Growing Inventory And Declining Prices
A report from the Credit Union Journal. “With the housing crisis and the recession firmly in the rear-view mirror, more and more credit unions are looking for ways to help consumers qualify for home loans — even if that means accepting a significantly lower down payment than might ordinarily be required. One example is Orange County’s Credit Union, a $1.5 billion institution based in Santa Ana, Calif., which has unveiled two new products designed to help consumers purchase a new home in a very tough housing market. The products — a conventional loan with zero down payment and a loan with 3 percent down — allow borrowers to qualify for a home for basically little or no down payment. ‘While members wait to save for these large down payments, the price of homes continues to rise,’ said Carlos Miramontez, vice president of mortgage lending at OCCU. ‘We refer to this as the ‘cost of waiting.’”
“The zero-down and 3 percent down home loans help eliminate this barrier, he added. Moreover, the 3 percent down mortgage can be used for a loan amount up to $850,000. On the other side of the country, the biggest credit union of them all, the $82 billion Navy Federal Credit Union of Vienna, Va., has offered a similar product at Orange County’s Credit Union.”
“Kevin Parker, assistant vice president of field mortgage at Navy FCU, noted that VA loans have provided veterans and active duty members with a ‘zero-down’ mortgage option for many years. Navy Federal itself has also offered a ‘HomeBuyer’s Choice’ mortgage product with zero down and has even offered ‘jumbo mortgages’ with a zero-down option for at least a decade.”
From Fox 17 in Tennessee. “Real estate experts called Nashville’s housing market pace unprecedented, after data shows mid-state homes are selling nearly 50 percent faster than last year. Managing broker/owner Debra Beagle said competition is stiff at all price points with low inventory. Many millennials are keeping up with parents putting down their refinanced homes. ‘Pulling equity from their homes and giving their kids cash to even be competitive in the multiple offer situations,’ Beagle said.”
From Bloomberg on Connecticut. “Luxury-home listings in the Connecticut town plunged 31 percent from a year earlier, according to a report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. That’s largely because sellers who failed to get their hoped-for price quit trying to find buyers and took their properties off the market to wait for a better day.”
“‘When there’s too much to choose from it takes off the intensity of the buying process,’ said Scott Durkin, chief operating officer of Douglas Elliman. ‘It doesn’t give you any sense of urgency and it doesn’t get you off the fence.’”
From Free Malaysia Today. “A property named by the United States Department of Justice (DoJ) in its civil forfeiture suit last year to seize assets purchased with funds allegedly embezzled from 1MDB, is now up for sale, the Wall Street Journal reported. A luxury penthouse in New York City, which was sold for a record price of US$51 million (RM215 million) in 2014, is about to be listed again but with a much lower price of US$45 million, the report said, citing people with knowledge on the plans.”
“Quoting an employee with the company listing the property, the WSJ reported that the unit is now priced to move. The owner had reportedly tried to sell the unit for US$70 million in 2015, and had even dropped the price to US$55 million at a later date, before the US DoJ civil suits in July 2016. ‘It’s a pedigree apartment, one of the best in the city, but the market is arguably a bit weaker on the luxury end,’ the employee said, adding that he did not know why the owner wants to sell.”
From The Real Deal on Florida. “Greater Downtown Miami’s preconstruction condo market has surpassed the halfway point, with over half of the more than 10,000 units in the pipeline now completed. And due to the growing inventory of new condos, resale pricing continues to fall in the urban core, according to a new report. Resale prices, which rose in 2012, 2013, 2014 and 2015, fell beginning in 2016 and continued dropping through the second quarter of this year. Existing inventory sold for about $400 per square foot mid-year 2017, compared to the peak of $457 per square foot in 2015, according to the report.”
“The Downtown Development Authority’s Mid-Year Residential Real Estate Market Study shows 5,180 units have been delivered since 2012 and 5,078 units are under construction. May was the best month for closed sales in two years as sellers adjusted to the market. More than 140 existing units sold in May and 160 were pending, the report shows. Growing inventory and declining prices have led rents to drop, as well.”
From the Kenbridge Victoria Dispatch. “Lunenburg Realtor Sidney Smyth Sr. said it’s still a buyers market. ‘Stuff is selling, but it’s gotta be priced right,’ Smyth said. ‘Price is still everything. If you price it right, you can get some activity, if it’s not priced right it just sits there, which is indicative of all the real estate signs that are starting to rust in the county.’”
