The last wave of investment homes was sold abruptly at big losses, and values started dropping across the board, especially in places like Florida, California and Nevada. ARMs reset and foreclosures continued to spiral. Suddenly, hundreds of thousands owed more on their homes than they were worth and had nowhere to turn. Soon, the stock market tanked, the values of retirement plans were slashed and millions of jobs were lost.
The net result: Real estate has been repriced. The rest is history -- a history we should not soon forget.
The repricing of home values almost everywhere in the country brings with it a whole new real estate reality, one that marks a return to some of the real estate "rules" of the past. It's a reversion to many tried-and-true fundamentals you should recognize and comprehend:
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Remember the wise decision that Bank of America made in August 2001 in light of the decision it's making now.
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