3. What are the causes of the housing
bubble?
Walter Molony, spokesman for NAR, added
while there has been "an explosion in first
time homebuyers using no-down payment
loans" or other exotic mortgage products,
he didn't think there was necessarily a
direct correlation between the availability
of flexible home financing products and
the housing spike.
October 21, 2005
4. Should I continue to buy?
"Just when you think sales activity is
ready to settle into a more sustainable
pace, the housing market continues to
surprise.” David Lereah- NAR’s chief
economist
“This performance underscores the value
of housing as an investment and the
importance of homeownership in fulfilling
the American dream”
July 25, 2005
5. What do government officials think?
Federal Reserve Chairman Alan
Greenspan, who does not believe there is
a bubble in the national housing market,
warned Congress in testimony last week
that there could soon be declines in prices
at least some of the markets that have
seen home prices soar
July 25, 2005
6. In 2005, what do experts predict?
Ellen Bitton, president and chief executive of
Park Avenue Mortgage Group, said the
market is more likely to undergo stabilization
rather than any major decrease in valuation.
She estimated that housing prices would
return to a more stable 3 to 5 percent growth
rate once it returns to a buyers market.
October 21, 2005
7. In 2006, what do experts predict?
Prices will flatten in most ex-boomtowns this year, and
next year will be worse, says David Stiff, Fiserv's chief
economist. "A lot of markets--particularly those where
prices have increased dramatically compared with
income--will see drops by late 2007."
That doesn't mean, however, that real estate is about
to crash across the U.S. …"There are sizable parts of
the nation's housing market that will be just fine," says
Economy.com’s Marc Zandi
May 22, 2006
8. Is the housing bubble really that
bad?
David Seiders, chief economist for the National
Association of Home Builders, said that in light of
those concerns and the increase supply of homes on
the market, the slowdown in building is a good thing
for the market.
April 18, 2006
A housing-price drop would not be bad for everyone.
In fact, many canny real-estate investors have been
hoping for just such a hit… Falling markets can even
sometimes have a positive effect on how much
landlords can charge for rents by increasing the
demand for rental units
January 22, 2006
9. Should I worry?
Take a deep breath. We're not forecasting a
nationwide housing collapse. For one thing,
the vast expanse of America between the
coasts was never touched by real estate
mania and is in no danger of a meltdown.
May 5, 2006
New York, Citigroup senior economist Steven
Wieting said that concerns about a recession
due to softness in the housing market are
overdone.
November 27, 2006
11. What exactly happened?
Feb 7, 2007: HSBC is the first major bank to make an announcement about
increasing losses of subprime mortgages.
April 2, 2007: New Century Financial (one of the nation’s largest subprime mortgage
lenders) files for bankruptcy.
June 2007: Two hedge funds run by Bear Stearns have increasing losses. This is when
Merrill Lynch, JPMorgan Chase, Citigroup, and Goldman Sachs fear trouble.
September 18, 2007: The Federal Reserve starts cutting interest rates and loaning
money directly to Wall Street Firms.
July 11, 2008: The FDIC takes over IndyMac and warns that more bank failures lay
ahead.
March 16, 2008: JPMorgan Chase and Co acquires Bear Stearns.
September 6, 2008: Paulson announces a takeover of Fannie Mae and Freddie Mac
September 15, 2008: Bank of America takes over Merrill Lynch. Lehman Brothers files
for bankruptcy
12. How can I protect myself?
More banks are in trouble according to the FDIC.
Is your bank next on the list? Here's what to look
for.
1. Get the numbers
2. Get the ranking
3. Know the signs
4. Don’t panic
August 27, 2008
15. What is the government doing to
help?
By the end of the weekend, the Federal Reserve had
stepped in to try to calm the markets by announcing
plans to loosen its lending restrictions on the banking
industry.
This month, the U.S. government took over
mortgage finance companies Fannie Mae and Freddie
Mac. That was Washington's most dramatic attempt
yet to shore up the nation's faltering housing
market, which is suffering from record foreclosures
and falling prices. That plan calls for the government
to run Fannie and Freddie until they are on stronger
footing
September 15, 2008
16. Can I easily understand what is
happening?
World-wide repercussions:
Stocks rallied around the world as details of
the rescue plan emerged with New York's
benchmark Dow gaining 7.3 percent since
late Thursday, its biggest two-session gain
since October 2002. London's FTSE 100
jumped 8.8 percent, Shanghai closed up a
record-breaking 9.5 percent and Hong Kong
gained 9 percent as investor confidence
returned.
Sept 20, 2008
17. Can I easily understand what is
happening?
AIG bailout:
When you think about putting an automaker
out of business, you put tire makers out of
business, you put seat makers out of
business, you put all sorts of things out of
business. It's the same thing with AIG. There
are tentacles. They're just so connected to so
many other parts of the economy that the
government deemed it more dangerous and
potentially more expensive to the economy to
have it fail than to give them this loan
18. How does this affect me?
As a senior citizen?
For older Americans, it's a particularly vulnerable time.
The stock market is down, the housing market is
slumping, and costs for things such as groceries and gas
remain higher than in previous years.
Sept 19, 2008
As a student?
But students like Hahn remain on the fringe. Even
after being awarded an out-of-state tuition waiver,
which lets him pay the same tuition as a resident
from Georgia, he says he has borrowed all he can in
federal loans. His parents, who are facing their own
financial struggles, can't co-sign for a loan with a
lower interest rate or better terms
Sept 18, 2008
20. Am I getting a broad-range of
information?
double dip recession
job growth
stimulus plans
unemployment rates
real estate progress and failures
the state of the stock market
21. Am I consuming biased
information?
President Obama
Phyllis Caldwell (head of the Treasury Department's
Homeownership Preservation Office)
CEO’s of major banks, hedge funds, and mortgage
companies including Countrywide, Bank of America,
Economists from the Economic Cycle Research
Institute (Lakshman Achuthan)
22. In 2010, what do experts predict?
“Unfortunately the unemployment rate is
probably going to increase again before it
continues on a downward trend. That's
primarily because the jobs recovery has been
slow enough that many people who are
unemployed are not actively seeking job
opportunities… Unemployment could go up to
9.7% to 9.8% to 10%.”
23. What steps can I take now?
“How to raise a family during the crisis”
“Business etiquette and other ways to help the job
search”
“Mogul Brothers offer rich advice through tough times”
(lessons learned through global recession that could be
applied to any business owner)
“What to do with what you have”
“Best cities for business”
“How to buy with so-so credit”