From Chicago Magazine in Illinois. “Twenty years ago, Hinsdale was the poster child for the teardown trend, garnering national attention as monstrous McMansions stomped out sweet 19th-century homes by the dozens. More than half of the housing stock in Hinsdale has been replaced since the late ’90s, estimates Jean Follett, a historic preservation consultant and former Hinsdale trustee. Residents who lamented the lost charm, though, are having the last laugh. The housing market in the tony western suburb is stagnating. One theory: Some of those now-dated homes aren’t budging.”
“It’s a rough combo if you’re trying to unload a house, says real estate broker Alex Haried, who lives in Hinsdale. Because the prices are high, he explains, developers and flippers can’t come in and make updates —the way they do in nearby Western Springs and Elmhurst—which would make a house sell quickly. The ennui in the market shows in sale prices: While the median list price in September was $1.14 million, the average sale was a precipitously lower $750,000 (which leaves room in high-roller budgets for new quartz countertops).”
The Record Searchlight in California. “What some say are the last remnants of the decade’s-long foreclosure mess is still funneling through the local housing market. While foreclosure activity is a whisper of what it was at the peak of the crisis six years ago, a national database reported Wednesday that Shasta County had the third-highest foreclosure rate in California in the third quarter of 2017.”
“One in every 439 homes was in some stage of foreclosure, ATTOM Data Solutions, formerly Realty Trac, said. Only Kern County (1 in every 334 homes) and Riverside County (1 in every 431) had higher foreclosure rates in the third quarter, which covers July through September.”
“‘When people are wondering why are foreclosures still taking place, they have to understand this is one of the last bad loan products now cycling through the market,’ said Josh Barker of ReMax Town & Country in Redding. ‘The majority of these loans are interest-only that are now resetting . . . and people can’t afford the higher payment.’”
“And unlike many other areas of California, home values in Shasta County have not rebounded from their bubble peak, so these underwater families can’t afford to sell.”
From Bridge Michigan. “Sifting through a stack of letters on her kitchen table from a reverse mortgage company, Linda Pryczynski recalled how the nightmare began. In 2007, her husband Warren took out a reverse mortgage on their modest duplex to pay off the remainder of an old debt of $100,000, a loan for a truck and for household expenses. ‘My husband saw it on one of those TV commercials that’s on all the time,’ the Muskegon resident said. ‘He thought it would be a good idea.’”
“Her husband died in 2016 at age 94, leaving behind tax and mortgage debt Pryczynski said she couldn’t possibly pay off. Facing foreclosure, Pryczynski filed for bankruptcy earlier this year and fears the prospect she could lose her home. That’s because she was not named in the reverse mortgage – a home loan available, and marketed to, older Americans – leaving her no protection at the time of his death.”
“Karen Tjapkes, her attorney, said the original loan on their duplex has ballooned with interest and other fees, from $148,000 to $216,000. Pryczynski also owes roughly $11,000 in back taxes, much of which were paid by the lender. ‘I can’t possibly pay $216,000,’ Pryczynski said. ‘I supposed I could move to my daughter’s place in West Virginia. But that’s not my home. This is my home. It would tear me apart if I had to leave.’”
“She’s hardly alone. Advocates for Michigan seniors like Pryczynski say that reverse mortgage foreclosures are on the rise – even as traditional mortgage foreclosures are falling – reflecting a disturbing national trend. ‘I’ve been seeing a surge in these cases,’ said Joe McGuire, a lawyer for Michigan Legal Services, a Detroit-based nonprofit that fights to keep seniors threatened by foreclosure in their homes. ‘A lot of times seniors don’t understand what they are getting into.’”
“Federal analysis shows these foreclosures are on the rise. The U.S. Department of Housing and Urban Development – which insures reverse mortgages through the Federal Housing Administration – says nearly 90,000 reverse mortgages in the U.S. were at least 12 months behind in paying taxes and insurance last year and could be expected to result in ‘involuntary termination.’ That is twice the number of the previous year.”
“According to the report, nearly 1-in-5 reverse mortgage loans taken out in the U.S. from 2009 to June 2016 are expected to go into default because of unpaid taxes or insurance.”
