The Way Government Entities Think About Affordability
A weekend topic starting with a CNN opinion piece by William Poole. “Today, the Fed is again ignoring the GSEs and their potential contribution to future instability. According to Freddie’s 2016 annual report, ‘Expanding access to affordable mortgage credit will continue to be a top priority in 2017.’ Fannie/Freddie have redefined ’subprime’ to a credit rating of below 620; previously, these firms and banking regulators had used 660 as the dividing line that defined a subprime borrower. Now by using the lower number, they may be buying even weaker mortgages than before the financial crisis.”
“The GSEs are wrapping new sub-subprime mortgages into the mortgage-backed securities they sell to the market. Fannie and Freddie guarantee these securities, and because the federal government stands behind the GSEs, there is little market discipline. Think about that: With regard to subprime mortgages we may now be in worse shape than we were before the crisis.”
“According to the Fannie/Freddie annual reports for 2016, it is surely the case that subprime mortgage issuance is one force driving house prices once again — up by about 30% over the past four years and now about back to the elevated peak in 2006. Why isn’t the Fed talking about this matter? Someone please convince me that ‘this time is different.’”
From Arizona Big Media. “‘You can never have too much of a good thing,’ or so the saying goes. But that’s not true when it comes to residential real estate in Metro Phoenix. ‘Arizona continues to have a shortage of listing inventory, especially less than $300,000,’ says Trudy Moore, designated broker at HomeSmart. ‘First-time home buyers make up a large sector of the market and there are just not enough listings to fulfill the need. If a property is listed under $300,000 and it is in good condition, it will probably have multiple offers within a few days.’”
“‘Our projection is for 16 percent more new home demand in 2017 and significant appreciation — 7 percent to 9 percent,’ says Jim Belfiore, owner of Belfiore Real Estate Consulting. ‘The rise in demand is already underway. The appreciation is due to inflation, and while we project this growth in home prices, the question is whether or not it will actually take hold?’”
“What is more clear, Belfiore says, is that builders need appreciation to cover the cost of new land, lots and higher building costs.”
The Coloradoan. “New home construction in some parts of Northern Colorado leveled off in 2016 due in part to a lack of affordable and available building lots. But that doesn’t mean there’s a dearth of building activity on both sides of Interstate 25 as area communities struggle to keep up with housing demand.”
“In some communities like Windsor, developers hit the gas last year and show no sign of letting in 2017. The town issued 690 single-family building permits last year, more than doubling the permits issued by the town in 2015 and 2014 and exceeding the number of permits issued by much larger Fort Collins and Loveland.”
“A lack of affordable and available lots is driving all new residential construction, said Eric Holsapple of LC Real Estate Group, which is developing homes in Loveland and Fort Collins. The company is building out its Spring Creek and Story Book projects in Fort Collins and 48 lots at Mariana Butte golf course in Loveland.”
“‘It’s really hot, but we’re looking where the next place to go is and it’s slim pickings,’ Holsapple said. ‘It’s either hundreds of acres that take a lot of infrastructure’ or lots that are slow to be brought to market. As inventory wanes, the cost of new lots, including water, continues to rise.”
“The next round of lots are selling for $100,000, up from about $60,000 to $75,000, fueled by soaring water costs.”
“LC Real Estate has found 36 acres east of Interstate 25 and south of Mulberry Street that it intends to buy from Fort Collins developer Les Kaplan, who abandoned plans to build Fox Grove. Holsapple said he anticipates building about 75 homes on the site, including some two-story projects. ‘With the cost of land, we have to go to a little bigger home,’ he said.”
The Daily Camera in Colorado. “There’s no affordable homes left in Boulder County. Looking to head east to the Carbon Valley? There’s nothing left there, either, according to a new affordability study out of Longmont. In the last three years, the number of single family homes for sale under $250,000 has dropped 72 percent, and the number of attached dwellings for less than $150,000 declined by 87 percent.”
“The report extends past Boulder County and into Weld and Larimer counties, covering Boulder, Longmont, Lafayette, Louisville, Superior, Erie, Loveland, Berthoud, Firestone, Frederick, Mead and Dacono.”
“Not one of the 12 towns has an average home price under $250,000, the study’s threshold for entry-level affordability. Dacono is the closest, with a $265,363 average cost. For attached dwellings, only Mead was under the $150,000 threshold, with a $128,633 average — data that came from three sales last year.”
“‘Our conclusion from the information presented here is that there are no entry level housing options,’ reads the report. ‘The lines we drew in the sand as reasonably priced in both categories will soon be obsolete.’”
