A 10 Or 15 Per Cent Drop Is Not The End Of The World,
A report from the Sydney Morning Herald in Australia. “House prices are falling and mortgage interest rates are rising and anyone doing anything with property – buying, selling, upgrading or downsizing – is likely scratching their heads about what it means for them. Shaun Hardy, 38, and his wife Megan Maurice, 33, bought a two-bedroom flat in Ashfield seven years ago for $394,000 that was valued at more than $600,000 earlier this year.”
“Hardy, a barista, says he is not concerned about the property market going down. ‘It doesn’t really concern us,’ Hardy says. ‘If it means first home buyers can afford things that’s fantastic, it’s not a case of ‘we’ve got ours’. We realised we’re not going anywhere, house prices might be falling but unit prices are falling even more, so thought we’d be comfortable and enjoy our flat more rather than just complain.’”
“Vincent Turner, the founder of online mortgage broker Uno Home Loans says it is usually being able to save the deposit that is the biggest problem for first timers and, with falling prices, that is going to be easier. ‘If your time horizon is in excess of 10 years, then seeing a 10 or 15 per cent drop over the next couple of years [in the value of the property] is not the end of the world,’ he says.”
“Renovation can be a great alternative to paying the significant transaction costs of buying another house. However, it is a better option for those who bought some time ago and whose property is worth more than when they bought. ‘It’s not such a good option for those who bought only a couple of years ago, as your property will likely be worth what it was at the time you bought it,’ Turner says.”
“Martin North, the founder of Digital Finance Analytics, says upgraders need to do their homework before applying for another mortgage on a more expensive property. Lending standards are becoming tighter, so you might not be able to borrow more than your current mortgage and that will also be true if your circumstances have changed, he says. ‘So it is worth checking this out early. Generally, mortgage borrowing power has been reduced in recent months,’ he says.”
“One strategy may be to sell, rent, and wait for the market to fall further, before buying. ‘That might work, but you are taking a bet on the market. You might be right but you could be wrong,’ North says.”
“For those trading down; seeking a smaller place to release capital, you may want to bring the transaction forward because larger value homes are falling faster than smaller ones, North says. He also notes that prices have been falling ‘more dramatically on the urban fringes.’”
‘It’s not such a good option for those who bought only a couple of years ago, as your property will likely be worth what it was at the time you bought it’
So any one who bought since then is fooked, right Vince?
There is a REALTOR working as the night manager at the local X where we are doing the lighting retrofit. He is not from Denver (nobody here is) and believes that the local market’s growth is incalculably infinite.
He only “took the job” to get some more “regular income” so what does that tell you about REALTOR?
This guy is a licensed REALTOR and an associate broker who wants to get his broker’s license. He says he wants to get his general contractor license and get rich by flipping houses.
The Kool-Aid in Denver is very strong…
‘One strategy may be to sell, rent, and wait for the market to fall further, before buying. ‘That might work, but you are taking a bet on the market. You might be right but you could be wrong’
It’s all a crap shoot now Martin. Was housing always like this?
‘For those trading down; seeking a smaller place to release capital, you may want to bring the transaction forward because larger value homes are falling faster than smaller ones, North says. He also notes that prices have been falling ‘more dramatically on the urban fringes.’
Heck yeah, screw those bashtards with their high priced shacks Martin! Low ball em’ to hell!
‘We realised we’re not going anywhere, house prices might be falling but unit prices are falling even more, so thought we’d be comfortable and enjoy our flat more rather than just complain’
Says the shack is too small but can’t afford to move. He’s not going anywhere all right.
Price$ is fallin’ … intere$t rate$ is a ri$in’ … but they enjoy$ their flat $it.u.a.shun …
$ounds like all bli$$ & contentment$ to my ear$ …
‘If your time horizon is in excess of 10 years, then seeing a 10 or 15 per cent drop over the next couple of years [in the value of the property] is not the end of the world,’ he says.”
This is the classic bull trap during a housing bubble bust. This is like buying in 2008 right before the bottoms fell out. The bottom didn’t happens in the US until 2012 which is 6 years after the peak in 2006. This is after trillions pump via TARP, QEs, record low interest rates, etc. But all of these just blow up another bubble.
So true. I bought a house in 2008 and it was worth 20% less by 2010 and 30% less by 2012.
Today it’s worth about 16% more than I paid (after all selling costs), which is OK, but not great. I should have waited two more years, but at least I got a great house with lots of upgrades.
‘If your time horizon is in excess of 10 years, then seeing a 10 or 15 per cent drop over the next couple of years [in the value of the property] is not the end of the world’
‘Bargaining…We all know what it is. Things get tough; the pain becomes overwhelming. So we enter, consciously or unconsciously, into some form of negotiation. Bargaining is really an attempt to postpone; it has to include a prize offered “for good behavior”.
‘Bargaining is (for most of us) a last ditch attempt to try to control life so that it will go our way. This phase of grief is often the briefest of all the stages. It is the final effort on the part of people to hold onto what is important to them. Or if it has already been lost, then to find some way to ease the pain.’
http://www.healingheart.net/articles/grief_stages/stages_bargaining.html
“House prices are falling and mortgage interest rates are rising and anyone doing anything with property – buying, selling, upgrading or downsizing – is likely scratching their heads about what it means for them.
