US Sub-Prime Crisis
I read the world news (BBC News International Version) and my former local (Orange County Register, Southern California) news pretty much on a daily basis. Every day I read the news I see a common theme, "US SUB-PRIME PROBLEMS", "US housing market crash", "Greenspan warns on credit crunch", "Fed warns of slowing US economy", "Carnage on Wall Street as loans go bad".
hits, losses, leaks, slowing, resigns, troubling, crash, warns, chaos, sours, bad, carnage, squeeze, dampen, crisis, devastating, problems, wrong, departed, hidden, concealed, exposed, wiped out, lay off, cutting, limiting, distressed, dramatic, dwarfed, strike, refusing, plummeted, undisclosed, dry up, turmoil, expensive, difficult, worries, harder, tightening, hurt, restraint, slumping, crunch, frozen, uncertainty, lack, terrifying, fallen, foreclosure, liabilites, cost, worst-case scenario, against, sensitive, fall, recession, inflation, fear, dropped, lost, difficult, lower, impaired, fallout, severe, underestimated, off-balance, written off, exposed, risky, force, dried up, debt, lack of certainty, lack of information, predatory, wrong, broke, dangerous, complex, worse, abusive, fraudulent, stress, falling, supposedly, failed, careful, gone, disaggregated, less, trouble, collecting, collateral, poorly-regulated, exaggerate, deterioration, correct, broken, damage, painful, repossess, defaults, flawed.
wow - I felt absolutely terrible after reading that. But I continue to read them articles every day.
I've never seen so many words to negatively describe something. And to think I found all of them in just a single article.
My first impression was I am so happy I am not in the States. I am so happy that I am not working in real estate in Southern California right now but in Tokyo. Then I started thinking.
I am all for freedom of speech, and writing what you think and feel or writing what sells. These kind of things sell newspapers but it certainly doesn't help consumer confidence. Nor does it help the image of my fellow clients and friends, the investment bankers, mortgage brokers, the lenders, the real estate brokers and realtors. It does not help the the builders of homes, the construction workers, the moving companies, the advertisers, or the re-modelers, the re-financers, the investors and bond holders, shareholders, buyers, sellers, or the dollar.
I understand the need to tell a story, the media assumes that as their responsibility, and we expect it from them. But does anyone else feel that the way they tell it is a little excessive? Sometimes I would like to read an article that shows some positive things. There must be something good coming out of this.
As for me, what I see is that there is a great market for rent on the horizon. If people can't afford to buy with the interest rates where they are or because the lenders have become stricter with their lending standards, then that leaves a lot of people that were once "homeowners"or potential future buyers as renters. I can only see the rent market grow.
What else I see is that if you have a lot of cash and do not need require financing for a home loan, over the next couple of years, prices will become much more affordable. Much more affordable than they were 2 years ago. An opportunity to get a property that isn't priced over what it's worth. The inflated prices in my hometown in Irvine was ridiculous; I told my parents to sell 2 years ago because I assumed the market was pretty much at it's peak. Their property tripled in selling price in 10 years. I believe in this next year or the year after, people will be able to get their houses without over-extending themselves. The median house prices in the OC have not been affordable to the median income folks for awhile now. That was never a great sign but I would love to see some real people, some real families, not speculators attain that "American Dream".
At the end of the day though, real estate has always been a solid investment. It obviously has it's ups and downs but historically, if you look at property it always comes back. It always goes back up.
** I assumed no one ever read my blog but since a client of mine told me he read it, I will start to take this more seriously. Thank you for the people that do read my blog.
- Jason, your native English speaking realtor in Tokyo