Oh dear…
‘5,180 units have been delivered since 2012 and 5,078 units are under construction. May was the best month for closed sales in two years as sellers adjusted to the market. More than 140 existing units sold in May and 160 were pending’
‘While members wait to save for these large down payments, the price of homes continues to rise,’ said Carlos Miramontez, vice president of mortgage lending at OCCU. ‘We refer to this as the ‘cost of waiting.’
Dang Carlos, that’s a catchy line. Gets them at a gut level. Urgency, fear of missing out, all wrapped up in a short phrase.
“Don’t get schlonged!”
– Carlos Danger
Zillow has a decent mortgage calculator. What’s great is that they calculate and include taxes and insurance based on rates at the location.
So it’s easy to look up any $850K house in Santa Ana, CA, to see what the total PITI is. At 3% down and 3.7% interest, the total nut is $4935. Every month. For 30 years.
$5K a month for a house in freaking Santa Ana, where 78% of the population is Hispanic. 850K to live in a barrio. It’s also one of the few cities in Orange County where the majority of voters are registered Democrat.
And we wonder why democrats love illegal immigration, voter fraud and the free sh*t army.
Slavery makes the masters rich.
Rent it for half the monthly cost. Buy it later after prices crater for 75% less.
I wouldn’t buy in Santa Ana for 90% less.
Didn’t know they had the taxes right,reactors must hate that
You have to ask yourself, are the taxes based on the current assessment, or what they would be if you paid the wishing price.
Reactors=realtors
Zillow has one value for neighborhood and another for predictions
Looks like the taxes are based on the wishing price. But you can change it.
Just go to any house in the desired area, click on the “Mortgages” category and then click on “advanced.” A mini-calculator will show up with the asking price, current interest rate, 20% down, and tax rate pre-filled. You can tweak the numbers to yield a pie chart of the monthly nut. If you put in less than 20% down you can check the box to calculate PMI too.
“the total nut is $4935″
I’m thinking that won’t be for 30 years. We’ve at least learned that the person who can actually afford that will walk away in a heartbeat. The average FB will simply be ruined.
PITI around $125 here, plus the relentless depreciation. I’m still watching you bubble heads, but off on my own brand of crazy. Sold the dock this week. Next season I’ll just be a drifting river rat.
Interested in what kind of boat you have, and how you’re able to live so cheaply. I’d love to live on one, but the maintenance, repair and fuel costs, not to mention moorage are absolutely outrageous around here.
The cost above is for keeping my modest house/studio. The boat is a seasonal thing.
Now my “mooring” expense will be the $75 per year permit in the NY Canal system. Maintenance is not too bad. It wouldn’t amount to much based on my pay scale.
I know this is just a silly data point…
But still, that is about a 25% haircut wish price.
In bubble central NYC during the peak crazy bubble years.
+++++
The Largest Residential Foreclosure Auction In NYC History Is Back On
ZeroHedge - Oct 19, 2017
Back in June, we introduced you to Nigerian oil magnate, Kola Aluko, the mysterious (now former) owner of Unit 79, a penthouse in Manhattan’s ultra-luxury One57 tower, one of several buildings clustered around Central Park that comprise Manhattan’s “Billionaire’s Row.”
Aluko bought the 6,240-square-foot, full-floor penthouse in December 2014 for $50.9 million, concealing his identity with an LLC. At the time, it was the eighth-priciest in the building. But after taking out an unusually large ($35.3) mortgage with an even more unusual (one year) term the following September, Aluko defaulted, and his condo went into foreclosure - what will likely become the largest foreclosure sale in New York City history.
Foreclosure proceedings were started in January. The unit was put on the market for $39 million, according to Bloomberg, with a StreetEasy listing describing the owner as a “MOTIVATED SELLER!!!”
‘In 2007, her husband Warren took out a reverse mortgage on their modest duplex to pay off the remainder of an old debt of $100,000, a loan for a truck and for household expenses…her attorney said the original loan on their duplex has ballooned with interest and other fees, from $148,000 to $216,000. Pryczynski also owes roughly $11,000 in back taxes, much of which were paid by the lender. ‘I can’t possibly pay $216,000,’ Pryczynski said. ‘I supposed I could move to my daughter’s place in West Virginia. But that’s not my home. This is my home.’
Apparently not Linda or you wouldn’t be gathering boxes. From the article:
‘over the past decade or so a parade of older celebrities including former U.S. Sen. Fred Thompson and actors Robert Wagner, James Garner and lately, Tom Selleck, have pitched the merits of a reverse mortgage to those 62 and older in TV ads.’
