Also, many housing deals involve a party which much sell their old house before they move to a new one, especially as no money down financing dries up. Even if someone can afford to hold two mortgages temporarily, often people have their down payment in their old house.
Missoula builder Joe Stanford doesn't need fancy statistics or color-coded foreclosure maps to tell him America's subprime mortgage crisis has arrived here.
Like other builders and real estate agents, his deals have been scotched or delayed by buyers who first must sell their homes in stagnant markets.
He's stuck when out-of-state buyers who want to relocate to his Lolo and Missoula residences can't sell their houses in Denver, Chicago and Los Angeles.
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“We've put deals together here, but everything is contingent on them selling their homes. They got into subprime loans and bought houses they couldn't afford unless they financed it with those. When the market dropped, they lost their chance to sell,” he said.
In the best of times the housing market has a lot of friction. And now...