Friday, August 10, 2007

Market Woes

Wow, wow, wow. This has really come up sooner than I expected. The markets are all over the place today amidst serious concerns over the housing market and credit conditions. It seems that investors, banks, and practically everyone else have finally reacted to what I've considered outrageous behavior on the part of consumers and home buyers. Specifically, overspending, and out-of-this-world expectations. Now, some mortgage lender is in risk or bankrupt, and everyone's panicking.

CNN and CBC both have long articles on today's happenings, which I will post below. One really great paragraph I noted:

"In the United States, years of easy lending created huge numbers of shaky mortgages, many of them with teaser interest rates that are now about to reset, leaving homeowners with new, higher monthly payments they may not be able to meet."

That's what I've been saying for a while now, and worrying about it happening to me if I bought beyond my means.

Admittedly, I am not the wisest person with my money, and spend it on many things which are not really necessary. Guess it's part of living the big west coast lifestyle. However, when it comes to bigger issues like buying houses, I've tried to research things and make the right decision based on my own financial situation and the market, not just on what everyone else is doing or saying.

That resulted in us turning down a deal we made on a condo a few months ago. It might have worked out, but it would have been shaky, and by the looks of things, I'm happy to be on solid ground and renting.

So what does this mean for the future? Lenders tightening up their lending policies could mean less people affording housing. Buyers might simply take a second thought about buying which is what I'm thinking right now. That in itself will drop demand and possibly prices.

And don't even get me started on the fatted calf which is better known as the condo market. You can't drive anywhere without seeing some huge condo complex with a designer name going up faster than Lego™.

Sure is interesting, whatever the case! Here are the news articles:

References

CNN: Fed pumps in $38B as markets slide
CBC: Stock markets volatile as central banks try to calm investors
CNN Money: Mortgage meltdown
The Atavist: Is it time to panic and kiss your behind goodbye?

This one just sent to me by Natasha discusses what a subprime mortgage is, and the differences in mortgages in the USA and Canada:

CNN: The U.S. subprime mortgage meltdown... Will it spread to Canada?

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