“The credit crunch will only have a slight effect on mortgage availability for people buying $350,000 condos (which is quite cheap for downtown). It certainly won’t result in people having to pay only cash! That’s just a completely ridiculous assertion. Financing will still be widely available, but it will be harder for people to stretch beyond their means. The days of interest-only financing could be over, and that’s a good thing.”
—UptownR commenting on Jane’s comment on our post about Metropolitan Tower’s closeout special
I don’t think I was saying that it won’t be tragic… I was saying that it’s silly to think that people will have to pay cash for real estate in the near future. There may be several devastating effects of the credit crunch, but the availability of standard mortgages will only drop slightly. It’s the risky mortgages that allow people to overextend their buying power that are going to end, and that’s a good thing.
Sorry if the headline misstated your position, UptownR, but you didn’t mention the several devastating effects in your first comment, just the “slight” effect on condo buyers in this price range, the fact that financing will still be widely available and the positive effects of not allowing people to overextend themselves.
That characterization, unlike the doomsday scenarios painted by some, seemed to fall short of tragic.
I think my comment was a rebuttal against the doomsday scenarios put out by some who really don’t know anything. I don’t think anyone can really say if the market will quickly bounce back or will sink further into oblivion. Different expert economists have come to different conclusions, and only time will tell what will happen. But painting an overly dour or rosy picture of the market without rational evidence is really ridiculous at this point. We just don’t know what will happen–but I’m pretty sure that people won’t be paying cash for condos any time soon! That’s just ridiculously overstating the problem. If we end up in “Great Depression Part 2”, then maybe that comment by Jane would make some sense, but not under today’s conditions.