A new report (survey) came out today that was going to state the obvious that almost 23 percent of the people have mortgages which are under water (meaning the people owe more mortgages than their houses are worth). This was going to happen sooner or later.
People bid too much on the houses in the hope that the house prices will go up and they will be able to cash out. This was done with all the advises coming from various so called experts that historically house prices have never come down. Well guess what it has now come down and people don’t have equity in their houses to cash out in case they are in dire needs of finances.
I still not get it. How could people have thought that the prices of houses will go up? Did they not realize that the income of people have to go up proportionately with the prices otherwise the buyers can not afford the houses. Well I guess it was a huge party based on as they say house of cards and now it has fallen down. Lets see how many people will just walk away from their under water houses and how much this foreclosure wave will affect the banks and other financial institutions. But it does not look pretty whatever the numbers game (the statistics) tell you otherwise. It is really a shame for these people but blaming others (banks, real estate agents, experts etc) for this mess does not completely absolve people of their share of unjustified frenzy that accompanied their buying without having the means to do it. I mean how much intelligence you need to have in order to know how much you can afford a certain thing.
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