3 on page 9, for whatever reason is the bursting real estate bubble

If your property or the property to buy, then it is better, because this could be the main message given that this year the real estate and your financial future.

In the past five years have seen an explosive growth in the housing market, and hence many people believe that is more secure than led'investissement can be done. Beh, it is not true. The rapid Anstieg property prices have the housing prices have never been in history, after adjustment for inflation! The growing number of people about the real estate bubble means there are fewer buyers of real estate. Fewer buyers, prices fall.

On 4 May 2006, Federal Reserve Governor Susan Boardl Bliese said that "housing is really kind Höhepunkt.Dies is the new chairman of the Federal Reserve Ben Bernanke has said that the announcement he von "soft" on the housing market could harm the economy. And former Federal Reserve Chairman Alan Greenspan previously described the property as a foam. All of these large financial experts agree that there is a recession and sustained market power is clearly a need to know the reasons for change dieseIch am.

3 on page 9 reasons why the housing bubble will burst include:
1. Interest rates rise - from mortgage to 72%!
2. The first appearancerhalb of the house have a market price - in the housing market is a pyramid, and the Foundation together
3. The psychology of the market has changed, so that people are afraid of the bubble - mania de bienes roots more!

The first reason is that the house of the bubble bursting is to increase or interest rates. According to Alan Greenspan, interest rates are at historically low levels from June 2003 to June 2004. The low interest rates encourage people to buy houses that cost more than what you in der rule can afford, but at the same monthly cost, essentially creating "free money". However, when low interest rates from pfine risk and concern that interest rates have risen and continue to grow even more. In the event of an increase in interest rates to combat inflation, partly because of high costs for gasoline and food products. Higher interest rates, making a more expensive home, what the prices of existing houses.

Rising interest rates also affect Leute who bought adjustable mortgages (arms). Mortgage ajustablil has a very low level of interest rates in the Embassy and payments in the first two to three years, but after the low interest rates and the monthly mortgage payment jumps dramatically. With the adjustable rate mortgage is, loans for the 1st Quarter of 2006 by 72% in 1st Quarter of 2005.

The exclusion of aggravating the interest rates continue to rise and the payment deglihoquetTeck adjustable and reply to make ahigher interest and mortgage payments. Moody 'sa said that 25% of all mortgages are the tasso presupposes interest in the years 2006 and 2007. This is $ 2 trillion of mortgage debt of the United States! If the increase in payments, will be a success for the pocket. A study conducted by one of the largest bond insurance, concluded that 1.4 million households with a payment of 50% directly or piùDopo the introduction of a pay period.

The second Gabout why the housing bubble burst is that the new housing sonra no longer buy CAwenn because of high prices and high interest rates. The housing market is essentially a pyramid scheme, and if the number of buyers increases everything is in order. Since the homes purchased by first home buyers at the bottom of the pyramid, the nouveaud'argent or $ 100,000.00 for the house that can go the pyramid with the seller and the buyer of a $ 1,000,000.00 home, where the Loday sell a house and buy a more expensive home. This double-edged sword of the high property prices and interest rates mayorlos the price of many new buyers in the market, and now we begin to feel the impact on the real estate market. Slow sales are available and for sale for housing are increasing steadily. The latest report on housing showed new home declined from 10.5% of sales in the month of February 2006. It is the largest one-month drop in neun years.

The third reason is austa housing bubble has changed, that the psychology of the housing market. In the last five years, the housing has deteriorated dramatically, and if you have purchased real estate is more than likely that FHA money. These positive returns for many investors to fuel the market for more than that most people saw and decided to invest in real estate before you "lost".

The psychology of the bladder Markt, whether it is the stock market OMarkt property is known as "herd mentality", where everyone follows the herd. This herd mentality is at the heart of every bubblelectrónico and what has happened on several occasions in passatoy comprisndo United States during the bubble of the late 1990s, the Japanese bubble of the 1980s and also in the U.S. railroad bubble in 1870 . The herd mentality has on the whole real estate market until recently.

The bubble wto grow wiser than the IMBarazzante "for the purchase at a higher price. Since it is becoming less and less" crazy "available or willing to buy a house, go desaparece.Cuando manial'hystérie over inventory was during the boom in the prices by less time. This is the case of the three historical bubbles mentioned above and many other historical examples. It is also important to remember that the explosion of these bubbles U.S. history was in a recession.

By  Change of mind breath to the real estate market, investors and speculators are afraid it is to stop exploitzione of real estate to lose money. Consequently, not only less purchase of property, while the sale of property and investments. This is the production of a large number of homes for sale on the market at the same time as the inclusion in the housing market floods. These two forces of a MaiKing offer more homes for sale, mit of increasing the supply of new homes for sale continue to exacerbate the problem and all the values down.

A recent survey showed that 7 out of 10 believe that the real estate bubble burst before April 2007. This change in the psychology of the market "is to own property alone as well as at any price" for a healthy concern that real estate, due derWachstum on the housing market.

The replica of the fracture borbuja will be enormous and will focus on  force majeure on the global economy. U.S. investor George Soros said that the United States in 2007 in a recession, and I agree with him. I think we're in a recession because the housing bubble, jobs are lost, the Americans can no longer collect the money from their homes, and the whole economy sharp slowdown, with recession.

In conclusion, the three reasons why the area is palom exchange rate are higher for the first Zeit-buyers from the market, and the psychology of the housing market is changing. The recently published book "How to Prosper in the evolving real estate market. Protégez Bubble Now!" Discuss these questions in detail. For more information, visit www.MyRealEstateBubble.com

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