| Real estate prices have fallen across the | | | | H&R Block, the famous tax accountant firm, |
| United States, and most rapidly in the | | | | took a loss of about $135 million mostly from |
| location that were the parts of the real | | | | losses in their mortgage subsidiary. Option |
| estate bubble going up the most rapidly in | | | | One Mortgage, and its sub-prime unit have |
| the last five years, such as Florida, | | | | been taking a big hit. |
| Arizona, and the Boston, Mass. area. Still, | | | | |
| some areas must be better opportunities for | | | | Of course, if you just look at this from the |
| new buyers. After all the question remains, | | | | standpoint of the real estate market, it |
| has the bubble gone down far enough, or does | | | | doesn't seem that big a deal. Instead of |
| it still have a lot more to go. In any case, | | | | panicking, there will just be real estate |
| you have to live someplace, so you may be | | | | brokers who go heavier into the foreclosure |
| likely to buy a house or apartment somewhere | | | | and distressed home market. It will seem to |
| anyway. If you live in some areas, like much | | | | be a novelty to them to sell distressed |
| of upstate New York, there may never have | | | | homes, to try to buy them at the lowest |
| been much of a real estate bubble to worry | | | | prices and resell them quickly at higher |
| about in any case. | | | | prices. Over the last five years, the |
| | | | foreclosure rate on homes was very low, |
| On the other hand, on the Jersey Shore, and | | | | because if a homeowner fell behind in their |
| in suburban New Jersey's Bergen and Passaic | | | | mortgage, they could either refinance the |
| County, near New York City, a real estate | | | | home at a higher price than they paid and get |
| bubble has definitely been built. For | | | | some quick cash out, or sell the home quickly |
| example, on the Jersey Shore (New Jersey), | | | | at a higher price than their mortgage, but |
| not far from New York City, the foreclosure | | | | not anymore. |
| rate on homes is climbing in some fairly | | | | |
| ritzy neighborhoods. The foreclosure rate | | | | If you look at reports of the involvement of |
| has doubled both there, and in nearby Bergen | | | | the entire U.S. banking system in the |
| and Passaic counties. | | | | financial bubble you get a different story. |
| | | | Since the average bank has about 50 percent |
| Some sub-prime mortgage lenders sound weak | | | | of its equity tied up home and commercial |
| and some are actually closing up shop. This | | | | mortgages. A big hole in this equity could |
| is becoming a major financial development. | | | | really start the financial system going down. |