Comments about ‘Utah's subprime exposure: Crisis is worse in rest of U.S.’

How stupid are people? I have seen this coming for about 3 years. I hope the housing, stock, and all other markets take the biggest fall they have ever had. This will level the playing field somewhat and get people just starting out in on ground level, without all the speculators and inflation raising prices beyond resonable. Utah has a killer economy and job market right now, but that is what every other state was saying 3 years ago. That does not mean huge problems are not ahead when prices, especially housing, appreciate to where the median income is not even close to being able to purchase. Good luck all, we are in for troubled times, not only nationally, but right here in Utah. Those like Adam in the article, and myself, will be OK, because we have not jumped on the bandwagon that is heading for a cliff.

The saying is that real estate markets are local. But credit markets are global, and the credit markets are crashing hard. The value generated by merely buying and selling houses to one another is fiction.

The Deseret Morning News should emphasize its not limited to subprime. Alt-A risk is probably a larger percentage of the market. Climbing interest rates on jumbo loans will likely dampen sales in expensive areas. And what is the root of Utahs touted economic boom? Residential construction. More supply, accompanied by more low-paid workers who wont be able to get a mortgage.

Bottom line: Im not going pay $500,000 or more for an Avenues earthquake deathtrap that requires $100,000 of retrofitting to make it safe. Im renting in old town Park City for much cheaper than buying even in Salt Lake (and obviously less than buying in Park City itself; rent-to-mortgage ratio is 1/6, and zero risk). Its a great place to wait this out.

By definition Utah is subprime so how can the housing be any different. No snow, no rain, too many children, heavily dependent on US Govt spending to include medicare and favorable tax gimmickry. Shut down the U S Govt and the state is doomed.

One comment in the article caught my eye. It regards the widely propagated belief that you're "throwing your money away" when renting. Are you throwing money away when you rent a car? Or rent a night's stay at a hotel? No! Renting is a transfer of wealth in a market like we have. You can rent a nice house for far less than you'd have to pay for the same house with a mortgage. With the savings, you can invest in far better, and safer, instruments. Don't let the mortgage tax deduction sway your thinking. It's true affect is far less than the Realtors would have you believe. Buy a house to live in; not treat as an ATM. And always get a fixed rate with a 20% down. If you can't afford the payments this way, you can't afford the house. And, lots of rich people rent houses they can't otherwise afford.