This couple (article pasted) made a haphazard $900,000 decision to make an "investment".
What would any financial planner say if someone bought $900,000 worth of a particular stock-on margin? The financial insanity and risks are just starting to become apparent. OWP
http://www.sacbee.com/content/business/projects/boom/story/13993878p-14827231c.html
"On a sun-scorched Saturday 18 months ago, hordes of people lined up for hours outside a sales trailer in a West Sacramento housing development. Now they're lining up to sell. The homes that sold in July 2004 have just been completed, and some owners want out. On one small street..five buyers have put their properties on the market. Three have already dropped their asking prices."
"'If I had known a year later that there would be a million homes listed, I might not have bought,' said Lynette Wall, a real estate agent who helped her husband buy an $809,000 home. Now, facing a $6,000 monthly payment on a vacant house, they've put it up for sale. But there are no illusions about a big payoff; she says they're hoping to make 'a little bit of money.'"
"A wintry chill has descended on the Sacramento housing market. Sales have slowed, cancellations of new-home purchases have soared, and prices in some areas are edging downward, signaling the end of an epic housing boom."
"On a Saturday in July 2004, the line formed outside a sales trailer. John McConnell, an Elk Grove building contractor, waited in line with his real estate agent and future wife, Lynette Wall. Hours later they got inside the trailer and he reserved a two-story, 3,100-square-foot home. The price: $809,000."
"McConnell said he and Wall originally planned to live on Woodhaven. By the time construction was completed two months ago, they'd changed their minds. The purchase was now an investment. They listed the property in early October for $885,000. Soon they dropped it to $880,000. They need $860,000 to break even, Wall said, given the closing costs they paid, the $6,000 monthly mortgage payments and a 3 percent commission to the buyer's agent."
"Complicating things: competition. Four other homebuyers on the two-block street are trying to sell, including Wall's agent. And the builder is offering discounts on four other Woodhaven homes it hasn't yet sold. All told, one-fourth of the street is for sale. Wall has faith, but acknowledged she's getting uneasy. 'I knew it was going to have to slow down (but) I didn't think we would have so much inventory,' Wall said. 'I'm hoping somebody will offer me a fair deal that'll make me a little bit of money. 'At the time we all thought it was a fairly good deal,' McConnell said."
What would any financial planner say if someone bought $900,000 worth of a particular stock-on margin? The financial insanity and risks are just starting to become apparent. OWP
http://www.sacbee.com/content/business/projects/boom/story/13993878p-14827231c.html
"On a sun-scorched Saturday 18 months ago, hordes of people lined up for hours outside a sales trailer in a West Sacramento housing development. Now they're lining up to sell. The homes that sold in July 2004 have just been completed, and some owners want out. On one small street..five buyers have put their properties on the market. Three have already dropped their asking prices."
"'If I had known a year later that there would be a million homes listed, I might not have bought,' said Lynette Wall, a real estate agent who helped her husband buy an $809,000 home. Now, facing a $6,000 monthly payment on a vacant house, they've put it up for sale. But there are no illusions about a big payoff; she says they're hoping to make 'a little bit of money.'"
"A wintry chill has descended on the Sacramento housing market. Sales have slowed, cancellations of new-home purchases have soared, and prices in some areas are edging downward, signaling the end of an epic housing boom."
"On a Saturday in July 2004, the line formed outside a sales trailer. John McConnell, an Elk Grove building contractor, waited in line with his real estate agent and future wife, Lynette Wall. Hours later they got inside the trailer and he reserved a two-story, 3,100-square-foot home. The price: $809,000."
"McConnell said he and Wall originally planned to live on Woodhaven. By the time construction was completed two months ago, they'd changed their minds. The purchase was now an investment. They listed the property in early October for $885,000. Soon they dropped it to $880,000. They need $860,000 to break even, Wall said, given the closing costs they paid, the $6,000 monthly mortgage payments and a 3 percent commission to the buyer's agent."
"Complicating things: competition. Four other homebuyers on the two-block street are trying to sell, including Wall's agent. And the builder is offering discounts on four other Woodhaven homes it hasn't yet sold. All told, one-fourth of the street is for sale. Wall has faith, but acknowledged she's getting uneasy. 'I knew it was going to have to slow down (but) I didn't think we would have so much inventory,' Wall said. 'I'm hoping somebody will offer me a fair deal that'll make me a little bit of money. 'At the time we all thought it was a fairly good deal,' McConnell said."