“I know what you’re thinking,” Selleck says in one ad for California-based American Advisors Group (AAG). “I thought what you thought. … Just like you, I thought that reverse mortgages had to have some kind of catch. Just a way for the banks to get your house, right?”
Warren took out NEW DEBT to pay off OLD DEBT.
And ended up putting his family into MORE DEBT.
Math question:
What is the common denominator?
+++
‘In 2007, her husband Warren took out a reverse mortgage on their modest duplex to pay off the remainder of an old debt of $100,000…
“…Warren took out NEW DEBT to pay off OLD DEBT….”
And the OLD debt was probably unsecured.. At worst, a depreciating truck would be repossessed.
That reverse mortgage salesmen must of been *really* smooth.
I don’t get this bit about not being on the loan. Just pay it Linda. What happened to the rent you were getting from the duplex?
I hear West Virginia is nice this time of year.
She couldn’t even be bothered to pay the taxes let alone the note. I once knew a retired woman who was in foreclosure and still went to get her nails done at the salon once a week. Linda probably has similar priorities.
This doesn’t sound like a “reverse mortgage” to me. It sounds an awful lot like a “Cash-out refinance and restart the 30-year clock.”
And of course, an 80+ year old does not have the income to make payments on a 30-year mortgage. DUH. That’s why people purchase houses when they’re young. So that they don’t have to pay a mortgage at retirement, when their income takes a nosedive.
I wonder what the “old debt of $100,000 was for.” Medical? That’s the only debt I can think of that would be so high.
“I supposed I could move to my daughter’s place in West Virginia. But that’s not my home. This is my home.”
Not anymore. The Dotted Line Special, doin’ God’s work.
Bahahahahahahahahahahahahahahahahahahahahahahahahahahahaha.
‘Pulling equity from their homes and giving their kids cash to even be competitive in the multiple offer situations,’ Beagle said.’
“I borrowed the money to help my kid win a bidding war! This is my home!”
What a disastrous idiotic thing to do.
A wise man once said, “a mortgage is the most accurate indicator of financial insufficiency and indigence.”
‘Pulling equity from their homes and giving their kids cash to even be competitive in the multiple offer situations,’ Beagle said.’
That done beats all, that there.
Boomer guilt is quite pliable.
Stories like this make me glad I never had children. Kids used to be an 18-22 year commitment. Now they appear to be a 50 year commitment. No wonder those boomers can’t retire.
Stories like this make me glad I never had children. Kids used to be an 18-22 year commitment. Now they appear to be a 50 year commitment. No wonder those boomers can’t retire.
It’s whatever you say it is. If the boomers have no boundaries that’s their problem.
Having said that, I think it is a lifetime commitment. But shouldn’t be a lifetime financial commitment if you do your job right. Of course plenty can go wrong though.
Stories like this make me glad I never had children.
Contemplate the scenario if your mother felt the same way.
Precisely. Yet Donk Craterton and millions of others, in a moment of rash thoughtlessness, signed up for a lifetime of hardship and decided to rent a house from the bank.
And what is telling to me about Sellick et al (thinking the Roaslind Capital Gold guy whose name evades me at the moment) is the fact that they DON’T have to do a reverse mortgage on their tony estate.
They hypocrisy in all this is just epic.
By the way another article for 2B in the Chicago Tribune on how Mayor Rummy’s tax hike will plug an ever increasing debt with the equivalent of bubble gum.
Party on Chicago - party on.
“The hypocrisy in all this is just epic.”
Wikipedia on hypocrisy:
“American historian Martin Jay in The Virtues of Mendacity: On Lying in Politics (2012) explores how writers over the centuries have treated hypocrisy, deception, flattery, lying and cheating, slander, false pretenses, living on borrowed glory, masquerading, conventions of concealment, playacting before others and the arts of dissimulation.” …
and now for the punch line …
“He assumes that politics is worthwhile, but since it is unavoidably linked to lying and hypocrisy, Jay concludes that lying must not be all that bad.”
I’m with this Martin Jay guy in that if lying and hypocrisy will lure a puke into a bank to sign a dotted line or two then lying must not be all that bad.
Hypocrisy and lying; just a set of tools that happens to be useful in carrying out God’s Work.
Casually Machiavellian.
“The most important thing is sincerity. Once you can fake that, you’ve got it made.” — various attributions
Fred Thomsons commercial was the best, featuring the line “Its what Ronald Reagan wanted for the country”.
