‘Easy-Mortgage Chickens Coming Home To Roost’
Thw Washington Post reports on interest rates. “The U.S. Federal Reserve may need to raise interest rates again to tame inflation and the ECB can afford to hike euro zone rates further now that it has proof of solid economic recovery, the OECD said on Tuesday. The Organization for Economic Co-operation and Development said the U.S. central bank had to get to grips with stubbornly high inflation, notably fueled by rising labor costs, and this could prove a more real concern than the spectre of a housing market collapse.”
“‘There’s a trade-off. You don’t want to precipitate a crash but at the same time you want to rein in inflation,’ OECD chief economist Jean-Philippe Cotis told a news conference.”
The Chicago Tribune. “With real estate markets sinking fast and the job market in low gear, critics of the Federal Reserve are warning that the central bank has overtightened the nation’s monetary spigot. Fears are growing that the Fed has dried up too much of the economy’s activity, all in the name of choking off inflation.”
“For months, Americans have been leaning on credit cards to shell out more money than they make. But economist Peter Morici says that trend can’t last indefinitely. ‘With savings so low, higher interest rates, especially mortgage rates, could cause an abrupt change in consumer behavior,’ he says.”
“Such a risk is so worrisome, says Morici, a professor at the University of Maryland School of Business, ‘the Fed should not raise interest rates further. Sometimes the best monetary policy is to do no harm.’”
The Post again. “In a year when politics is being roiled by angry debates, it might seem odd to imagine the midterm elections being waged over square footage and closet space.” “Flat wages and rising debt nationally have converged to leave millions of middle-class households feeling acutely vulnerable to bumps in their financial planning. The most visible of these are rising energy prices and a softening housing market.”
“A less obvious but powerful variable is the interest paid by people carrying credit card debt or mortgages whose monthly payments vary with interest rates. People buffeted by these trends have given rise to a new and volatile voting block. ‘People like this are making a large ripple across the body politic,’ said pollster Bill McInturff.”
“This year could mark the emergence of what might be called mortgage moms, voters whose sense of well-being is freighted with anxiety about their families’ financial squeeze. Among the most exposed are those who bought into one of the great fads in mortgage lending in recent years, adjustable rates. Next year, $1 trillion worth of adjustable-rate mortgages is scheduled to readjust to a higher interest rate for the first time.”
“The political implications of these trends are obvious. ‘A large number of voters have a definite foreboding about the economy, and that isn’t good news for incumbents,’ said Gregory S. Casey, CEO for a nonpartisan electoral analysis organization. ‘They feel disappointed in government institutions that they think have let them down.’”
From MSN Real Estate. “Those easy-mortgage chickens are coming home to roost. For many Americans, this is scary news, if hardly unexpected. Everyone who took out an ARM or another equally appealing low-rate mortgage over the past few years to buy a house, at times beyond their means, knew that someday their payments could balloon.”
“Those home buyers may have thought they would be able to flip their houses quickly and avoid the rise in their mortgage payments. But now, many of them are finding themselves stuck in a house they may soon no longer be able to afford, and, as the real estate market peters out, there’s little they can do about it.”
From Bloomberg. “The news isn’t all bad if you are looking to buy in this market. Between builders eager to discount and homeowners needing to sell, there may be as many as 4.7 million homes for sale now, according to Friedman, Billings, Ramsey Group.”
“‘Since homebuilders have financial incentives to sell new houses in inventory promptly, we expect them to aggressively offer incentives and discounts to homebuyers,’ writes Michael Youngblood, Friedman’s managing director of asset-backed securities research. ‘Given the average industry profit margin of 25 percent, they have ample latitude to do so.’”
“While buyers will see some heavy discounting if the current slump is prolonged, sellers should beware. More foreclosures put more homes on the market and sink prices further.”
