Buyers ‘Walked’ Last Year And ‘They’re Not Back Yet’
TGIF and it’s time to put this week in the can. “”Paul McCulley, bond-market-giant PIMCO’s Fed-watcher, wrote last week that ‘Weakness in residential property activity self-feeds’ and that we are in for a cyclical ‘wicked turn’ in the economy, and ‘unconventional property-market weakness.’”
“The Treasury Department’s resumption of 30-year bond sales could have an interesting impact on the home mortgage market, with lenders offering more 40-year loans and maybe even 50-year mortgages for the first time. Chris Low..said longer-dated home loans could prevent a dramatic drop in the housing market. ‘It is a kind of a way to play games with monthly payments,’ said Dick Bove. ‘Stretching out the mortgage maturity is simply a way to lower month payments and stimulate sales.’”
“Land speculators are illegally subdividing land in western Box Elder County (Utah) and selling the small parcels on the Internet. ‘I’ve received phone calls from people who want to know what they can do with their land and are surprised when the answer is nothing,’ Garth Day said.”
“The fastest home-building binge in 33 years is bringing new fears of a glut in new homes and not enough buyers. ‘The long housing boom in the tri-state area is dying out,’ said (economist) Mark McMullen. ‘We won’t see a collapse in housing prices, but the real estate industry, the brokers and financial institutions in the New York area, will take a pretty big hit.’”
“McMullen said a glut is already showing up in California and Florida, as well as New York City and New Jersey. ‘In the metropolitan areas on the West and East coasts, there’s over-building,’ he said. ‘The rate is outstripping the number of households being formed and the number of potential buyers.’”
“The Portland area housing boom seems to be withstanding a seasonal winter chill, several real estate industry experts concluded. January’s median figure was down 2.8 percent from the December median price of $252,900. ‘It would be a great sign of strength if we just hold the pricing,’ said Jerry Johnson a professor at Portland State University.”
“‘Pricing power in the Portland area still has not shifted from sellers to buyers, Johnson said. ‘When that change happens, it happens quickly,’ he said. The area’s largest builders increasingly are erecting houses with higher-end finishes, (realtor) Peggy Hoag said. ‘Granted, they’re on minuscule lots, but the houses have character,’ she said. ‘They look Craftsmany.’”
“The Southwest Washington housing inventory is at its highest point in two years, possibly signaling a weakening market. Although new listings increased 9.6 percent, from 1,085 in January 2004 to 1,189 in January 2005, closed sales decreased by nearly 12 percent and pending sales also dropped, by nearly 8 percent. ‘The market has eased off a bit,’ said David Hendrick, association executive with the Clark County Association of Realtors.”
“Fresno has established itself as a defined market for distributors. ‘There is vacant land for miles, but virtually no land is available,’ Stewart Randall said. The market may peak this year, he said. ‘I got to think we’re getting close to the top,’ he said. ‘You ought to consider cashing out or taking advantage of these prices. These things go up and down.’”
“Marin’s housing market continued to cool as home sales sank last month. Sales of single-family homes fell to 136 in January, down from 198 the month before and down from 175 in January 2005. The median price was $867,000 last month, down from $900,000 in December but up from $850,000 in January 2005, according to DataQuick.”
“The trend is similar in the condominium market, with sales dropping about 46 percent. ‘The real estate community is seeing buyer resistance to price,’ said Jack McLaughlin. ‘Prices went up too fast in the last few years so the buyers walked in the middle of last year and they are not back yet,’ McLaughlin said. ‘Sellers are going to continue to have to adjust their expectations and successful sellers are going to be those that price their property realistically and are willing to negotiate.’”
Thanks for all the help with links this week! Check back this weekend for news, market observations and your topics.
ben. front page center az. republic “cooling housing market means sizzling bargains” !!!! now every one in az. knows the bubble has burst, that is every body but the kingmanights.
Everybody should spend a few minutes this weekend battling on the Craigslist Housing Forum. Bubblers there like Lou Minatti are still badly outnumbered, and they need your help.
…I can see Lou now, in his foxhole, covered with mud and spent shell casings. He’s been out of food for three days, and his canteen is almost empty. He reloads, peers over the edge, and comes face to face with three divisions of angry FBs. In thier HELOC’d Hummers, of course. He needs your help!
http://forums.craigslist.org/?forumID=6
craigslist housingforum is fun!!! I’m over there torturing the bulls right now! Join in!
Jack McLaughlin is as bad as David Lereah…he’s been changing his tune a lot.
And by some measures the median sales price y-o-y in Marin is now NEGATIVE.
Marinite
Marin Real Estate Bubble
I meant to say it’s y-o-y price appreciation that is negative according to some official estimates.
OT but always important…
The Orange County Inventory Fire has now risen to 15,859, according to http://www.ocrealestatefinder.com, which tracks all properties, from land to condos to houses to forclosures to birdbaths to backyard playhomes.