$5 says ol Warren raced to the phone to perform his patriotic duty to create more debt for himself. God Bless America!
I hear so many stories about the elderly being swindled like this. I wonder if I’m ever going to be in that situation.
I’m thinking about my generation… If/when I’m watching TV when I’m 70 and an elderly Tom Cruise, or Ben Affleck, or Ben Folds, or Jerry Seinfeld, or Leo DiCaprio, or even Rick Astly or JJ Abrams try to sell me some reverse mortgage, would I believe them?
Just another reason to not be plugged into a TV.
What’s sad is that ol Warren never discussed this with his wife or set up scenarios about who dies when and what will happen. For some reason old people don’t like to discuss financials or communicate about anything. Is it a generational thing where ‘Man takes care of finance and woman cleans the house’?
My inlaws are like that. Never talk about anything, never discuss financials, won’t discuss their will or wishes when they get older. Why? Not sure.
“Its what Ronald Reagan wanted for the country”.
And it’s true too. When Reagan was CA governor he was an early advocate for lower lending standards to “help” people get on the so-called housing ladder.
Nixon sacked the Bretton Woods system, and Reagan liberalized credit.
“In 2007, her husband Warren took out a reverse mortgage on their modest duplex to pay off the remainder of an old debt of $100,000, a loan for a truck and for household expenses…”
So that’s what’s driving vehicles to insane price levels.
Today’s math question:
What is the difference between median and average?
And can one or two high or low data points throw off an average?
Or does it mean the people listing are “not going to give it away” while the people actually selling are “getting out while the exit door is still open?”
++++
While the median list price in September was $1.14 million, the average sale was a precipitously lower $750,000 (which leaves room in high-roller budgets for new quartz countertops).”
Math is a Mean subject.
drops the mic
I just thought it a just above average joke myself…
I was told there would be no math.
Speaking of which, I finished my last college real estate class the other day and got all my application stuff sent in to take the state exam later. Kinda nice that fingerprinting no longer results in dirty fingers.
The instructor took great pains for the last 12 weeks to reassure the students that there would be no math on any of the tests. Turns out what he meant was “if you memorize all the facts and answers I’m giving you, you won’t need any math”. Math is actually quite helpful if you’re trying to actually understand what you’re being asked rather than memorize. At least on the 3 college level exams prior to the state exam.
“The zero-down and 3 percent down home loans help eliminate this barrier, he added. Moreover, the 3 percent down mortgage can be used for a loan amount up to $850,000.
Nothing screams subprime more loudly than 3% down payment mortgages.
How about 0% down?
How about 0% down AND you get a buyers tax credit? I know someone who did that after the previous crash.
And firmly underwater like you and everyone else.
Ooooph.
2banana’s Rule:
Long term democrat rule + public unions + free sh*t army = misery, ruin and bankruptcy
The real solution for Hartford’s comeback:
1. Declare bankruptcy
2. Tear up all public union contracts and pensions
3. Ban all public unions
4. Throw corrupt democrat leaders in jail
5. Cut taxes to the bone
6. Watch city grow and blossom as working people and businesses flock there
++++
Moody’s Warns of ‘Likely’ Hartford (CT) Default, Decades of Deficits Ahead
Hartford Courant - 10/19/2017
Moody’s Investor Service issued a dire warning to lenders Thursday: Hartford will likely default on its debt by November and, if the city does not change course, will run up annual deficits exceeding $60 million through the next twenty years.
On Sept. 26, Moody’s downgraded the city’s bond rating to Caa3 from Caa1, reflecting the investor service’s belief that “in the likely event of a default, bondholder recovery will be 65%-80% of principal,” it stated Thursday.
Moody’s projects the city’s operating deficits will reach $60 million to $80 million per year through 2036, largely driven by fixed costs, which command 23 percent of Hartford’s 2018 budget, according to a Moody’s analysis. Those fixed costs include pension contributions, benefits, insurance and debt service.
High labor costs stem from “decades of contractual salary increases and employee benefits,” Moody’s wrote, and those benefits — which include health insurance, pensions payments and workers compensation, among others — are expected to increase by $21 million in 2018. Moody’s found that benefits and insurance costs have increased 6 percent each year for the last 10 years, compared to an annual increase of just 2 percent in the urban consumer price index during the same period.
