See: Dan Gillmor on Grassroots Journalism, Etc.: Bubble, Bubble..
San Francisco Chronicle: Up, Up and Away. Another month, another real estate record. Median prices for existing homes in the Bay Area hit an all-time-high of $569,000 in February, rocketing 19.5 percent from $476,000 in February 2004 and up 2.3 percent from $556,000 in January.
I’ve been on the soapbox about this for quite some time now (See: Steady Increase in Interest Rates), what is just soo scarry is the amount of people totally maxed out with interest only loans. We currently have the luxury of a 20 year low in the interest rate, it’s not going down, it can only go up. If you can’t make your mortgage payment now, what are you going to do when we tack on another two plus percent?
Dan summarizes this very well, in his own words:
“The most revealing statistics in the story: “Bay Area home buyers in February committed to a typical monthly mortgage payment of $2,549, a record. That payment is up 21.9 percent from $2,091 a year ago.”
In other words, more and more people are further and further extended financially. Most of them are on mortgages that will cause their interest rates to rise at some point.
This is going to get so ugly.”