We’ll most certainly hit 16,000, as predicted, by Monday.
Time to throw another realtor with a bad case of SpringHopeMania onto the Orange County Inventory Fire.
Pretty soon, you’ll be able to see the heat of this thing from space.
“Spring will save us! Spring will save us!”
Nope.
“They aren’t making any more buyers, ya know.”
I was waiting for your comment.
OC Renter’s update today from a smaller data set (ziprealty) is up over 10,000 homes for sale.
Downtown Huntington Beach has added 10% to inventory over the last 2 weeks. On top of the de-listings 3 within 2 blocks of me.
It sure is different here. Where are the rich Arab princes looking to corner the million dollar 20 year old ranch house market in Costa Mesa?
I’m too lazy to post this in the weekend suggestions, but how do you think this will affect rates?
“The number of mandates awarded to bond fund managers by pension schemes more than doubled last year, reflecting the growing trend towards investments designed to match liabilities, a leading actuarial consultant said on Wednesday.”
I’m too lazy to post this in the weekend suggestions, but how do you think this will affect rates?
“The number of mandates awarded to bond fund managers by pension schemes more than doubled last year, reflecting the growing trend towards investments designed to match liabilities, a leading actuarial consultant said on Wednesday.”
Pension schemes double mandates to bond funds
John,
I think this is a very important point. I believe this is the source of a lot of the money pouring into the MBS market in recent years. Note how the MBS market took off when the 30-year bond was discontinued. T-bond gone = home prices rose. T-bond back (this month) = prices decline???? I am of the conspiracy set. I think the bubble was created intentionally to strengthen corporate balance sheets. Otherwise, when the deficits started rising, the 30-year would have been brought back earlier (ca. 2003) when rates were lowest, IMHO. I’ve long guessed the recent M&A activity was part of the process, also. Corporations need to get ready for the deflation (no debt, and bought out/merged with competition). We will see.
Just a thought that just popped up…many of us are concerned with hyperinflation. If the govt intended to save debters, couldn’t they have done it more easily by giving money to corporations instead of homedebtors? (I guess, in a way, they did via the tax reductions.) The next few years will be interesting, indeed.
The Economist actually ran an article on this point. I believe that their point was that if all the pension funds use this strategy it will drive down up prices (and yields down) thereby making it not as useful strategy (ie, to expensive). It seems to me if there are major disruptions in the bond market (e.g., central banks dumping us bonds) then pension funds may quickly decide to pursue other strategies thereby making the long-bond sell off worse. I’m not an fiance expert and am interested in other’s interpretation?
‘We won’t see a collapse in housing prices, but the real estate industry, the brokers and financial institutions in the New York area, will take a pretty big hit.’”
Everybody keeps saying that, but how do they know? Maybe prices won’t collapse overnight - they never do in real estate - but over a 2-3 year period they could fall 20-30% like they did in some markets in the early ’90s. To many sellers, that would be a collapse!
Paul McCulley, bond-market-giant PIMCO’s Fed-watcher, wrote last week that “Weakness in residential property activity self-feeds” and that we are in for a cyclical “wicked turn” in the economy, and “unconventional property-market weakness.”
UHhhh OHhhhhhh.
How about this one: According to Laura Rowley quoting Paul Kasriel, director of economic research at Northern Trust in Chicago; the personal savings rate in the U.S. is negative 5.2%. He gets this number by backing out Housing and real estate commisions from the government numbers, which treat these items as “investments”. Read it and weep.
“The government said yesterday that mild weather in January caused an unexpected flurry of construction, and a surge in new permits for later projects.”
Here’s that “OH $H!T !! factor” being reported in yet another article.
Remember BUYERS… this is not an indication that there is so much DEMAND that they have to accelerate building efforts. It’s just another market INDICATOR where builders race to the finish line- trying to complete and sell their projects before mainstream catches wind of the major turn in real estate.
Gotta love this ananlogy from the first article:
The drunk is the housing market, the cop is the Fed, and that’s analogy
Portland is different (LOL)
Seriously, I have not seen a huge increase in for-sale listings in the area yet. Portland does have a few things going for it that may reduce the impact of the bubble here:
1. Portland got started late. When I bought in 2003, I encountered no bidding wars. Over the period of 2002-2005, re-sales of condominums in my building (defined as the increase in sales price of the same unit) appreciated by only 7-8% per year. Hopefully, the bubble bursting in other areas will cause the Portland bubble to burst in its earlier stages.
2. Portland has very strong city planning. Condo projects can take several years to get approved by the city and the neighborhood committees, and they are not infrequently sent back to the drawing board. One project has been delayed for almost five years because “it looked out of place.” This makes construction slower than in less regulated cities.
