The Real Real Estate Crises

As a real estate agent, I am suppose to sound optimistic about what is going on in the real estate industry. However, the reality is that I don't think things will get better until late 2010 or 2011. Also, I think that what is going on is more than just real estate problem. It is only the beginning. Our economy is going through structural changes.

Here are some things I think contribute to what is going on:
1. the oil consumption : we now have billions of new people who can buy cars, washers, dryers and therefore, need energy: India, China, Latin America, Africa....where having a clothes washer was a luxury it is pretty much becoming a common item, as a car, motor bike.

2. US and world real estate prices exploded. I think this is primarily due to an increase of credit (credit card, mortgages) being more easily available.

Now, I don't think it is because people are getting richer. Yes, people may getting paid more (eg. India, China, Mexico for example). I think it is because the big banks are making credit more available.
And, the forthcoming, credit crises as the mortgage crisis today.

That's globally. Locally,
In San Francisco, who really can afford to make a mortgage payment of $800,000 without a minimum of 2 salaries?
How many service jobs pay well enough to pay a $4,000 mortgage? Plus property taxes, etc.

Add a car payment of at least $400 per month.

Again, what's the problem credit. We are no longer willing to safe to buy something. We want it now using credit. I recently was talking to friend who has stopped making his mortgage payments, and bought 3 LCD TVS....He spent $7,500 on 3 othem and bought them on credit.

I asked why not just 1, or save up to buy them. His response that he wants TODAY, will enjoy them TODAY, and if he goes bankrupt tomorrow at least he enjoyed already.
wow.

Are we making our living at the Cost of the working Poor?

A new study shows that subprime loans are affecting blacks and Latinos more than other groups.
And what is sad is that a lot of these groups could have qualified for non subprime loans.As a real estate and loan agent, I think that many of us perhaps don't intentionally want to hurt our clients, but we fail to do our work and chose the easy path of getting our
client subprime loans because (1) the banks tells that we should because they are easier to get,or (2) we intentionally do it to get a greater compensation.If we really do care about of clients then we should start questioning the loan programs the banks/lenders are asking to submit.
Are we making our living at the Cost of the working Poor?
For more info see
http://money.canoe.ca/News/Sectors/BanksFinance/2007/05/19/4193328-cp.html