The Next Market Crash?

Sorry that title is incorrect.... it should read "CRASHES!"

I've been saying this since the White House requested this back in January. I've seen articles in the Investors Bussiness Daily & the Wall Street Journal mention it, but no one else seems to be discussing it. WHY.....

 THE FORECLOSURE MORITORIUM

The Foreclosure Moritorium didn't end until March 2009. That means all foreclosures stopped dead in their tracks and no new foreclosures began. In my state (NY) it takes approximately 13 months to complete the process. That puts us into early/mid 2010 before all the back log hits the market. How can I put this.....

 2010 WILL BRING ANOTHER DROP IN PRICES

That's crash #1. This is simple supply and demand. When this wave of foreclosures hits the market, the market will drop.... again! Add to this the amount of debt the government has added to the deficiet, the amount of money that's been printed, the fact it's very likely Oil will no longer be sold in Dollars and guess what comes next? INFLATION, when it hits the fed will have no choice but to chase after it raising interest rates. The problem is, with all this run away government spending, by the time the inflation explodes, they won't be able to catch up to it. (we won't mention the fact that as rates rise, so will the deficiet) I'm realitively young (35) so I wasn't old enough to see interest rates at 18-20%, but my parents did. Well that will look like a discount when this inflation hits!

 Crash #2..... Why hasn't anyone else seen this, or if they have, why haven't they spoken about it? Over 90% of all loans today are government backed (FHA, FNMA & FREDDIE). If a buyer doesn't have 5%, 10%, 20%+ to put down on the purchase of a new home, what do they do? FHA! In their great wisdom, the men and women of Congress (who created most of this mess to begin with), decided that after the great real estate "bubble" went POP, we need real strict underwriting guidelines. "FHA..... increase the down payment requirement from 3% to 3.5% that should do it"

REALLY? 1/2 % that's going to decrease defaults, discourage buyers who can't truly afford a home from buying?

REALLY!

It's happening all over again, but the difference this time? You and I will all be on the hook becuase these loans are backed by taxpayers! You think the bank bailouts were expensive, wait until Crash #2.

Listen.... I'm in the real estate business, it's how I make my living. I want people to be able to buy a home.... NO I need people to be able to buy a home. But the reality is we need to get back to individual responsibility. Buyers need to be educated so they know owning a home is much different from renting one. There are more expesnses then just the mortgage payment. There's heating oil/gas, municipal water/sewer (if you're not on a well/septic), general upkeep (lawncare, snow removal, etc....), tax man is always asking for more not less, and of course when the toilet breaks, you pay a plumber, you don't call a landlord. But once educated, buyers must realize its up to them to be responsible. Don't over stretch to buy more house then you need. Live within your means.

So what does this all mean for buyers and sellers? It means I believe the market will continue to go lower at least into 2010. It means current interest rates aren't good, they're so low it's down right criminal. It means rates only have one way to go. Educate yourself and plan accordingly.

Just my thoughts for they day.... what are yours?