3. Condo boards discourage speculation by controlling the number of rental units. Every single HOA I looked at (about a dozen) restricted rentals to
Don’t know what happened to the rest of my post, so I’ll just finish my thought:
3. Condo boards discourage speculation by controlling the number of rental units. Every single HOA I looked at (about a dozen) restricted rentals to
This is very strange; let me try again:
3. Condo boards discourage speculation by controlling the number of rental units. Every single HOA I looked at (about a dozen) restricted rentals to
Last try:
3. Condo boards discourage speculation by controlling the number of rental units. Every single HOA I looked at (about a dozen) restricted rentals to less than 15% of the units. In some new construction, no rentals at all are allowed for the 1st year.
That being said, the price/rent ratio is out of whack (I sold my condo and am currently renting a $500K apartment for $1700/month), and I do believe the bubble will burst primarily because Portland has A LOT of San Francisco and San Diego transplants. Once the CA bubble pops, the flow of money to Portland will stop.
you getting cut off like that every time….that is hilarious. its like every time you got to the punchline somebody changed the channel.
I read a newsflash on the Oregonian website authored by the journalist who wrote this article. It was published the night before this article broke in the hard copy morning edition. The newsflash was titled something like “Chill on Portland Housing Market” and was decidedly downbeat. Then I see the next morning this 180 spin headline and upbeat vague analysis. The most vague was the part about 3.2 months of inventory. The journalist doesn’t point out that how that is a significant increase in inventory from the previous month. Here is an alternative analysis of the Portland housing market from a Portland realtor blog I follow:
“The supply of houses for sales in the Portland metro area is now at its’ highest level in a year, since January of 2005. This is good for buyers who’ve had to search for homes in a market of tight and low supply.
As it stands now, there are 3.2 months were of housing inventory. In other words, if no other homes were added to Portland’s real estate market, the supply would dry up in 3.2 months. This is a large increase from the previous month’s supply of 2.1 months.
While there are actually more listings for sale than a year ago, the number of homes that have sold has dropped by almost 5%.”
You have now posted the third point three times.
SunsetBeachGuy…
I don’t understand the “Spring will save us!” mindset.
We’ve had an absolutely wonderful winter here in HB, I think it’s rained a handful of times.
Why would anyone wait until Spring to buy a house? Why not buy one now?
I guess the only factor left before this becomes a done deal is this one:
Is there something we don’t know?
Is there some logic to SpringHopeMania?
Since I’m a logical guy, I always try to see stuff from multiple angles…but with this one…I keep coming up with the same result:
Thousands of open houses, empty, with birds chirping quietly, in the Spring.
There might be a run on books over at Barnes & Noble off of Edinger for realtors who need reading material…but…
Am I missing something?
Is it possible that people will suddenly lose their minds and say…
“Wow! 40 and 50 year loans, honey! Let’s go shopping! See, we can afford it!”
Comments?
I hear ya AUCTION… and another goofy quote from Ben’s awesome compilation of TODAYS articles:
“We are developing what I would call a healthy, balanced market.”
Kathy Schlegel, president of the Marin Association of Realtors, said the numbers indicate softening of the market and a return to “more normal rates of growth.”
HOW MANY OF THESE CLOWNS… er, I mean CLONES did they make?????
I swear the REAL ESTATE INDUSTRY put out some kind of flyer “repeat after me…”
RE: 40 and 50 year loans; It has been shown many times here and on the F’d Borrower blog that those loan products won’t have enough financial impact to keep the bubble going. The savings per month are minimal (~$100/mo as I recall?). So Cal Mortgage Guy did some good analyses as I recall. I can’t wait until this bubble explodes, as I have spent way too much time reading this blog!
The part that still baffles me is how people fail to realize that IO and 40/50 yr Am loans are basically leases.
worse than a lease -a lease w/ all the benefits of price risk exposure to a bloated asset class that will get creamed in yield compression….
Traditionally people shopped in the spring to avoid their children changing schools mid year by a mid winter move. More shoppers in spring, more activity. In the midwest that is still the norm - however this year there are 30 to 45% more listings than last year.
I agree the the pollyanna optimists have got to say something to fill the akwardly silent air.
Springhopemania fits the bill. Near enough to inspire optimism, yet far enough not to be threatening and who doesn’t like Spring the season.
Silence or an admission that we are at the top of the market admissions aren’t their job.
i agree, spring will not save the sellers,this crash is just gaining steam,but spring will indicate to the rest of the country that buyers demand has soften,and the price decreases that we all are looking forward too will begin.
I can’t imagine speculators wanting to get back in, either, especially most of them haven’t gotten out.
Over at the San Diego Investment Club, (Flipper Central, if you like), found at http://www.websitetoolbox.com/tool/mb/sdcia, there ain’t a one of them talking about gettin’ back in. They ain’t THAT dumb.
I don’t know.
I guess I just keep going back to my favorite chart.
The chart that brings me happiness.
This chart is found here:
http://www.ofheo.gov/HPIState.asp
Find California in there, and hit search.
You can witness the full rollercoaster ride that is California real estate- from the last 30 years.
