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Break it down: Why is the Real Estate Market Bad?
 
Gordon Corsie wrote a really good piece this morning breaking down "what happened" to the Real Estate Market.  To the seasoned professional, this analysis is not new.  But I think it's really important to remind everyone as to the "how's" and "why's" of our Market today. 
It's like this, when you know where the "monster" is, it's a lot less scary.
QUESTION: Why aren't homes selling like they did before? 
(from Gordon's post) BECAUSE:
Lenders loaned too much money to too many buyers who should never have been qualified to such a high level of purchase price.Those buyers who bought with zero down loans and whose "OPTION ARMS" (Negative amortizing loans) are adjusting upwards can not make the payments, and cannot refinance either and so are headed toward foreclosure.Because of #1 and #2 several major lenders are now out of business.The Media has loved to cover this, they love a good negative story.Buyers therefore are hesitant, why buy now when prices may keep falling!This slowdown is different than the ones we have experienced over the last 10 years. For example, the 1997 Russian economy slowdown...remember that one? Lasted 23-4 months; 2001 9/11...
These were slowdowns related to the stock market which affected buyers confidence but really did not have ... more

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