Get out, if you still can.

You know what dawned on me this morning on my commute to the mind-numbing hell that I call a “job”? Probably, you don’t – so I’m going to tell you. I think a lot about the real estate industry – mostly because I live it every goddamn day. And it doesn’t help that I live in Michigan, where our slumping economy is accelerating the bursting of the bubble. But I was at a birthday party for my friend Patrick’s son on Saturday and he’s a Realtor, so we got to talking about the whole problem – the trend for interest only, variable rate mortgages, negative amortization loans, etc – and how it boggles my mind that with prime jumping basically 3% over the last 12 months, that people are still taking out ARMs…

So that little convo sowed the seeds of what was to become this morning’s epiphany – I don’t think it’s anything terribly profound, but I do like its simplicity.

With all the low-interest mortgage options that have been available – especially due to the prevalence of variable rate mortgages, I think it’s fair to assume that alot of people who couldn’t afford to buy (or otherwise invest in) real estate used the ARM to keep their payments within the realm of affordability, on the expectation that when the ARM expired, they’d be able to sell it. Sell it to whom? Everyone else in the market bought on the same speculation – or refinanced on the same speculation.

All fallaciously believing that they could be out of the market before the bubble burst.