Santa Fe Real Estate
Thu Jun 16 2005 13:38 MDT #So the New York Times published this infographic today. It shows a pretty big large dot of Interest Only morgages over Santa Fe. Due to interesting housing sale laws in New Mexico it's pretty hard to know much about what is going on in the local market. The only people who know what is up are people with a vested interest in saying "buy now!!!".
However interest only loans are most certainly not the right choice for most people, being down right risky, if cheap to start out. As such a large chunk of such loans indicates that at the very least the local market is well over priced in comparison with local wages, and people can't afford homes without taking large risks. They are also the preferred vehicle for real estate speculators who plan on being out of the market by the time the risk hits in a big way -- usually 5 years hence. And lots of speculators almost certainly means a bubble. Which is where my bets lay ....