“In a recently released affordabilty report, NAR Chief Economist Lawrence Yun said, ‘Home prices have ascended far past wage growth in much of the country in recent years because not enough homeowners are selling and homebuilders have not boosted production enough to meet rising demand.’”
“Without the addition of lower-priced condos to the local market, Kyle Snyder of Land Title Guarantee Company predicts prices will go nowhere but up. ‘The bidding wars, the short days on market — I don’t think it’s going to slow down,’ he said. ‘The demand is just too high.’”
“Aside from the obviously devastating effect to potential buyers in lower income groups, the ever-rising prices could change the way real estate professionals and government entities think about affordability. ‘Our measuring stick is about to become obsolete,’ Snyder said.”
“In some communities like Windsor, developers hit the gas last year and show no sign of letting in 2017. The town issued 690 single-family building permits last year, more than doubling the permits issued by the town in 2015 and 2014 and exceeding the number of permits issued by much larger Fort Collins and Loveland.”
For some reason, Windsor really wants to grow. I just wonder where they’re going to find that many people who can afford houses starting in the high 300’s.
Windsor used to be the place where you would go if you worked in Fort Collins and wanted a “cheaper” house. Then some time ago it went “upscale” and suddenly it was McMansions everywhere. Anyone here remember “Water Valley” (who comes up with these names)? It’s in Windsor.
I remember the Windsor tornado.
Here are some numbers about Fort Collins-Loveland Colorado metro area in 2015. Note that Windsor is butted up against FCCo.
FCCo Median Family Income (2015 dollars):
Location 2015 1 YR Chng 3 YR Chng/Yr
FC-Lovelnd $64,919 +14.62% +12.52%
FC-Only $80,757 +8.40% +3.87%
Median home ‘value’ in FC-Only 2018 dollars:
2018 %chng from 2017
FC-Only $346,300. 9%
So, let’s estimate an adjustment to the align the 2015 FC-Only income to 2018 dollars using the 3.87% 3 YR Chng/Yr and see what we have:
2015 2018
FC Only $81K (rnd) $91K (rnd)
Housing affordability ratio:
HAR = $346K/$91K
HAR = 3.8.
Frankly, we’ve seen worse. Sustainable? No, it isn’t quite there. Still, this could go on for quite some time.
Yes, this is FC-Only, but FCCo should be driving the Greater-FC area prices. It’s just the way it works.
Some comments about FC:
1) Greater FC has: oil and gas employment, regional health industry, Hewlett Packard, Woodward-Governor (aircraft, steam turbine, etc., engine components),New Belgium Brewery, Otterbox, and Envirofit.
URL:http://fortcollinsworks.com/wp-content/uploads/2013/03/economic_health_plan.pdf
2) I’ve seen places like Greater FC, and they appear to be viable over the long run. This is true as long as HP, Woodward-Gov. etc. don’t find a better place to make money; usually some 3rd World crap hole with wages that are pennies on the dollar.
3) FCCo apparently has a plan that they update, evaluate, and perform against. This is good for any local, person, or company. I do this sort of thing in my personal life. Exasperates my wife sometimes, but she does understand the utility of this activity.
4) Warning: I think FC is doing the right thing with their economic development plans. Still, look closely at the outline of the city limits. This is somewhat odd. FC includes some areas and excludes others which may indicate that they are cherry-picking the better performing areas. Windsor is worse. Google that map, and you’ll see.
Some comments about Windsor, Co.
1) The city limits look like they are making their own brand of crazy. This bears investigation because city limits such as these are indicative of disfunction. FC-Only has somewhat of the same problem, but not like Windsor.
2) Windsor is right next door to FC. Short commute.
3) High income area.
Regards,
Roidy
BTW,
I looked up the place that my parents used to live in Lakewood, Co. Zillow says that it is worth $437k for a 2300 sg ft split-level built in 1974. Median family income in Lakewood is $67k. R = 6.5. Not Palo Alto, but this is not sustainable for the long run. How long you ask?
…
Regards,
Roidy
“This is true as long as HP, Woodward-Gov. etc. don’t find a better place to make money; usually some 3rd World crap hole with wages that are pennies on the dollar.”
HP and other “quality” FtCo employers have been steadily shedding jobs for years. There are some smaller tech firms but as a rule they tend to pay quite a bit less than similar firms do in Denver, which is why I drive south instead of north to work, even though FtCo is closer (I do telecommute 2-3 days a week). The University is a big employer as well. There are good jobs in Ft Collins, but you have to scratch hard to find them.
I have talked to more than a few people (renters) who are priced out of Ft. Collins and are moving out. Windsor used to be a popular destination but now it seems just as pricey as the Fort, so some are moving even further south to Loveland, which has also put upward pressure on prices, ob both rentals and sales.