If it ain’t over, it sure has to be close to being over.
Ephonism was saying this board is dead.
I don’t agree.
This is kinda like the USC-Texas game.
You can’t leave your seat, or cheer, or throw a party-
-Until June 30th, in my opinion.
I give us the odds, but “no one ever went broke underestimating the intelligence of the American People.”
Sigh.
I do love that chart, though.
Some very strong words from pimco. Everybody has jumped on the “buy now” because of low inerest rates. Well I personally would rather buy at a much cheaper price and get a higher rate. I would always have the chance of refinancing when rates fell to lower my payment. People who are now overpaying in price are going to be screwed when rates eventually go up. Even bush is saying to be aware of raising rates. How much more information do we need? These people will be stuck with an overpriced pig!!!!!!!!!!!!!
The prices going up due to low interest rate has been a smoke and mirror trick for too long.
The monthly mortage payment ( the regular 30 yr kind) for same house, even with LOW interest rate, was Higher even 2 years back than when in 1999 (rate was close to 85 then?)
Now in 2006 , the monthly mortage for the same house is WAY UP compared to what I would have paid in 1999 or whenever we want reference that to.
Am I missimng something here friends?
I meant 8% interest. Fast and poor typing skill..will check before posting next time
OT - but funny(actually sad)nonetheless:
I recently sold some swimming pool accounts to a Russian gentleman in his twenties, married with a kid on the way. He recently bought a Mcmansion with a 100% I/O loan, and took out all his equity (about 80K) to buy this pool route. Also just bought himself and his wife new vehicles on credit.
He also just bought along with his brother, two dilapidated houses in the ghetto in Sac, also 100% financing (when did they start offering 100% loans on investment property??). There plan is to fix them up and sell them.
Here comes the sad part, he just told me he bought a piece of land in Texax, sight unseen, over the internet for $15,000. Again 100% financing.
I feel bad as he’s a really nice young man, but this guy is going to be ruined in a couple of years. I think I talked some sense into him, but the damage has been done.
What a dummy.
I use to get three 100%-107% investment loan junk faxes each week from 2004 to mid-2005. I would have thought they evaporated by now.
i thought B1Bs were for people who were GOOD at math….
sorry i meant H1B………
Spring theory:
1. Investors won’t bite (won’t catch falling knife)
2. Current homeowners likely will have to sell their place first before moving to buy (which could take months…or more)
3. Rates will be up and risky mortgages harder to get.
4. The only buyers that maaaaybe will bite are either first time homebuyers with good credit, or those who have cashed out and are waiting to buy primary residence.
So all you stat-mongers out there - are there numbers breaking down the market of homebuyers into categories (say, % of first-time buyers/cash-out waiters vs. everyone else? If there is, you can probably get a pretty good idea of who might buy in spring, and if you ask me, there’s no way there will be enough buyers to stop the slide)
Bond Sales May Promote Long-Term Mortgages
By ALEKSANDRS ROZENS, AP Business Writer Fri Feb 17, 1:34 PM ET
NEW YORK - The
Treasury Department’s resumption of 30-year bond sales could have an interesting impact on the home mortgage market, with lenders offering more 40-year loans and maybe even 50-year mortgages for the first time to help some consumers qualify for loans.
While the connection between the two — the U.S. government borrowing money through the sale of debt and a home buyer looking for a loan to buy a home — may not be apparent, the two are inseparable. That’s because the interest rate the government pays for its debt usually determines the rate consumers and corporations will pay for the loans they take out.
The reintroduction of the 30-year bond means lenders — who had relied on the government’s 10-year note for mortgage rate guidance — have a better idea of what to charge homebuyers for a 40-year mortgage. There is also some talk among lenders, who are always looking for new mortgage products, about creating a 50-year home loan.
The longer-term mortgages would lower monthly payments.
“To the extent more consumers have more products available, it will be a help for affordability,” said Douglas Duncan, chief economist at the Mortgage Bankers Association.
Keith Gumbinger of HSH Associates, which tracks the mortgage industry, believes lenders will likely generate some borrower interest with the 40-year loans. “Expanding your menu (as a lender) to include as many loan choices means you get a better opportunity to scour borrowers out of niche markets,” he said.
After a five-year hiatus, the Treasury Department borrowed $14 billion through the sale of 30-year bonds on Feb. 9, and said it plans to continue regular sales of the bonds. The long bond’s revival was a big event on Wall Street and for mortgage bankers because the longest-dated government debt had been the Treasury 10-year note. (On Wall Street, any U.S. government security 10 years or less is called a note.)
“A 30-year (Treasury) security might give lenders a benchmark to track the pricing of longer-term mortgages,” said Steve LaDue, president of Affiliated Mortgage in Wauwatosa, Wis.