No head scratching here. If you bought at in the last few years of the bubble, you’re schlonged, whether you realize it or not. If you sat out the madness, it only gets better from here.
Housing, Homelessness and the California Dream
The Mercury News
Adriene Hill
Sept. 9, 2018
“We now know that there is a very close connection between housing costs and homelessness,” said Margot Kushel, director of the University of California San Francisco Center for Vulnerable Populations.”
“The sky-high costs of renting and buying a home means many residents are just getting by. People are being forced to choose between paying their rent and buying food. They are selling their belongings, working 7 days a week, doing whatever it takes to keep their home.”
“About 29 percent of California renters spend more than half their income on rent, according to a study from the Joint Center for Housing Studies of Harvard University. Paying more than about a third of income on housing can make it hard to afford basics like food, clothing, transportation and health care, according to the U.S. Department of Housing and Urban Development.”
“The $ky-high co$ts of renting and buying a home means many re$idents are ju$t getting by.”
MAGA = return America to the $ub.elitist$ financial$ $it.u.a.tion$ that ex$isted in 1957, …
Got pre.in$ecticide non-GMO popcorn?
Link …
https://www.mercurynews.com/2018/09/09/housing-homelessness-and-the-california-dream/
“One strategy may be to sell, rent, and wait for the market to fall further, before buying. ‘That might work, but you are taking a bet on the market. You might be right but you could be wrong,’ North says.”
“The market” is a bubble blown by $15 trillion in Fed funny money “stimulus.” Betting against an unsustainable bubble doomed to collapse under the weight of its own fictitious valuations and fraud seems like a pretty good bet to me, North.
Gimme Three Steps-Lynyrd Skynyrd
https://www.youtube.com/watch?v=SM3jgkChV6M
“The couple is keen to stay in the area, as they feel connected to the local community and find it convenient to live so close to the city with good public transport.”
Not connected enough to remove the bars from the windows, however. I like this guy. He isn’t complaining or blaming anyone, even though he looks scared as hell in that first pic. I wonder what his wife does. It says he is a barista who bought a $400k home. Isn’t a barista a minimum wage Starbucks employee? Not that there is anything wrong with that. I just cant imagine them buying $400k houses while raising a family.
“A 10 Or 15 Per Cent Drop Is Not The End Of The World, It’s Just The Beginning”
Danville, CA Housing Prices Crater 9% YOY As Mortgage Defaults Ravage Contra Costa County
https://www.movoto.com/danville-ca/market-trends/
Clackamas, OR Housing Prices Crater 10% As Convicted Felons Find Career Opportunities In Mortgage And Housing Sales
https://www.movoto.com/clackamas-or/market-trends/
IF you are not leveraged 40:1
IF you are actually paying down the principle
IF your mortgage doesn’t adjust
IF you put down 20%
IF you have a job that can feed the alligator for the next 120 months
IF you were not banking on sweet appreciation
and
IF you have some money in the bank for a new roof/furnace/etc
******
‘If your time horizon is in excess of 10 years, then seeing a 10 or 15 per cent drop over the next couple of years [in the value of the property] is not the end of the world,’ he says.
If your time horizon is in excess of 10 years
This is a profoundly idiotic statement for those already clenched in the jaws of an alligator.
I hear its gonna be a soft landing. BTFD Hold your nose and buy the Sh@t.
“I hear its gonna be a soft landing.”
The shoeshine boy?
“Tumbling sales have made it difficult to gauge the full picture, especially in the priciest parts of central London.”
Oh dear…the bigger bubbles are, the harder they fall.
https://www.bloomberg.com/graphics/property-prices/london/?srnd=economics-vp
Jitters surrounding London’s property market are finally starting to show up in home prices. Brexit uncertainty has converged with rising interest rates, higher sales tax and stretched affordability. Islington is suffering the biggest declines, with home prices falling 7.8 percent from a year earlier, according to Bloomberg’s analysis of preliminary U.K. Land Registry. Home prices in Wandsworth slumped 7.2 percent and those in Southwark fell 4.8 percent. Surveys have shown declines for several months, but now the end of the boom is clear in official statistics too. It could be a while before the full extent of the price declines show up in the numbers as tumbling sales have made it difficult gauge the full picture, especially in the priciest parts of Central London.
We need a 40% drop in the overpriced California real estate prices for people to be able to realistically afford to buy even a starter tiny 1000 square foot home. I was at recent open houses in San Diego and Sacramento where small homes in non prime locations had tons of foot traffic and were listing at 650-900k!
Ebola!
San Diego, CA Housing Prices Crater 5% YOY
https://www.zillow.com/san-diego-ca-92037/home-values/
https://snag.gy/m5EzRB.jpg
You need a 90% drop for starter homes for couples pulling in $40K, at least.
“…non prime locations had tons of foot traffic and were listing at 650-900k!”
The children of these suckers won’t be going to college unless there’s a grant.