As for sustainability, I think the party in Larimer county ended in 2016. Even zillow is saying that the market is “chilly”. The only question at this point is how hard will the correction be? I’m guessing that prices will drop ~20%. I suppose it depends on how many try to unload their shacks. So far I’m not seeing a deluge yet, but summer will be telling.
Where does a family go when they leave Fort Collins?
Since you know that area, could you please enlighten about that homemade crazy Windsor city limits? What industries or neighborhoods are they cherry picking?
Regards,
Roidy
‘With the cost of land, we have to go to a little bigger home’
‘What is more clear, Belfiore says, is that builders need appreciation to cover the cost of new land’
Notice that they don’t mention what the consumer needs or wants or can afford. Just what they paid. Sure, uncle sugar will step up, he always has. When I was driving through Dallas I listened to a REIC radio show. This builder was talking about his $260/sq ft houses. But the land was so precious (north of Dallas, pasture land last year), the houses “‘had” to be 7,000 sq ft.
Look, this is all just greed talking. Greedy developers, agents, lenders, everybody. Where are all the pro-regulatory people on this blog, lecturing us on the evils of unrestrained capitalism? You’re probably too busy congratulating yourself on your savvy shack purchase or watching a flipping show.
Geez, Ben….
Don’t get me started - I am restraining myself!
Yes, all of these pro-regulatory people are - and always have been - interested in the plight of others. Of the little guy.
They show it every time they take out their Mercedes for a cup of coffee at Starbucks.
From the CNN piece:
‘Yet the FOMC transcripts and the staff materials prepared in March 2008 suggest that no one in the Fed bothered to read the GSE’s 2007 annual reports, released February 28, 2008. In the FOMC conference call meeting March 10, there is mention of Fannie/Freddie in the context of declines in their stock prices, but no mention of important disclosures revealed in their annual reports.’
‘And those reports showed that Fannie and Freddie were both essentially insolvent at the end of 2007, at the business-cycle peak before the recession had really started. These two companies had obligations outstanding almost as large as the total Treasury debt outstanding.’
‘Today, the Fed is again ignoring the GSEs and their potential contribution to future instability. According to Freddie’s 2016 annual report, “Expanding access to affordable mortgage credit will continue to be a top priority in 2017.”
And the GSE’s are nothing compared to HUD.
‘Aside from the obviously devastating effect to potential buyers in lower income groups, the ever-rising prices could change the way real estate professionals and government entities think about affordability. ‘Our measuring stick is about to become obsolete’
So you just change the measuring stick, voila!
‘Fannie and Freddie were both essentially insolvent at the end of 2007′
They actually hit this point in 2005. Think about that: prices hadn’t even really started down and the two biggest companies in the US were broke. That’s how FUBAR this whole setup is.
It’s alleged that Obama raided F & F to cover the Obamacare subsidies.
http://investorsunite.org/obama-administration-use-fannie-freddie-funds-bail-obamacare/
“They actually hit this point in 2005.”
How do you know that, given that like other Ponzi schemes the evil twins didn’t produce financials back then?
“The possibility that households would cut consumption of goods and services as they attempted to meet subprime mortgage payments — touching off a deep recession — was never mentioned in the FOMC meetings surrounding Bear. Thus, failing to pay attention to the poor condition of the Fannie and Freddie mortgage loans was a Fed mistake that compounded the mistake of bailing out Bear Stearns.”
Give-up those new iPhones, 22″ Spinner wheels, Starbucks, etc., or pay the mortgage? Hehe… time to school the fed governors.
Hard to pay for those homes with salary increases like this:
http://www.haygroup.com/en/our-library/infographics/2017-global-salary-forecast/#
” But the land was so precious (north of Dallas, pasture land last year), the houses “‘had” to be 7,000 sq ft.”
It wasn’t so long ago that a 3000 sq ft house was considered huge
Notice that they don’t mention what the consumer needs or wants or can afford.
I see it here in my little burg, almost nothing below $300K is being built, and absolutely nothing below 200K. Who exactly is buying these houses is beyond me, except maybe Denver “drive till you qualify” refugees, and those are on the endangered species list. From what I have seen, price per sq/ft is half here of what it is in Denver.
Don’t worry, there is no shortage of people trying to regulate against building anything except luxury. They like their monopoly and they intend to keep it. Fortunately there are plenty of h1bs and mexicans willing to live 10 to a home and work for peanuts at all the local businesses while the former middle class either packs up and moves away or loses everything. Once the browning process is complete, they can all hunker down in their mcmansions as the cities around them turn into a war zone just like Detroit did. If you listen closely you can almost hear them saying, “so what, we’ll all be dead by then.”