Forty-year mortgages have been offered by lenders over the last two decades, according to Gumbinger, who recalled that their use last jumped in the 1980s when home prices were high and interest rates were in double digits. Rising home prices are bringing them back, he said, but noted that these loans likely won’t account for more than a fraction of a percent of all loans processed by bankers. Last year, lenders underwrote $3.2 trillion worth of mortgages.
By stretching out their mortgage payments over 40 years first-time home buyers can lower monthly borrowing costs and qualify more readily for a loan.
LaDue said bankers could also create a 50-year mortgage because of the Treasury’s 30-year bond sale. This would be a product lenders could sell to first-time home buyers, or what LaDue calls “a gateway product.”
LaDue doesn’t expect borrowers to stick with these loans for the full term. He said these homeowners are likely to eventually refinance into 15-year or even 30-year loans to repay them faster.
Of course, like all longer-term loans, the 40-year mortgage carries a rate that’s higher than shorter-term loans, as lenders charge more for taking on the risk of a longer term loan. So although the payments are lower, a borrower ends up paying much more in interest.
Last week, home buyers could get a 40-year $100,000 mortgage at a rate of 6.50 percent which meant their monthly loan payments were $585.00, according to HSH’s Gumbinger.
A 30-year loan, meanwhile, had a 6.25 percent rate and a home buyer with a $100,000 loan had a monthly loan payment of $616.
“Could there be some 50s? There could be some 50s” said Gumbinger, referring to 50-year home loans. But he added that he does not expect a large audience for these mortgages.
The new loan products, though, could be of help for a housing market if they improve affordability at time when sales have slowed and inventories have ballooned.
Chris Low, chief economist at FTN Financial, a financial services firm, said longer-dated home loans could prevent a dramatic drop in the housing market because their lengthy payback periods would lower monthly payments at a time when interest rates for other mortgages have risen from historic lows.
“It is a kind of a way to play games with monthly payments,” said Dick Bove, banking analyst at Punk Ziegel. “Stretching out the mortgage maturity is simply a way to lower month payments and stimulate sales.”
if you start at 25 years old, by the time the 50 year mortgage is over, your life ends. you never owned your house, yet your monthly payments were above rental rates.
I guess the point of this scheme is to leave a house for your children. But…if so many houses are going to be left to children, those children will never need additonal houses built, which goes back to supply/demand. This bubble is a joke, and it has so many sub-jokes like the 50-year mortgage. Incredible…
I have to say something that has been eating at me for quite some time. Do people have any idea how much they’re spending to have and maintain their homes? My $15,000 car will cost me an extra thousand bucks in interest over the five year duration of the loan (had some money down, of course). Add periodic maintenance, gas, and the occasional set of tires, and the true cost jumps even more. That said, once it’s paid off, the years to come where I get to enjoy its use w/o payments make buying more attractive than leasing.
On to housing: a 500k home at 6% - tell me we’re looking at 30 THOUSAND dollars a year on interest alone!? I know, I know, that’s ONLY 22,500 after taking into account tax breaks. Tack on property taxes, upkeep, the occasional paint, roofing, new appliances, etc. (things all covered by my apartment rent)… Oh yeah, and you have to actually pay down the principal someday. Just looking at at principal and interest is even scary. Gotta be more like 2,3 times the advertised price tag by the time you’ve finished paying for the bankers’ kids’ college, no?
My inlaws (Japanese) lived with six in their home for decades (grandparents + grandkids under same roof). Two bedrooms, one family room, ONE bathroom. And you know what? There was JOY in their lives (still is, of course). Now, while I do believe just one more bathroom would have been more convenient, I don’t see how anything in the way of more bathrooms or square footage could truly bring people happiness.
Say what you will, but I think people need to get their priorities straight.
Oh, and in case you missed my post on these people in a previous thread - the house went from a bubble high of 1.2 million to 200k today (both numbers approximate).
You are absolutely right. I’ve posted this before but when I was a kid my folks moved from an apartment (3-ish bd…the 3rd was really small)where my sister and I shared a bedroom once my cousin came to stay with us. When my Dad finally bought a house (saving from his regular full-time job + driving a cab at night for a while), my sister and I STILL had to share a room. But they were thinking ahead to when we would be moving out (we were in our teens)so they knew they wouldn’t need that much house. Folks nowadays think they MUST have beaucoup rooms and square footage and the huge back yard to raise their children properly, so they convince themself that they have to start out with the big house, or move up to one. And then the HELOC, and then the over-extending until they get into trouble….personally, I can’t and won’t live like that. It always amazes me when I read that the average household has somewhere in the $9K or $10K range. Scary. My VISA bill was $480…paid that sucker off today.
BayQT~
I paid all my Christmas ones off lol.
Other than that, I rarely run up a high CC bill.
I didn’t use any for Christmas.
BayQT~
Sorry, I’ve got to disagree here. I shared a bedroom with my brother all the way through my school years, and I found that it really sucked once I got to high school. 2 and a bit years age difference (and 3 school grades) means your interests are completely different. No doubt it wasn’t particularly fun for him either, although we do get on OK these days.
