Retracing the events which unfolded to deposit us into our current market situation seems to be a favorite pastime these days. It was a seller’s market for a few years, which translates to an increase in pricing. In fact, buyers were often making offers which surpassed the asking price.  This leaves appraisers in a bind to track rapidly appreciating homes. We can factor in a few fraudulent appraisers here if we want to remain objective.

Let us pause to remember the investment banks saw everyone making money in real estate. In turn, their clients wanted in on the action, the investment banks do, after all, keep their investors best interests at heart. This idea mirrors how realtors work to secure the best opportunities for both their buyers and sellers.
Investment banks found vehicles for their clients to invest in mortgages, and the LO’s allowed this.  Blend this tragedy with the risky products that were occurring, such as 100% financing on ARM, and ask yourself if the buyer beware was obvious enough.

Buyers were given 100% assistance, a serious lack of regulation considering some of these individuals should not have been allowed to buy. Eventually, pricing stopped appreciating, and refinancing became impossible with property values depreciating and these same individuals began to face serious consequenses. Predictions failed and the boat capsized and it begins to make sense that we simply cannot blame a single party for the situation at hand, but stand up and pick up the pieces.

Tags: florida real estate, fort lauderdale housing market, fort lauderdale real estate market, south florida homes, south florida real estate

This entry was posted on Friday, September 26th, 2008 at 5:16 pm and is filed under housing market, real estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.