I’d rather not use the process “browning process,” thanks. “Mooching process,” “corruption process,” and “trashing” are just fine.
As for 10 to a house… that still happens, but not in the luxury. You know how people say that in the 50’s and 60’s people used to live in 1000 sq ft ranches? Well, there’s no USED TO about it. Those houses are “still” there, and people “still” live in them, 8-10 at a time.
Say what you will, but the invading hordes are not white.
Boy are you right about that!!! I had to endure booming drums all day today in my Eastside suburb of Seattle. Why? Some festival of color (Hindu?) where people bang on drums (heard easily 3 miles away) and throw colored chalk up in the air and at each other. Right on city hall campus too.
White people are the minority in my neighborhood now.
Embrace the diversity . . . forward!
how many gov housing agencies are there? 12? 20?
is Trumpf chopping them?
The Daily Camera in Colorado. “There’s no affordable homes left in Boulder County. Looking to head east to the Carbon Valley? There’s nothing left there, either, according to a new affordability study out of Longmont. In the last three years, the number of single family homes for sale under $250,000 has dropped 72 percent, and the number of attached dwellings for less than $150,000 declined by 87 percent.”
“The report extends past Boulder County and into Weld and Larimer counties, covering Boulder, Longmont, Lafayette, Louisville, Superior, Erie, Loveland, Berthoud, Firestone, Frederick, Mead and Dacono.”
“Not one of the 12 towns has an average home price under $250,000, the study’s threshold for entry-level affordability. Dacono is the closest, with a $265,363 average cost. For attached dwellings, only Mead was under the $150,000 threshold, with a $128,633 average — data that came from three sales last year.”
This is insane, in most of the communities mentioned above there is empty space as far as the eye can see, especially in Weld and Larimer counties.
And the market is cooling,and fast. Last summer we had some $400K+ houses in the nabe sell fast. Now there are two on the street that are languishing, one has dropped the price $35K and still no takers (and the owner already moved into an even bigger McMansion and now has two monthly nuts to pay). From what I have heard he owes 200K on it, so he has plenty of room to discount even more.
‘empty space as far as the eye can see’
The AZ report cites development west of Phoenix, where they have been getting ready to build 40,000 houses. They could get it done for 100k per shack, but are headed toward 200k and up. It might not sound like a big deal, but entry level incomes will be strained by doubling the prices. If they can convince these people they have to “get in” and they will profit, well that fixes everything doesn’t it? This is simply government backed speculation on a mass scale.
I drove on the 303 awhile back an it looks like a lot of houses are gonna be built off that. I looped into the 17 north of town.
“This is simply government backed speculation on a mass scale.”
And there it is. Absolutely nothing else needs to be said, really.
“Government-Backed Speculation” would be a great moniker for someone here. Maybe I’ll steal it. I’ve never posted as anything other than “MacBeth”. Maybe I’m due for a change.
And the government does not need to back up their actions.
They can destroy the economy at will, with no comeuppance. Destroy the livelihoods of tens of millions. Reduce the stand of living for hundreds of millions.
No personal accountability. None.
This is insane, in most of the communities mentioned above there is empty space as far as the eye can see, especially in Weld and Larimer counties.
It also always interesting to see those developments that get built with hundreds or thousands of houses on tiny lots.
In Denver, yes; in my little burg they have decently sized yards. From what the lunch bunch tell me, they don’t want a large yard, as it’s too much work, as they are all dual income and don’t have any free time.
Captain Cook, Hawaii Housing Prices Crater 13% YoY
https://www.zillow.com/captain-cook-hi/home-values
Captain Cook is where you get Kona coffee, the finest coffee I’ve ever had - although I’m not much of a coffee drinker and at $25-30/lb it will probably stay that way. Lotsa boomers move there with beans in their eyes, hoping to turn their addiction into an income.
Now they have two failed ventures. Falling housing prices and zero demand for coffee at $25/pound.
Dunces.
There will always be demand for that coffee, or any type of coffee for that matter - just look around your office or any corner of this country that has a starbucks, etc. Ability to pay is something entirely different though, but people who are addicts will likely try to cut elsewhere (I’ll get my brakes fixed later!) to feed those addictions. The set of “needs” shifts radically in the addict brain.
I will admit I’m a bit of an adrenaline junky so I see a lot of similarities with substance junkies. I’m pretty good at controlling it and just being aware of it is probably part of that. Just saw a fellow junky a few weeks ago trying to get his car to pass inspection - stacked with surfboards. Car didnt have door handles, lol, among many other deficiencies. Surfboards were quite nice. Been there done that.