Bronin has said that Hartford will run out of money by Nov. 6 if it does not receive state aid by that date.
The General Assembly, which has yet to approve a state budget, is considering a bail-out for Hartford that could help the city avert bankruptcy.
Wikipedia: “Hartford is nicknamed the “Insurance Capital of the World”, as it hosts many insurance company headquarters and insurance is the region’s major industry.”
Insurance = massive amounts of OPM. These pukes who live in the “Insurance Capital of the World” are at the edge of bankruptcy.
Sumtin’ to think about.
“… insurance is the region’s major industry.”
The insurance industry used to make boatloads of money as a return on the float, and now it doesn’t; Now nobody doesn’t.
The War on Savers, in its many forms, continues to take its toll.
All of my insurance premiums have been rapidly increasing despite a lack of claims or any other events.
Think of insurance premiums as taxes without approval.
Mayor Blocked By Supreme Court From Continued ‘Double-Dipping’
By JON LENDER
July 5, 2017
The state Supreme Court has dismissed East Haven Mayor Joseph Maturo’s effort to collect a pension stemming from his years on the town’s fire department while also being paid his current $90,000 salary as mayor—upholding a lower-court judge’s ruling on a high-profile case on the issue of pension “double-dipping.”
Maturo won the 2011 election, and, less than two weeks later, his pension payments were discontinued.
Maturo, 66, has remained mayor since then, and he’s argued that he’s still entitled to collect the pension while he’s mayor the second time around—because, he says, the mayor’s position isn’t part of the municipal employees retirement system, as are other East Haven jobs, such as firefighters.
http://www.courant.com/politics/government-watch/hc-lender-maturo-double-dipping-20170705-column.html
When those in charge are part of those criminal that benefit from robbing the taxpayers, there is not much hope.
Southeast Bend, OR Housing Prices Crater 12% YOY
https://www.zillow.com/southeast-bend-bend-or/home-values/
And a how-to refresher than will be included with every post.
https://snag.gy/m5EzRB.jpg
Thank you for this!
Thank our good friend Karen.
Karen is cool. Thank you, Karen.
You’re all welcome!
So many people, even on this blog, in denial and constantly throwing shade on all the work Senior Housing Analyst does to hunt out the localities that are c r a t e r i n g.
So much rage.
So many people, even on this blog, in denial and constantly throwing shade on all the work Senior Housing Analyst does to hunt out the localities that are c r a t e r i n g.
Admit it, you live in the same house as a construction guy in New England, right?
Oh that’s fracking precious, Karen . . . is that you HA?
It’s just me. Living in your empty skull, rent free.
Thanks for this. Zillow weaves a tangled web.
While the median list price in September was $1.14 million, the average sale was a precipitously lower $750,000 (which leaves room in high-roller budgets for new quartz countertops).”
———————-
It BETTER have a Quartz countertop!!! I mean, what would my neighbors think if I had Granite!!! That’s sooooooo 2014! What do I look like? An unwashed heathen renter?
Until you have pure cubic zirconia counter tops you really haven’t lived.
Is it a genuine Diamelle?
Dunno.
But atop the countertops sits coffee made with only the finest cat turds.
#MuhRussia was all a big nothing burger.
Hillary committed Treason.
Will prices ever go down to 2011/2012 levels?!
Yes. Whenever housing cycles again.
There is no “permanently high plateau”.
Hopefully lower Naples!
“Will prices ever go down to 2011/2012 levels?!”
I don’t claim to know but I can tell you that I bought my current place in 2012 when I realized prices were not going back to 1999/2000 levels anytime soon.
The prices dropped like a rock from 2007 - 2009 and then (IMHO) TPTB put a floor under them. Foreclosures stopped, people lived in houses for years without making a mortgage payment, houses sat empty in decent hoods for years and all I could get the banks to tell me was they were still owned by the person being foreclosed, HARP, Robo signing blah blah blah.
Now if one year from now prices were back at 1999/2000 prices I would not be shocked in the least.
All is not well in our former ‘hood:
http://www.zerohedge.com/news/2017-10-19/owners-luxury-greenwich-homes-are-pulling-them-market-sales-plunge
They’re not going to give away those back country “estates”, lol.
The article mentions “beautiful beaches”. Huh? Tod’s Point is ok, but I’d hardly call it beautiful.
“All is not well in our former ‘hood:”
Doesn’t look that way does it, although it appears the slums of OG have one ready to close north of 1.
