it gets better. There are an awful lot of 5 year ARMs comming up for renewal at significantly higher rates.
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>I agree!
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>A report I read the other day was talking about the percentage of adjustable mortgage loans created in the San Francisco Bay Area and the impact of a 1% interest hike. The article stated that 80% of new home loans were adjustable rate, and expected many to go into foreclosure should interest rates climb to the 1% mark.
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>Recently I was talking to a man about my age who has a daughter. The daughter is married and she and her husband just bought a house in Livermore. The man told me that they placed $100,000 down, for a $900,000 home. The monthly payments are $6000, and on top of that the property tax is $10,000. He did not mention homeowner’s insurance or possible fees. One hiccup and they loose the house. This story is not unusual for our area.
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>Now with Clinton we had the .COM Bomb. With Bush we could have much worse. Our economy is based upon smiles and a house of cards. The reality is not enjoyable to consider.


You are so right. Even a relatively minor downturn in the real estate market will have a devastating impact on the many people who are overextended in real estate. They assume appreciation in the value of their home(s) will insulate them from anything. Not so. Over time real estate is about the best investment around but it is not impervious to ups and downs. Markets like yours are so through the roof that some sort of correction is inevitable. There's going to be a lot of bloodletting before it's over.