Level of demand is founded on price. Look no further than that fact that housing demand is at 20 year lows and falling.
Peet’s is superior to Kona at a fraction of the price.
+1
One of my coworkers bought a place near there for retirement - he’s having a house built on the lot right now. He’ll be growing a crop of something as well, according to his plans.
People may not realize the vog - “volcanic fog” coming from the active volcano there plays hell on your lungs, energy level, etc. Around the time of the last housing bubble a new vent opened up that caused many people to move - some had just moved in and couldnt take it. I believe it contains sulfur dioxide - bad for people, good for plants when the daily rains filter it into the soil. Probably the reason the coffee is so good.
No different that the Fukushima radiation lighting up the west coast.
Care to enlighten us on that, Housing Analyst? Are you an expert in nuclear physics as well?
My dad spent his entire career at a federal nuclear site and was manager of environmental protection for awhile.
Data my good friend. Stick with the data.
Princeville, Hawaii Housing Prices Crater 8% YoY
https://www.zillow.com/princeville-hi/home-values/
“The GSEs are wrapping new sub-subprime mortgages into the mortgage-backed securities they sell to the market. Fannie and Freddie guarantee these securities, and because the federal government stands behind the GSEs, there is little market discipline.”
“… little market discipline.” Bahahahahaha … why should there be ANY discipline at all?
The Fed guarantees - GUARANTEES! - these securities and there are those who marvel over the fact that there is “little market discipline” … bahahahahahahahahahahahaha.
The jokes on this blog are killing me.
Math can be fun: Let’s take an example of a ratio, say, the reward risk ratio.
Reward/Risk ratio. Reward, divided by Risk.
If the numerator (the reward), is some number - any number at all - and the denominator (the risk) is zero then the risk/reward ratio goes to … it goes to infinity.
INFINITY. Infinity because a denominator of zero will go into the numerator an infinite number of times.
Which means there is no risk at all. None. Nada. Zilch. And this means the reward can be infinite.
What restraints are placed on a market where the risk is zero and the reward is infinite?
So banks have rules that say if a loan goes bad they are more likely to have to cover it. No problem, let Quicken make the loan, they aren’t subject to the same rules. Bam, non-banks take the majority of the FHA market share. Now what exactly of Quickens balance sheet? Some paper clips, office furniture. A year and a half ago, Quicken ran ads about getting a lower mortgage payment. Now it’s cash out refinance every time.
I was going to say that they have servers on their balance sheet, but I’ll bet they’re on the cloud. And come to think of it, they probably also rent their office furniture and telecom gear too. That way when it’s time to cut the staff and and shut an office down, there’s no messy liquidation to deal with. You just tell the suppliers to come pick up their stuff.
The last number I read was non-banks with 93% market share. Let’s see. 93% of market with triple damages and not much equity. hmmmm… This time the banks won’t be extorted by the Community activist/DOJ/CFPB like last time. I am betting whole lot of bk’d mortgage bankers if the CFPB tries the triple damage game this time.
What a Fukushima.
“Aside from the obviously devastating effect to potential buyers in lower income groups, the ever-rising prices could change the way real estate professionals and government entities think about affordability. ‘Our measuring stick is about to become obsolete,’ Snyder said.”
—
Bad old days:
Banks ate their bad loans
Bankers went to jail - all the time
Mortgage loans required lots of documentation
Interest rates were 5-12%
20% down-payments were the standard
If you could not afford the house or have a very good chance to pay back the mortgage, on time, every month you didn’t get the loan. PERIOD.
People thought long and hard before they decided to by a house
EQUALED AFFORDABLE HOUSING
—
Good old days of today:
In order to buy votes - lots of votes and to make things fair…
Nearly ALL mortgage loans are guaranteed by the federal government
No one eats bad loans except the taxpayer
Banks make their money by closing on mortgages. The more mortgages they close on - the more money they make
Little to no documentation
3% down-payments
If you can’t afford a house - you can still get a mortgage
Poor credit, no money in the bank, no job - you can still get a mortgage
0-3% interest rates
Banker do NOT go to jail. In fact, they “reward” their government agencies with fat pay and corner offices once they “retire”
People put more thought into dining out than buying a house
EQUALS NO AFFORDABLE HOUSING
Pay off a mortgage in 15 years versus 30 years.
its as simple as credit created out of thin air and given to future home debtors. There is no need to over complicate this.
I switched my 30-yr to a 15-yr 12 years ago. My total loan will end up being 20 years, and I’ve only got $14K left to pay.
