Well, of course, the housing market isn't one market. Very different in various locations. We saw heavy speculator activity in some markets: some folks didn't care what they paid because they could flip it for more--great while it lasted.
In some markets now, new home builders can't build a home and sell it for cost--speculators have dumped homes back on the market for less than the cost to build a new one.
Here in Dallas, it's much tamer. What is really suffering is the entry level and first time move up home (150,000 to 200,000 range). These builders had very aggressive lending programs and drew a lot of renters into homes. Adjustable rate mortage rates have increased, and some folks are getting bills they didn't expect or are having another kind of financial set back. We had the highest foreclosure rate since the late 80s here last month. But these weren't in the good locations (in general) or from folks that had built up much equity in the home. Many folks don't understand, with some of these mortages, one could have negative equity.
I've been saying for sometime things were overheated. We had land speculators paying prices a user couldn't afford. That usually doesn't last long. We had speculators here paying the same price for a piece of land that had utilities available as one that didn't--that usually doesn't work very long.
Anyway, I have a subdivision doing great, a piece of land I've been offered a large profit on and one place where existing lots just aren't selling (we own these free and clear). All depends on where you are, what the supply and demand is and how much equity one has in. The folks that were speculating in secondary locations without much equity seem to be the most vulnerable.
Best,
Dave