I will let you know.
Good on ya, cobber!
“Now if one year from now prices were back at 1999/2000 prices I would not be shocked in the least.”
I hope you’re right. I got faked out on the last go-round, where 2011 prices were as good as it gets, for now. That was “declinus interruptus”.
Anxious for an excuse to pay way too much for a house? Going to go for the big loan? Maybe you are the next wave. There will be fewer each time. It’s like bounding down a flight of stairs.
Lone Tree, CO Housing Prices Crater 7% YOY
http://www.movoto.com/lone-tree-co/market-trends/
Is it fair to say that those who insist that the MID has no effect upon home sales above 200,000 Dollars kind of glosses over the fact that the housing bubble is a mania event driven by impulse and emotions rather than by financially sound motives/
Is the MID Sort of like when a middle class, ‘educated woman’ in the 1970’s drives 30 miles to use a Green Stamp to get a reduced price on a bag of potato chips. [True story.] You would think that the cost of gas would be a deterrent, but, you’d be wrong. Those Green Stamps had a power all their own.
It’s surprising to me that people who recognize that Filipinos paying grossly over-inflated prices for shacks in California with zero down loans is a part of a mania driven event propelled by the greed of making money or achieving a certain social status, while at the same time, downplaying the effect the MID has upon the mania when words are thrown about by Realtors and tax experts such as, ‘If buying the points lowers your payment by 250 a month, you’ll have to stay in your home for at least 16 months to break even. After that time passes, you’ll start putting money back in your pocket’.
‘Putting money back in your pocket’… that’s a huge part of the drive, it’s also likely why the Goodwill thrift stores in wealthy areas have such an abundance of goods and seemingly have more foot traffic per square inch than Walmart. The wanna-be wealthy are lining up in droves to drop off their junk in order to collect that tax-deduction receipt to add to their itemized deductions.
Have you ever dropped stuff off at a Goodwill and noticed how important that receipt is to the people in front of and behind you in line.
Psft, have you noticed there’s lines to drop stuff off, and wondered why that is/
It may not seem like it does not matter much for those in the 25 percent bracket that they’ll save only 100 in taxes for paying 10,000 in interest, unless of course, it’s about a mania - and - there’s a very fine line at selling time, or tax time, between coming out in the red, or in the black. Which, ahem, the fine line in many instances is very fine, and that 100 plus is what is used to fund the payments for clothes, gasoline, vacations… or those two or three hump payments for that home equity line of credit which is such a drag.
But of course, the MID probably is insignificant and no one who owes on a home over 200,000 is ever house poor and stretched a bit beyond their means looking for any shred of savings to stay afloat, I mean, at just about every single estate sale I go to in the over 200,000 neighborhoods the home-ower seems house poor and the stuff in the house is usually all worthless particleboard crap and overpriced worthless junk in comparison to older more established homes under 150,000 filled with many and sundry quality goods. …Oh wait.
And yeah, those in the 15 percent bracket can learn, after quite a bit of digging, that the home-ower, or potential home-ower, can see that they only save 15 dollars for every 100, funny thing is though, in the mania, things are not presented that way. The Joe-Average just hears all about how you can ‘write-off, this’ or deduct, ‘that’. It fuels the drive of the housing mania, immensely. [Stretch your budget 25,000 more so you can get that tax benefit. I wonder how many times that's used as a justification for buying more than you should/] Plus, it’s a part of why the TeeVee is loaded with commercials trying to get people to buy cars with their tax returns. Heck, it seems like it’s a business model for some car dealerships and furniture stores.
The tax write-off, might not be much, but the idea fuels a rocket. Manias are funny that way. That’s my take from the bottom, anyway.
In the samples I looked at [just my recollection, I wasn't focusing on them] in the under 120,000 houses the tax assessed value was, more often than not, quite higher than the current asking prices, while the houses which were over 200,000 were more often than not, almost exactly matching the current asking price. Someone smarter than me can say if that helps to prove or disprove my point.
I think you’ve hit the nail on the head with this narrative. So many people I know get stuck in the “thick of thin things” when it comes to the MID. It becomes this object of fixation and fuels irrationality. I’ve come to realize that, 9 times out of 10, trying to save money by spending it (which is exactly what the MID is all about) is a fool’s errand.
Save a penny by wasting a dollar. Nothing new.
