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THINK OF THE SO-CALLED “SUBPRIME MELTDOWN” AS A MARKET ADJUSTMENT. ASK THESE QUESTIONS AND GET SOME PERSPECTIVE ON THE CHANGES IN THE MORTGAGE AND REAL ESTATE MARKETS:
IS IT EVER A GOOD IDEA TO SPEND BEYOND ONE’S MEANS? Economic history has taught us that planning and moderation are best. Whether it’s an entire economy going through the Great Depression or an individual digging out from credit card debt, a measured approach is best. Riskier loans and ventures will now only be available for people with proven ability to handle them.
IS THE REAL ESTATE PARTY OVER? Of course not! If prices had continued escalating at astronomical rates, first-time homebuyers would have been shut out of the market. There can be no move-up buyers without the first-timers. From 1940-2000, home prices have appreciated and average of 6%. That includes good and bad years! So the only people disappointed are those trying to buy and sell within a small and particular market era because they don’t have time on their side.
IS ROME BURNING? No, but the dead wood is. Think of those controlled burns that the forest department orchestrates in order to clear out downed trees, make room for new growth and possibly avoid a larger more devastating blaze.
THE SUBPRIME SITUATION IS A RENAISSANCE, NOT AN APOCALYPSE. IT ALL DEPENDS ON HOW YOU LOOK AT IT AND HOW YOU PLAN.
CHECK OUT “PIGS, PROPERTY & PROPAGANDA—THE SPIN ON SUBPRIME.”
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