My parents gave us the master bedroom to give us as much space as they could (it took me about 10 years to really appreciate that gesture; there would have been fratricide if we’d had to share one of the smaller bedrooms), but it still wasn’t enough. I regret never having my group of friends come round to my place, because there was nowhere in the house we could go and chat.
Agree with this. My sister and I shared a room until my early teens — and we were only 15 months apart. You never have your own space, either physically or mentally. Separate rooms are a luxury, but an important one, IMHO. Having said that, we just sold a
My brother and I shared a shoebox until he went to college (I was 16). We’ve rarely, and I mean rarely, fought - and have always been best friends. This desire for one’s “own” space is a luxury, not a necessity. Learning to get along with people is arguably one of the family’s most important tasks, wouldn’t you agree? It’s easy to imagine the reasons why many siblings fight, and I’d bet that most have nothing to do with life’s needs - only wants. MY toy, MY room, MY everything. How about OUR home? OUR family?
Sorry everyone for getting a bit off topic, but I do believe America’s desires for more and bigger are part of the problem. And, regarding a room for each child… they say that good fences make good neighbors - doesn’t mean you should fence off the family. I don’t mean any disrespect here, and I have no animosity whatsoever toward anyone (except the RE industry, of course!), I’m just saying that a larger house isn’t the key to happiness any more than is a larger vehicle. Make you feel good about yourself? Sure. But only because you’re (they’re) comparing themselves to other people. Those damn Joneses.
Me? I just feel good knowing that “your” doesn’t mean “you are.”
Way too preachy - people don’t like that. Sounds arrogant. Like saying real estate never goes down. Crap, I’m turning into one of THEM!
What’s a credit card?
LOL! Touche, crash! That’s a good one.
BayQT~
A credit card is a device I use to get a percentage refund from merchants on every purchase and as a line of defense to my bank account in case of fraud.
A credit card is a piece of plastic I use on holidays because places like hotels and car-hire companies won’t accept cash.
HOZ made a good point.
“Traditionally people shopped in the spring to avoid their children changing schools mid year by a mid winter move. More shoppers in spring, more activity. In the midwest that is still the norm - however this year there are 30 to 45% more listings than last year.”
The point HOZ makes didn’t insert itself into my cranium before today.
The reason is:
My wife and I are currently WITHOUT children BECAUSE OF this housing bubble.
Isn’t that ridiculous?
We’re waiting to reproduce because of an artificially inflated housing market.
Nevertheless, the point HOZ makes is important, now that I see it.
I guess then, the question is…have all of us been loud enough, talking about the Housing Bubble to people we know, to counteract all the RE lies and manipulation?
Will moms and dads know what befalls them if they sign on the dotted line this Spring?
Have we gotten the word out to mom and dad?
I’m not sure we have.
HOZ’s explanation makes me realize we may need to scream louder.
Mom and Dad need to know about The Housing Bubble.
Damn, if we’d been able to have kids already…
…I would have freakin’ known that.
Don’t wait don’t wait don’t wait don’t wait.
If you truly want kids your housing situation won’t remotely compare in importance to starting the family. The house will come soon enough.
Have kids now before interest rate get higher! You will be forever priced-out of affording kids if you wait any longer, he-he
Check out how American’s saving rate is even lower based on housing consumption.
Granite counter tops, stainless steel appliances, and landscaping turn out not to be investment after all.
feepness…
Kids are expensive, though.
Tack on a house in Huntington Beach, CA right now and…
What I mean is…
…I don’t want to go bankrupt, get foreclosed on, and have to move the family to Alaska…
…by simply buying a house in HB.
I’ve had a lot of people tell me not to wait.
And then I find out they’ve moved to Arkansas.
I ain’t moving to Arkansas.
Maybe that means I’m… well, whatever it means.
I’ll stand my ground.
I want a family, and a house we can afford, right here in Huntington Beach.
I don’t really care if I have to wait another three years to do it the right way.
I just think it’s ridiculous that my options are so limited by a housing bubble.
“I want a family, and a house we can afford, right here in Huntington Beach. I don’t really care if I have to wait another three years to do it the right way.” There are many right ways to have a family, and one of it is in a rental home. Making too much debt is not a right way.
“I just think it’s ridiculous that my options are so limited by a housing bubble. ” Don’ limit yourself too much.
Best wishes!
Well, if you want to buy that’s one thing. But you don’t have to own a house to have kids. I come from a long line of people that didn’t own the homes their children were born into.
In fact, I may be the first one that actually owned the house our first kid was in. I have pics of me as a baby in the apartment with my five year old sister!
A kid is not that expensive if you have insurance and friends with kids who will pass you stuff and give gifts. I think we’ve purchased less than a dozen toys. If you’re into $1000 cribs and strollers, I can’t help you there but it doesn’t sound like you are.
