For every sky-is-falling, bubble-about-to-burst forecast, real estate consumers can find some comfort in more down-to-earth rebuttals which typically are more heavily grounded in here-and-now facts.

Forecasts, be they of doom or boom, by their very nature, are look-ahead guesstimates, crystal ball gazings and could-bes. The best forecasts use sound economic models, validated historic trends and big brain computer-generated scenarios, yet they remain a lot like weather reports -- clouded in uncertainty.

Ironically, that's because even the here-and-now can change in an instant.

Those unforeseeable events have a way of shaking things up -- blowing them over, flooding them out and burning them down.

The point is, it doesn't really matter if the forecast for tomorrow is overcast or if the day dawns with a rosy cinematic glow.

The best real estate consumers can do to reduce their risk for the future and improve their odds today -- in any market -- is to stick to sound financial and investment principles when buying shelter as a home or as an investment.

Apparently, a spate of recent reports indicates that's just what consumers are doing.

Only 8 percent of home owners carry risky interest-only mortgages and 73 percent of them pay both the principal and the interest at least some of the time, according to the Wells Fargo Second Annual Survey of American Homeowners.

This isn't the first time a finding has undercuts experts' hues and cries about the market being overloaded with risky loans that could leave home owners vulnerable in a market slow down.

Assuming borrowers acquire interest-only loans because that's all they can afford and assuming interest rates rise, payments could move out of the reach of over-stretched borrowers. Their budgets could snap when the demand for principal payments kick in.

Or so the theory goes.

The here-and-now of Wells Fargo's study says, to the contrary, of the 73 percent of those who pay principal at least some of the time, 23 percent pay the principal in addition to interest all of the time while an additional 8 percent make principal payments as well as interest payments outside of the standard payment schedule. Just one in four (25 percent) pay only interest all of the time.

Borrowers who use interest-only loans obviously aren't necessarily stretched, but more likely cashing in on an easy-money system that allows them to leverage their purchase.

Buying a more expensive home was not the reason most often cited for using interest-only loans. Lowering monthly payments in order to direct more funds into higher return investments was, the survey found.

That is so not the drama.

"Despite the discussion in the media about interest-only real estate-secured loans and questions about consumers' ability to manage their payments, these survey results are similar to the responsible consumer behavior we see in Wells Fargo's own home equity lending portfolio," said Doreen Woo Ho, president, Wells Fargo's Consumer Credit Group.

Pardon the Wells Fargo self-serving digression.

But the survey does reveal at least the possibility that consumers aren't lemmings, sheep or migratory fowl, but real people with a broader financial conscientiousness than forecasts often give them credit.

Federal Reserve Chairman Alan Greenspan said as much when he indicated even if droves of consumers were reckless enough to endanger their household budgets with risky loans, equity alone could save them from themselves.

"The vast majority of homeowners have a sizable equity cushion with which to absorb a potential decline in house prices," said Greenspan in a speech before a session of the American Bankers Association's annual convention in Palm Desert, CA.

Home equity is a hear-and-now economic fact consumers can take to the bank.

Greenspan said even where home prices have most appreciated, the fast run up in values have helped keep loan-to-value (LTV) ratios low. Even when the heavy leverage of low down payments and creative financing was used to purchase homes, buyers have quickly recovered from initially high LTVs, thanks to speedy appreciation.

"The LTVs for recent home buyers appear to be lower in those states that have experienced the most explosive run-up in house prices ..." said the Fed chairman.

There's one more here-and-now element particularly significant in at least one of those fast-appreciating markets.

Population.

In California, where the big bubble bursting boom is supposed to bang the loudest, there aren't enough homes to go around.

Here and now.

For the past half decade, the shortage has been compounded each year by a shortfall of 50,000 housing starts, according to the California Building Industries Association.

Imagine if the shortage continues for the next two decades when the Golden State is expected to grow in population by 10 million people.

That's a forecast from experts at the Public Policy Institute of California who, along with other experts, recently testified before a state Assembly committee.

• Population booms -- which typically don't come with busts -- are expected to swell the state's Inland Empire, San Joaquin Valley and Sacramento areas by 45 percent and coastal regions by 17 percent.

• By 2030, the number of seniors will double and one in every six Californians will be over age 65.

• In the next six years, Latinos will be the state's largest racial group.

• And by 2011, public universities and colleges could run out of money to add on facilities required to meet the demand for college-educated workers.

They will all have to live somewhere.

Published: October 26, 2005

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.