“I’ve come to realize that, 9 times out of 10, trying to save money by spending it (which is exactly what the MID is all about) is a fool’s errand.”
Or save money by borrowing it. A thoroughly dumbed-down puke can easily be convinced that borrowing money can be a cheaper and smarter way to go than dipping into savings to pay for an item or (gasp) to simply go without.
I especially like the logic (sic) that drives paying only the monthly minimum on credit card debt.
Good summary helot
“…The tax write-off, might not be much, but the idea fuels a rocket. Manias are funny that way….”
It’s gotten to the point the that MID has reached urban legend status, much like BigFoot or Area 51.
Realtors at all the open houses I have ever been to *always* coyly drop a line or two about the MID. They make it sound like the MID will pay for your house in and as itself.
But when pressed, none of them actually understand the underlying arithmetic, countering with “you have to talk to your CPA”
With the housing crisis and the recession firmly in the rear-view mirror
Except it’s not a highway. This is NASCAR. And somebody is about to get lapped. Try not to look too far up ahead.
Better to be in the bleachers with popcorn.
Actually if it’s NASCAR maybe a beer and one of those big old turkey drumsticks is in order.
So.. I spoke with my older cousin, who’s a homeowner in Walnut Creek, CA. I suggested there may be another housing crash coming soon
He replied “Naah, I don’t think so. You see, home prices aren’t rising to ludicrous levels overnight like they did in 06/07. It’s stable this time.”
I’m not a housing expert so I didn’t know how to reply.
Thoughts?
IMO there’s no point in replying. The Fed will make fools of us all until they can’t any more.
Ask if home prices in his hood r 3x income
“I’m not a housing expert so I didn’t know how to reply.”
1. By suggesting that there may be another housing crash coming soon indicates that you may be more of a housing expert than you realize.
2. Even if you did know how to reply if probably would not do you or you cousin any good to do so.
3. Send your cousin to me and I will discuss with him/her all the wonders associated with unlocking home equity. (The first cup of coffee is free.)
The first cup of coffee is free.
Unless you’re a closer. Then they’re all free.
Neptune Beach, FL Housing Prices Crater 5% YOY
http://www.movoto.com/neptune-beach-fl/market-trends/
a house is your meal ticket!
Mine too!
“In IBM’s case, a discrete tax benefit of $582 million related to an intra-entity asset transfer — shuffling non-inventory like intellectual property between business units, an exercise for which accounting practices are changing and IBM chose to adopt the new approach early — gave it an effective tax rate of negative 23.1% in the first quarter of 2017, according to a regulatory filing. A big benefit like that can bring down average tax rates even when stretched out over several quarters.”
http://www.marketwatch.com/story/ibm-earnings-beat-is-a-product-of-tax-avoidance-and-its-nothing-new-2017-10-18
Revenue has fell for 22 quarters.
“Revenue has fell”
Not to be a grammar Nazi, but the correct wording is “has fallen”. Please make a note of it. I know this, because I have went to some good skools.
Did you dump your stox yet, or do you plan to watch them take a dive when the Fed finally sobers up and takes away the drunkard’s easy money punch bowl?
“Once example is Orange County’s Credit Union, a $1.5 billion institution based in Santa Ana, Calif., which has unveiled two new products designed to help consumers purchase a new home in a very tough housing market. The products — a conventional loan with zero down payment and a loan with 3 percent down — allow borrowers to qualify for a home for basically little or no down payment. ‘While members wait to save for these large down payments, the price of homes continues to rise,’ said Carlos Miramontez, vice president of mortgage lending at OCCU. ‘We refer to this as the ‘cost of waiting.’”
Santa Ana was one of many ‘ground zeroes’ in subprime meltdown that commenced in December 2006.
Apparently nothing was learned.
“‘While members wait to save for these large down payments, the price of homes continues to rise,’ said Carlos Miramontez, vice president of mortgage lending at OCCU. ‘We refer to this as the ‘cost of waiting.’”
Offering mortgages with zero downpayment requirement is a certain way to ensure the cost of homes continues to rise.
“…Apparently nothing was learned…”
Today, peoples attention spans are measured in minutes.
Wait until those folks that can barely qualify to buy with an effectively zero down loan get their first property tax bill or want to sign up for homeowners insurance, or get a bill from their HOA. You might to refer to these as the “cost of *not* waiting*.
I’m sure all this was thoroughly explained by the Loan Officer. <;{