They do, however, take time. LOTS AND LOTS OF TIME. Grandparents who are interested in helping out are a godsend too.
p.s…
The ‘wait it out’ option is a good one, as explained by this chart.
http://www.ofheo.gov/HPIState.asp
It’s just a matter of time.
I have teenagers….wait
Awww, Liz, don’t scare him. Mine are 28 and 21 and their teen years weren’t that bad. Or….maybe I just forgot. LOL! Seriously, Auction, don’t be afraid. They just turn into gremlins if you feed them after midnight. LOL!
In all fairness, I have 2 beautiful daughters…one getting married this year and the other about to graduate summa cum laude in May. I couldn’t be more proud of them.
BayQT~
Mine is 8 months and I’m watching her sleep on the video monitor right now.
God, 21 and 28. It seems so far away yet she is sitting on her own for the first time this week and it seems like she was born yesterday…
Enjoy these days…I hate to sound like a cliche but the years just fly by. I remember all too clearly when they were small ones. If I could relive them, I would in a heartbeat. Now I get to look forward to being…oh, my God….a Grandma. LOL! But I’m too young for all that!
Wow! We are WAY OT…sorry.
BayQT~
Yeah, but it’s Friday… what the hell…
Sweetie
They do things to your brain man… watch out!
Whoops
Corrected.
Precious, reminds me of my baby daughter only ten or so years ago.
Feepness,
Congratulations on your daughter’s “sitting up” milestone!
My eldest is starting kindergarden this year. Just wait ’til you hit that one. It really does go way too fast…
Best wishes!
Just saw her picture, Feep. She’s beautiful!
p.s. That’s my first daughter’s name, too.
Won’t she fall off the monitor?
I can’t begin to tell you how much I envy you guys.
I see babies every damn day, I even talk to them.
I’m at the ‘talking to babies’ stage.
Argh.
Auction,
You need to get on with the baby-making already! We’ve got three and live in a nice rental. Many others here have kids and rent. Not a big deal…really. The kids won’t give a darn about your rent/mortgage. Just be there for them and enjoy the daylights out of them. That’s all they care about.
yeah right!
Why not?
We paid $7K for a 5 year old SUV in 2005. It’s in good condition and should last until at least 2011.
If you can’t save $7K you shouldn’t be on a housing board.
Ironically we purchased it from a Real Estate agent friend of ours.
She replaced it with a Lexus SUV. She is actually an honest sweetheart who is long past needing the money.
I agree with feepness. I drive a 98 Honda Accord that I paid cash for 3 years ago. And I’m starting to save for when I have to replace this one. With it being a Honda (and my taking good care of it), I’ll probably have a few years to save enough for the next 3 or 4 year old vehicle. The last time I had a car note was when I bought my 89 Volvo….paid it off in 2 years…had it for 14 years.
If it’s at all possible, you don’t want to have a car note.
BayQT~
who over 30 wants to spend 7K on a car? that’s too little.
Well, when I sold the house, I also sold the Toyota Supra :’( My baby. But she was 10 years old and still went for a good price. LOL This is so OT. I currently drive a 1996 Nissan Maxima that I take care of. She’s been very good to me (knock-on-wood).
My friend the other day says “Your car still looks new-fashion.” Whatever that is supposed to mean. I guess it still looks cool, but she drives a brand new Lexus 470 SUV. HA! Well at least I don’t have a note. Those car notes will kill ya!
My wife and I upgraded both our cars since 2003. One was 5 years old, $7K. The other was 8 months old, $16K. The guy I bought the 8 month old car from needed the money to…
… remodel his kitchen. This was mid-2004.
I don’t want to spend $7K on a car… I don’t want to spend anything on a car. I want to have the groceries delivered once a week to my waterfront villa in Costa Rica…
Watch Tonight’s Oprah: Join the Debt Diet.
70% of Americans are living paycheck to paycheck.
McCulley at Pimco said in 2004 that the Fed would stop at 2 1/4%; He has the worst track record of any Fewatcher over this cycle.
And he still makes a nice six-figure salary.
Found on craigslist
Nevermind the above comment.
I’m starting to find cometing sellers finally. By using zip realty I was able to see these townhouses that are being selling in the same complex and their list price history. As one moves their prices down, so does the other. Can’t wait till more sellers start competing with them.
Suddenly, I realize I’m in really good company here on this board.
People who save, people who value family, people who think ahead.
Maybe it’s what this whole thing has come down to…
Those who ‘freak’, versus those of us who ‘don’t freak’.
Kinda sounds like most of here ‘don’t freak’.
My twenties and early thirties taught me the value of ‘not freaking’.
But how do we get through to Moms and Dads who ‘might freak’ in the next couple of months?
Short of an Amber Alert, I don’t know if we can beat the RE-Media complex.
The Real Estate Industrial Complex advertises in the local papers, and on television.
Television and Newspapers need money to make news, and pay people.
If real estate looks bad, and they report it, the Real Estate Industrial Complex threatens to pull advertising.
