327% Foreclosure increase from 2007 in LA county

Can you say.....OUCH.....

This reminds me of 1995 and 1996 in the Palm Springs market.  I remember speaking to home owners that told me these incredible stories of homes that people walked away from in droves.  Now the problem may even be much worse, but that doesn't surprise me.

Let's be intellectually honest at this point.  Who's really to blame?  Is it really the lenders?  Is it really the borrowers?  Or is it a combination of many factors, which I tend to believe.  The problem is it didn't happen over night, and like we're seeing in the commodity market, the pressure to continually expand is always present in the capitalistic systems of economy.

The big debate now is do we bail these people out who made these decisions to buy homes in markets like LA county.  The easy way is to blame these buyer's, and while we sit in our 150k home in suburban Kansas, make those Los Angeles Californian buyers into evil greedy people.  The reality is if your living in Los Angeles in 2004, and your job is in Los Angeles, and your family lives in Los Angeles, not buying your home in Los Angeles seems like the most ridiculous idea.  The other problem is your being blasted by media, financial guru's, the government and our family that buying a home is paramount to the American dream.  Long term most of these sources of advice are correct, buying a home is not a bad LONG term investment.  The problem in California, Phoenix, Florida and other high speculative markets is that GREED does come into play.  But to blame the average homeowner who lives, works and plays in that community is ridiculous.  The real person to blame is the "SPECULATOR"!

Speculators are often you and me or friends or family.  They've been with us since the conception of this country and long before.  I wouldn't even say that "Speculators" are an actual class of people, rather a temporary state of psychosis that exists until severely beaten down.  In other words, Speculation is what eventually killed our market, and in addition the over construction of many of these markets.  The real evil doers in my mind are these "investment" companies that have been created to mine these speculators of most of their hard earned cash.  In other words in the name of education, they pitch incredible stories of riches that are attainable by anyone and in any market.  Now these vultures are being exposed by state regulatory and federal agencies, but wait long enough and there will be a whole new group preying on another industry.

One thing that makes me not worry at night is the following. "what goes up must come down", and "what comes down will go up", so patience everyone, usually you know your at the end of a down cycle when there is very little good news.  If you've paid attention to the Wall Street media, the talk is already becoming more positive in regards to our hitting the bottom in terms of real estate.  What the new media never covers is how many people are still making their mortgage payments and how many American's are still able to buy and sell houses.  Perhaps a little balance in the media in regards to this economy would be the real answer to our ailing spirit.