At Least 2 More Years

From a press release by Investment U (via Yahoo Business). As we all have expected, the prospects in housing are far from rosey.

'There's a growing consensus among economic and financial experts on the rate at which the real estate bubble will deflate. It will be a slow leak, they say. But the reality is far more chilling.

Last month, former Fed Chairman Alan Greenspan said, "The worst may well be over." But the "worst" is a frightening picture: Median prices for home sales have fallen sharply year-over-year, for two straight months, according to NATIONAL ASSOCIATION OF REALTORS.

"In addition to being the largest price drops in at least 38 years," The Wall Street Journal reported, "the back-to-back declines are the first time median home prices have fallen since 1995." And the decline is hardly over.'

And how about those exotic mortgages that everyone has been using the past 3 years? How are they going to affect things?

'Those who have interest-only, or "teaser-rate," mortgages could see their monthly payments more than double.

"Interest rates will rise on about $300 billion in adjustable-rate mortgages this year alone," he said. "That figure is projected to skyrocket to more than $1 trillion in each of the next two years."'

And, we have to ask: What states will be affected the worst?

'Arizona, Nevada, Florida and California will be hit particularly hard, he said, and homeowners in these states may not see a 5% decline, as experts predict, "but could fall two or three times that number."'

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