Wednesday, January 18, 2006
Bubble Update Dept.
This just in, from The San Francisco Chronicle:
Meanwhile, David Bernstein points to anecdotal evidence that the housing bubble is a credit bubble. "Unless maintenance men and cleaning ladies get paid much better in San Diego than anywhere else I've ever lived, $475K at $3,600 a month is a heck of lot to lend [to a 30-year-old maintenance worker and his 25-year-old wife], especially since they've shown no previous ability to save (no money down)."
The three major cities in the Bay Area, as well as eight other of the nation's largest real estate markets, face a 50 percent or greater chance of home price declines in the next two years, according to a study by a mortgage insurer.One of the other eight large markets is San Diego, but The Chronicle doesn't identify the others. The safest markets were Nashville, Cincinnati, Indianapolis, Memphis and Pittsburgh.
However, the quarterly report by Walnut Creek's PMI Mortgage Insurance Co. suggests a soft landing for the nation as a whole, rather than a sharp downturn.
Meanwhile, David Bernstein points to anecdotal evidence that the housing bubble is a credit bubble. "Unless maintenance men and cleaning ladies get paid much better in San Diego than anywhere else I've ever lived, $475K at $3,600 a month is a heck of lot to lend [to a 30-year-old maintenance worker and his 25-year-old wife], especially since they've shown no previous ability to save (no money down)."
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