Then, I get to rent from the county.
“…and I’ve only got $14K left to pay.”
Don’t plan on a mortgage burning party. Thin-skinned, jealous friends simply can’t tolerate being in the company of someone who isn’t in debt.
3% down-payments
Only if it’s FHA. Conventional loans still need 20% down.
0-3% interest rates
Only if it’s an adjustable loan.
If you’re in the market to buy a home, your down payment is probably top of mind. It’s likely you’ve heard the rule of thumb that you shouldn’t buy a home unless you can put 20% down, however:
-A growing number of borrowers are putting down between 5 and 10%.
-Today, you can put down as little as 3% through Freddie Mac’s Home Possible Advantage product.
http://myhome.freddiemac.com/buy/down-payments-closing-costs.html
Only bigger and bigger government with more and more regulations and higher and higher taxes can make houses affordable…
is that usda rural home loan program still around with 0 down?
Arent VA loans 0 down too?
They just want a body to collect interest from.
Well, you do have to be a veteran to get a VA loan, so it’s not available to everyone. I know of one person with a USDA loan (why the USDA is in the mortgage biz is beyond me) and he lives, predictably, in the sticks
yeah the usda loan is for rural areas but u would be amazed at what is considered rural.
Bottom line in order to take possession of a home and start making interest payments you dont have to have much down at all.
The highly leveraged game continues.
Comment by azdude
2017-03-18 13:08:44
is that usda rural home loan program still around with 0 down?
Alive and well and being utilized along with hundreds of different housing agencies assisting in the down payment etc.
“-Today, you can put down as little as 3% through Freddie Mac’s Home Possible Advantage product.”
According to the website, you need to be a first time buyer and can’t earn more than the median income in your region. It’s even more restricted than an FHA loan.
As a standalone policy, I do not see any problem with the down payment requirement as long as loans are made to people who are likely to make payments. If a person has a higher risk, simply charge him/her more with a higher interest rate. The problem is that it is coupled with poor lending standards and highly speculative components in the market.
The price stabilization should have happened as early as 2015 if it were not for the Home Possible Advantage products, historically low interest rate manufactured by the Fed and Donald Trump’s big promises. Now the rates will be rising (will they?) and living costs are soaring due to medical costs (including insurance) and house price appreciation, let us see how Trump delivers the promised tax reform.
If the new tax proposals are as ridiculous as the replacement proposal for ACA, we will definitely see an immediate market correction in the housing market.
r u “resisting” the 11% s&P gains
!resist!
I got a conventional loan with 10% down and PMI. But this was in 2012. At the time, Fannie/Freddie and the banks were probably desperate for buyers with 800+ FICO scores to fill the holes dug by the subprimes.
If you’re the right buyer a conventional loan with 10% down, no PMI, and 15yr rate of 3.6% is currently available. Jumbo with 10% down, no PMI and 15yr rate of 4.1% also available.
As an update, I torpedoed my house purchase. Appraiser was a stand-up guy and actually came in under, so we put the screws to seller who didn’t budge on price. Walked away and renewed rental house lease. Eyeing a few lots that will decline at least 60% in a downturn based on 2008-2011 numbers.
Appraiser was a stand-up guy and actually came in under, so we put the screws to seller ??
So, do you value the appraisers opinion above your own ??
Oxide- any moving vans in your hood as 20% of feds quit due to the donald ?
so far zero
Their threat to quit was a knee slapper. Like they’re going to quit their cushy, pensioned, layoff proof jobs to work in the private sector without a pension and having to constantly endure the threat of layoff.
Actually quite a few of my co workers have left for higher pay. They don’t like the work, or the policies. some are fairly young; my age. Meh let them go, and try to stay employed for 20+ years. It just lakes my job more secure. But no moving vans yet, although a few for sale signs are cropping up.
http://www.zerohedge.com/news/2017-03-18/signs-silicon-valley-tech-bubble-about-burst
Signs That The Silicon Valley Tech Bubble Is About To Burst
According to the article, all those oh so cool, hip, young engineers who wouldn’t be caught dead working at a dinosaur like HP or IBM are starting to consider working at a place that actually makes money.
Collapse it will, but it’s still got some leg. Still too much money floating around.
If the spigot were to be turned off, the housing market would seize up quicker than a buffalo sphincter in fly season.
Collapse it will ??
LOL…
Did you also lol in 2000/1 or 2008/9?
