February 1st, 2009
09:45 PM ET

The housing mess

CNN Chief Business Correspondent Ali Velshi talks with a panel about the housing crisis and solutions to solve it.

Filed under: Ali Velshi • Economy • Housing Market
soundoff (3 Responses)
  1. earle,florida

    This is a great time to buy a new,or existing home in the market,especially for first time buyers. With record low interest at 4.5% or lower ,you can't go wrong,and existing home prices at 2000 market values, it's a no brainer! Unfortunately, everybody in america is aware of the "Catch 22" situation surrounding this unique conundrum ,that being ,existing and new home buyers can't afford the new down-payments ,and closing cost. It's a well known fact that a home buyer in america stays in his home for 7/10 years,with turnover consistent with demographic statistical data compiled by the," Nat'l. Assoc. (NAofR) of Realtor's",but past,and current empirical statistics have been turned upside-down in today's housing market. I'd like to validate my argument about how difficult it is for a first time home buyer to purchase in todays envirorment. These young families(assuming their young married couples) have a very hard time just saving a couple of hundred dollars a month.For them to accumulate a 20% down payment is doable over several years,but the fear of job loss, getting sick is a great deterrent just to stay put, and rent,knowing there's piece of mind with a roof over their families head. Finally ,for existing home owners to sell,and refinance,or purchase a new home is a monumental task financially. If your home purchased was 7/10 years ago,referencing "NA of R", it's market vaue has lost 33%/50% in most areas in the country. So,if you paid $400k with a 20% down payment at conventional mortgage rates,with the 33%/50% loss in market value your homes intrinsic value is [(I'll be generous and use 33%) (400k,pp-80k,dp=320k)(400k,pp -134k,lv=266k) (+/- principle paydown over the life of mortgage,which I ommitted)] somewhere in the area of $266k which is a huge "Negative",almost imposible for the average home owner to get out from under. I have realistic solutions ,but I'd need a couple more pages to explain! [(pp/price paid)(dp/down payment)( lv/loss value)] Thanks Ali

    February 2, 2009 at 11:21 am |
  2. Michael "C" Lorton, Virginia

    The corporate greed, the scammers, the predators--all have sherred the housing market and homeowners. Corporate greed caused this, and our government stood by and watched without any oversight or regulation. Now we wait until the dust settles--and then we will deal with it. The stimulus package-no matter how much you financial infused into the housing industry, banks and mortagage companies the effect will not be seen for quite sometime-and we are only giving monies back to those entities that squander it away with bad financial decisions and greed. If as you say in the video--something is happening-–show me!!!

    February 2, 2009 at 9:04 am |
  3. Phillip Davis

    I believe if our government is willing to help banks directly they should be just as willing to help the people the tax payer's who infact enable them to help anyone. Plus with out the people to put their money into the banks they fail anyway. So in my openion the people should get some type of aid packet helping them to pay off their morgaes as we as other depths which helps the bank.

    February 2, 2009 at 12:37 am |