Hence all the charts with bad numbers on page 10, and the optimistic articles on page 1. The media say ‘we’re giving out the facts!’ While the RE Complex tells the people on the airplane…
…as people are getting sucked out through open holes in the aircraft cabin…
“Please keep your seats, ladies and gentlemen. We’re only experiencing a bit of turbulence. You’re captain has the seatbelt sign lit. We should be arriving in ______ soon.”…
…and you look to your right…
…and the dude next to you gets sucked head first out the ceiling…
…screaming…
…while a flight attendant hands you a Coke, and a Smile.
It’s late but I’m here with you, Auction. There are a good bunch of people here, and major props go to Ben for starting and maintaining this blog. I think that the best we can do is to continue doing what we are doing….educating each other, sharing information, and also getting it out to others. I’ve sent the link to this blog to a few co-workers, my daughter and fiance, and friends because I know that not everyone is aware of these kinds of resources. I’m a person who does her homework when it comes to purchases and other decisions so this was a natural thing for me to seek out information. Not everyone is like us….but that doesn’t or shouldn’t prevent us from trying to help people stay out of trouble. Now for the ones who have already taken the dive into the deep end, well, I guess we can throw them the donut and hope they grab hold.
It IS all a crazy routine, though…the media, the dance that they all do, the public….the folks who freak, and those who don’t.
BayQT~
I’ve created a big sign, so when I see these realtors standing on corners, I park my car, get out, and wave my sign that says, “Don’t catch a falling knife.” “The music has stopped.” “The Fat Lady has sung.” “It’s a bird, it’s a plane, NO! It’s a housing bubble!”
And about anything else I can think of
Since it’s a blog and we can’t see you, tell me you’re joking, right?
If not, you’ve got to let me know where you are — photo op, ya know? Maybe we could do a group sign-twirling thing or something…
In Florida! LOL! Who wants to see pics of it haha! I wonder if one day I’ll go to jail for harassing the local realtors or disturbing the peace?
40 or 50 year loans keeping us from a collapse as article suggests? Let’s think about that one. The rates are higher for these loans vs traditional 30-year, equity builds far more slowly with 40/50 year loans, and most importantly, these loans don’t decrease the monthly payment that much - maybe by 150.00 or so on an average loan. How can any gov allow such instruments to be sold?
40 year loans are not new, and were invented during the last R/E boom in mid 80’s. What is different today vs. the mid 80’s is that 7 months ago, our friends at Fannie Mae announced they will begin buying these loans from banks for the first time, which sort of made these loans legitimate. Bottom line is, anyone who must use a 40 or 50 year loan to buy a home ought not to be buying a home, which is why we should be so disturbed about Fannie Mae and our gov’s implicit backing of these ridiculous instruments. Anybody even mentioning these loans as viable and good strategy is irresponsible. The whole world, including Fannie Mae, Mr. Low and Mr. Bove have gone nuts.
What is interesting about this whole housing situation is that unlike so many other profound events in history, we will all get to see how this story ends. I don’t think the end credits will roll as soon as many here predict, but just the same, it will be quite a show - eventually.
have been looking at the CT real estate market for a while (Norwalk-Fairfield area) and looks like prices are going down a bit here as well… reduced signs are oppping up more often now, and some houses (in the $500K-600K range) just take forever to sell (moved into my new area in august and my neighbors’ still has not sold yet). But some sellers are still in state of denial. E.g. depressed town of bridgeport with 40.mil tax rate and bad schools: a guy bought a small townhouse there for 30 months ago for $250K and in october wanted to sell it for $430K. Last week he went down to 399K. Still way overpriced if you ask me. But the more they give people 40yr loans, the longer they can hope the bubble will last: a 40yr 100K mortgage at a rate of 6.5% is a monthly payment of 585 as opposed to a 30yr loan of 6.25% with a monthly loan payment of 616 for the same 100K. But the average (that is median) salaries are not outpacing inflation here, so sooner or later prices should go down… question is when
You know what I would like to see? I would like to see the relationship between people and their homes change. There was a time when you bought a home to live in, and there was no side thought about how much equity was already built in, or how much you could gain, or what the property was worth….you just LIVED there. And there was also a time when taking a second mortgage was THE LAST thing that people considered doing unless there was a dire emergency. I guess the dire emergency these days is the new H2, a boat and a trip to Europe. Another scary thought is that if families don’t get their priorities straight, they’ll be ushering another generation into the world of bad money habits. People really, really have to get a grip.
BayQT~ (going to bed now :-))
Night Night
Does anyone know a good blog for the multi-residential bubble? I sold my large san fernando valley home in september and made a nice profit. When the timing is righ (carnage over) i would like to invest in units.
Thanks.
Good morning Agent….Ben has this link in his list. It’s for SoCal. You may find helpful info there:
http://www.socalbubble.blogspot.com/
BayQT~