“It’s a common misconception that FHA loans are only for first-time home buyers. But this is not true. In fact, anyone who meets the minimum guidelines set forth by HUD could qualify for the program. This applies to former homeowners as well as first-time buyers.”
http://www.fhahandbook.com/blog/why-first-time-buyers-use-fha/
Kensington, MD Housing Prices Crater 7% YoY As DC Housing Market Tanks
http://www.movoto.com/md/20895/market-trends/
I see that dc area peak on 1/20
but nvar.com shows feb yoy of 3%+ after flat jan yoy
makes no sense
Remember….. Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.
“Home Prices In The Hamptons Are Collapsing”
http://www.businessinsider.com/hamptons-home-prices-fall-in-q4-2016-2017-1
is your face spray tanned?
Data SkateboardBoi data!
b>Sisters, OR Housing Prices Crater 13% YoY
https://www.zillow.com/sisters-or/home-values/
Cherry-picking data again, HA?
Hey, guess what? I hear that housing demand is crashing in Podunk, ID too . . .
Data my good friend…. data.
“New York City Rents Crash Again In February Under Weight Of So Much Inventory”
http://www.zerohedge.com/news/2017-03-09/new-york-city-rents-crash-again-february-under-weight-so-much-inventory
Rock ‘n’ roll legend Chuck Berry dies at 90
By HILLEL ITALIE and JIM SUHR, AP / 6:57 pm ET Sat Mar 18, 2017
NEW YORK (AP) — Chuck Berry, rock ‘n’ roll’s founding guitar hero and storyteller who defined the music’s joy and rebellion in such classics as “Johnny B. Goode,” ”Sweet Little Sixteen” and “Roll Over Beethoven,” died Saturday at his home in an unincorporated area west of St. Louis. He was 90.
Chuck Berry - Roll Over Beethoven
https://www.youtube.com/watch?v=zD80CostTV0
I suspect that Beethoven will be remembered long after Berry has been forgotten.
True…but Berry will be remembered long after most.
Affordability= demand side stimulus to drive prices to astronomical, historically astronomical multiples of income
Dumn and off-topic question of the day:
At what point will God feel sufficiently enlightened to order the LDS prophet to give gays the priesthood?
Gays have always been in the priesthood of each and every religion. Now, more than ever.
Do you ever get a the feeling that your life is playing out against the backdrop of the greatest financial scam in history, orchestrated and executed by the global central banking cartel?
“William Poole”
Jeopardy question:
What is an honest central banker?
Answer 1: An honest man.
Answer 2: A retired central banker.
Hillary Clinton is ready to come out of the “woods.”
Did she bury the new bodies? Real estate news from China:
http://news.xinhuanet.com/english/2017-03/18/c_136139085.htm
Wouldn’t it be hilarious if she failed to be elected mayor of NYC?
Could happen, she could be defeated in the primary
“The GSEs are wrapping new sub-subprime mortgages into the mortgage-backed securities they sell to the market. Fannie and Freddie guarantee these securities, and because the federal government stands behind the GSEs, there is little market discipline. Think about that: With regard to subprime mortgages we may now be in worse shape than we were before the crisis.”
Is Oxide sticking with the Democratic party line that this time is different, due to no subprime lending (government guaranteed and securitized or other)?
is quicken the next tan man?
“According to the Fannie/Freddie annual reports for 2016, it is surely the case that subprime mortgage issuance is one force driving house prices once again — up by about 30% over the past four years and now about back to the elevated peak in 2006. Why isn’t the Fed talking about this matter? Someone please convince me that ‘this time is different.’”
He raises a great question, especially given the Fed’s 2012 intervention to deliberately prop up home prices. Given their complicity, you would think they would want to track the progress of this evolving situation.
But I expect the Fed will continue viewing the subprime-fueled Echo Bubble with a blind eye.
their job is to get you to pay more. Can u dispute that?
The only way this system works is if prices go up.
Wheat Ridge, CO Housing Prices Crater 11% YoY
https://www.zillow.com/wheat-ridge-co/home-values/
hitting the spray tan booth today?
Oh dear. While Obama and Comrade Pelosi were all about “forgiveness” of student loan deadbeats, 99% of whom are entitlement voters, Trump might not be so accommodating.
http://www.zerohedge.com/news/2017-03-18/student-loans
Trump should purge the federal government of all employees who are seriously delinquent on their student loans. Sack ‘em.
China’s housing bubble is still inflating, but at a much slower pace.
http://www.scmp.com/business/article/2080160/chinas-february-home-prices-rise-flat-pace
-> “Fannie/Freddie have redefined ’subprime’ to a credit rating of below 620; previously, these firms and banking regulators had used 660 as the dividing line that defined a subprime borrower.”
