The free market system will ultimately correct. A forclosure on ones record will not be seen as blemish on ones financial history and the cycle will start all over again.

The American dream of owning your own home and a small bit of dirt on which it stands is alive and welll,It is is  just taking a short vacation.

Need will certainly re create greed and we must all look for an improvement in controls and oversight by the  Government we elect to look out for us.

Profits and more profits are good. The trickle down theory works. The more money that is circulated get to everyone in our society and we get a sharee, some a little some more and some a lot, but it doesn't get buried in a mattress it buys things, it is used for investment and growth and every dollar of wealth that gets created is  used  over and over again.

Forclosure candidates should be offered re financing packages that enable them to stay in their homes. 50 year mortgages, low interest loans or 0% interest.

Five years down the road their homes will have recovered some or all of their equity value due to demand for housing, inflation etc. and the cycle can begin again.

Taking excessive profits outr of the system with burdensome taxation is negative. Human nature demands incentives and when they are removed the reason to strive, invest and work hard become questionable. That is not the American Way.

David

sabusa@msn.com

Steve: I'm one of the "morons" who sold as many homes as the market would absorb. I also saved and invested a significant amount of the income I made during the good times. I simply sold a product that the public wanted in a free market economy. I will do more of the same when the market returns several years from now. Until then I'll remain a wealthy and content capitalistic "moron". Are you a socialist?

It seems like this would be a good example to be followed. These builders "saved" in the boom times rather than spend every cent. Now that there are bad times, they are kept a float by what they "saved"

Seems like some story of Ants and Grasshopper come to mind. Oh wait that is old stupid thinking not nearly progressive enough to prove true in these modern times.

 I'm working on saving, being a grasshopper hasn't worked well for me either....

Hey when there is 128 million homes in the US and only 117 million home needed who are they building for anyway? They build & build & now there paying for it. Only so many people can afford 2 or more homes. Most can't afford 1.

what is the american way? we are the only country where a closet is bigger the the bathroom!!! who to blame? EVERYONE. the builder, the realtor, the lender, the buyer...we all want a place to call home. who places a value on these "boxes" with roofs?? A house that is only "worth" $50K to one person maybe worth a million to someone else. what goes up must come down... supply and demand baby... guess what...there's a HUGE supply of houses now and not the demand... hmm just a few years ago...there were not enough new homes and even worry that there was not enough open land to build on... We as a country need to pull together and face this recession rationally & optimistacally because apparently if the US fails financially so does the entire world.

I don't think home builders are at all to blame!  Home builders/real estate developers  (at least the one's I work with) don't build homes/subdivisions out of pocket. They build on borrowed money.  It's always better to gamble with somebody else's money.  So it still goes back to silly lending practices. The size of the home (here again speaking locally) is generally determined by the price of the dirt it sits on.  A house generally costs three times what the lot did.  So if a 60'x100' lot costs $20,000 then the house costs $60,000 as a minimum for a grand total of $80,000.  As the land costs go up so does the cost of the house and it could be the exact same house that cost $60,000 six months ago now costs $100,000 simply because of the increase in land costs.  Our local builders never price a home on materials and labor.  

You can't blame the builders in this case.  Supply and demand is the American way.  The huge real estate increases in certain parts of the country are the result of the property the houses are sitting on going up in value, not the house itself.  Do your research.  That's why places like California have median home prices that are triple what they are in other parts of the country.  It's the same builders.  The value of the property itself is dramatically different however.  AND bottom line, no one held a gun to anyone's head and made them purchase a house that was overpriced.  READ BEFORE YOU SIGN.  It makes me so mad when people are pointing fingers at the lenders when their "adjustable rate mortgages" adjust and they can no longer afford their homes.  What did they think was going to happen???  

the last thing anyone needs are more empty houses!  

I am friends with a harvard law grad with 20 plus years of contract litigation, he said something to me last week that also fits this housing "bubble"

"you win some you lose some"

anyone who tells you they know the future and what prices will be does not know what they are talking about. as an economics buff i can say at best we can talk trends and predictions. look at population trends in your local area, look at job trends, people with jobs need homes. if people jobs or both are leaving the area housing will drop.

As someone in the construction business, it's hard for me to watch the industry not change their M.O..  I still see the same builders attempting to market and  build the same "overpriced, oversized" product.  The days of the $500K tract subdivision are done for awhile.  We flourished in a market when the average size of a home was 1500 sq feet. We have felt a major decline when that average jumped to almost 3000 sq feet.  What happened to a true first or second home?  I know of many people moving from apartments into almost 3000 sq ft homes.  I do believe they bought the product that was most readily available.  Not blaming the buyers, not blaming the builders, or the lenders (although predatory practices did have something to do w/ it), just saying that when people went to make their move on the American Dream, the choice was clear, a new home over an already existing home due to all of the prices being inflated.  I would like to see the builders take a step back and realize that the definition of the American Dream has changed for awhile.  They need to once again build a product that is more attainable and realistic.  Then the public needs to change it's own perception of what is attainable and realistic.