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Article source: http://www.revolutionizeyourlife.net/. Used with authors permission.
You hear it asked on the radio, in the newspapers and on TV.
Are we experiencing a value bubble in real estate and is it
ready to burst?
Do you have an answer for that question? Do you have aguess?
Yes, I know the so called experts are lining up on bothsides of the question. But what about you? Youre livingright in the middle of the action. You can judge whatshappening in your city - your neighborhood.
Are property owners going to be safe or sorry?
To help you form an opinion of the current state of thereal estate market we have created the...
GREAT REAL ESTATE BUBBLE QUIZ...
Everyone gets a passing grade and no homework is required,so put your thinking cap on and jump in...
True False Question
___ ___ Boston Real Estate values are up 90% in the last six years?
___ ___ San Francisco real estate values are up 90% in the last six years?
___ ___ Denver real estate values are up 90% in the last six years?
___ ___ The price of the average home in New York was $50,000 in 1975 and is $325,000 today..a gain of 550%?
___ ___ The average home price in Los Angeles was $50,000 in 1975. After a gain of 500% it sells today for $300,000?
___ ___ A 6,000 sq ft home in Greenwich, CT. worth $500,000 in 1987 sells today for $4-million?
___ ___ Fannie Mae, the largest buyer of mortgages in the US, issued a report warning that the probability of a housing bust has risen sharply in certain parts of the country.
I bet you scored 100% and earned your Doctorate ofBubblology.
OK, why is Fannie Mae so glum? They point to loose (Wewould say CRAZY) lending practices, like interest onlyloans and the increase in loan approvals that are notbacked by full documentation of the borrowers income andassets.
We imagine a borrowers conversation with a lender todaygoes something like this:
Borrower: Will you give me a quarter of a million
dollar mortgage loan.
Lender: Can you pay it back?
Borrower: Probably.
Lender: Loan approved!
Now you may be thinking that skyrocketing values arein an isolated number of big cities, right? Thatstrue, but those cities are our major commerce centers.When things go bad there the negative effect ripplesacross the country.
Heres the bottom line: Our economy is always blowingbubbles. Some burst and some dont.
Only time will tell about this one. Mark Walters is an investor-entrepreneur helping otherinvestors from his Web pages athttp://www.Lease-Option-Sub2.com
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