–
Interesting. In addition, a few days ago they were talking about how the credit scoring agencies are about to change their scoring rules to improve people’s FICO scores — in some cases, making risky borrowers appear less-risky.
So, they are going to raise everyone’s FICO scores, and at the same time, lower the FICO score requirement to get a prime loan. Is that right?
It seems like the big banks + Fannie + Freddie want back in the subprime game, but to do that, they are changing the rules and definitions so it’s not technically subprime anymore. I guess the big banks don’t like the Quickens and Ginnie Mae taking all the spoils.
“So when faced with actual facts about declining real wages, collapsing Q1 GDP estimates, disappointing retail sales and a wild and woolly fiscal process ahead, the Fed chairman defended the third rate hike in 11 years by saying that the “data is noisy.”
http://www.zerohedge.com/news/2017-03-19/david-stockman-offers-more-proof-janet-yellens-idiocy
Yes. The data-dependent Fed says the data is noisy. Oh no, that sucks.
azdude ??
I will try and keep this brief since its off topic;
Regarding Motor Homes vs. 5th Wheel….
I have owned five Motor Homes since 1979…4 Class A’s and 1 Class C…Never owned a 5th wheels but have many friends that do…
Class A provide a better view of the scenery and road…Class C is easier to drive…
If you the type that wants to move around a lot visiting a lot of different places the Motor Home is the way to go…Lots of convince also like going to the bathroom or throwing a meal in the Micro…Its also much better if you have children…
If you are more inclined to stay in one place for long periods of time, then 5th wheel provides a much better bang for the buck and more roomy living quarters…
sweet thx
Im out looking at 50k trucks today.
A long wheelbase, turbo-diesel is the best for towing, IMHO.
Yes, but these days with the extremely problematic diesel emissions systems, combined with the additional initial cost and reduced fuel economy (due mostly to the emissions) when compared to diesel trucks 10-15 years ago, there is not nearly as strong of a case to be made for choosing diesel over gas.
I would still choose diesel if one is putting a lot of miles on, but if it isn’t going to get used that much (say, under 10K miles per year or so), if you do the math, you’ll find that you’re much better off with the biggest gas engine that you can get.
chuck berry may be gone but eskew reeder was friends with little richard…….
https://www.youtube.com/watch?v=jjJ6okMLGDs
“Debt is easy to create but eventually folks cant earn enough to make the minimum payments and the credit cycle reverses.”
It’s all good as long as “the flock” collect their commissions.
Gold is calling Yellen’s bluff.
https://www.bloomberg.com/news/articles/2017-03-17/gold-explorers-set-for-17-s-best-week-as-moribund-metal-stirs
High-income millennials use their buying power on luxury homes
By Michele Lerner March 16
Millennials Dan and Diana Stoltzfus, the owners of a nearly $1 million mansion in Great Falls, Va., are among a small but growing number of young people in the Washington region who have the means to buy a luxury home.
“We owned a condo in Glover Park and wanted to buy a house so we could start a family,” said Diana Stoltzfus. “Everything we found in the city was small and would need renovation or an addition, so we started looking at Potomac and Great Falls for something that would fit in our budget of around $900,000. The house we found in Great Falls was originally priced at $1.1 million, but it had been on the market for almost a year, so we were able to buy it for just under $1 million.”
A surprisingly high number of millennials around the country and in the Washington region earn a high enough income to afford a $1 million residence. According to research by Zillow, Arlington has more millennials with a household income of $350,000 or more than any other jurisdiction in the country, with 8.7 percent of millennials among that wealthy cohort.
The District is also on the list, tied at eighth place with New York City, both places where 2.8 percent of millennials have a household income of $350,000 or more.
“There are lots of dual-income young couples in the D.C. area with high levels of education and good jobs who together can afford a luxury home,” said Jeff Detwiler, president and chief operating officer of Long & Foster Real Estate in Chantilly.
https://www.washingtonpost.com/realestate/high-income-millennials-use-their-buying-power-on-luxury-homes/2017/03/14/b63924d0-9d59-11e6-9980-50913d68eacb_story.html?utm_term=.17ed81d6360b
They look like such happy, smart people.
It’s the Washington Compost. Garbage in garbage out.
Yeah, what Bezos wants people to read. They should have included links in those interior house pictures for all the stuff available on Amazon…
“They look like such happy, smart people.”
The crying bassinet and dead-bedroom should wipe-away that smile.
“A common challenge for even high-income earners is coming up with the cash for a down payment. Even a low 5 percent down payment on a $1 million purchase is $50,000, and a 20 percent down payment would be $200,000.”
FWIW, I put down $50k on a $125k home purchase.