Lets tie up some loose ends here:
Per Mr Youngblood in the May 15, 2006 issue of BW:
“we expect the greatest gains in Bakersfield (43%), Ft Myers, Fl (42%), … I dont expect prices to fall in 2006 (nationally)”
This guy is obviously blind or a member of the REIC or BOTH!!!
here is a report on how “good” michael youngblood is.
http://immobilienblasen.blogspot.com/2006/07/fundstck-des-tages.html
A large number of foreclosed homes that can’t be sold for the amound of the mortgage balance will sink lenders. Does anyone think Resolution Trust Corporation won’t be resurrected?
Wonder why Merrill is buying subprime lender National City today ?
Other subprime lenders rise on this news.
That is a GOOD question? Reminds me of when YHOO and all the other .comers were gobbling up all that crap. They were flush with cash/stock and needed to buy something to give them a short term burst in earnings. Unfortuantely, the boost was only short term. Then the writedowns began.
I assume this will go down the same way???
Good reason for me not to buy any out of the money puts on these guys. Even when the cash flow starts running the wrong way someone might come gobble them up for a premium to the share price while I lose my entire premium. This may be a good reason why other subprime lenders may rise on the news. People like me know they are up against players with deeper pockets and fold thier hand.
The banking industry is incestuous and seem to like to bail each other out. I don’t know if it’s a massive short squeeze or what but I saw this sort of thing around 2001 or 2003 when you had banks that should have been in a lot of trouble, get bought out by a bigger fish.
Just a wild guess, could it be that Japan and China are financing the Iraq war by buying US bonds?
Friends of mine who once worked for the RTC have been asked to resubmit resumes. Now, this is just dinner conversation and not worth spit…
But I’m betting the RTC will be reformed by the end 1Q2007.
Asked by whom?
Really?? Who asked?
Neil. That’s worth a whole lotta spit, IMO. Great scoop. Keep it coming.
Whom they were asked by, I don’t know (I wasn’t present, they wouldn’t tell) And when I asked details, I was politely told I could tell people (as long as no source was revealed) but that it was my only “nugget of the night.”
All I can tell you is that I have a small group of friends who are in banking and some cut there teeth in the RTC in the mid-90’s in *very* low level RTC positions (starting jobs, I’m not sure if it was out of college or after one year of experience in banking…). All but one have long ago left the mortgage side of the house but made a career of banking.
The one guy who is still on the mortgage side is at a sub-prime… so you can imagine the hugely negative opinion he has of the industry’s state right now. However, his career path skipped the RTC, so no job hop for him.
Just to be clear, the only people asked for resumes were individuals who had worked for the RTC, mostly co-located at large banks, who were at *extremely* low level positions the last time around. I’m not saying that higher level people haven’t been asked, they just don’t attend our wine parties.
Oh, every person asked was a project manager who had continued in a career of banking auditing/analysis.
Like I said, this is just “spit” until it happens. I have no reference and no source that is willing to be anything by anon. Maybe it was wine talking… Maybe not.
I met a few times with an old RTC hand this spring in the course of some negotiations. He had been in charge of hundreds of millions worth of commercial properties all over New England at the peack of the RTC business. By February this year he had some $40 million in cash from investors who were looking for distressed property, and was turning away investors because he could not yet find anything cheap enough.
From what I can see, there are lots of sophisticated investors ready to come in and support commercial real estate when the cap rate makes it worthwhile.
Where the hell they will find investors to go in for all the empty McMansions?
I would expect an RTC encore. But, like everything else, it’s different this time. The regulators are there to protect the depositors and presumably, the FDIC from losses. This time around it’s largely the GSEs, sub-primes (to a less extent as they sell loans) and the MBS owners holding the bag. For the MBS, it’s tough chit. For the GSEs the RTC won’t help. That will be a bail-out package that will make Katrina look like lunch money. Some feel the larger member banks are well enough diversified to take their lumps - writedowns - without help. The smaller regional banks might sink…. and the RTC will have some mopping up to do, like in the ‘89-’92 timeframe…
one of the tricks to get around the trouble would be to stick it to all those foreign pension funds, hedge funds etc. that own GSE paper and bail out the US depositors and speculators. One of the big investors in US mortgage paper are the Dutch pension fund ABP and their hedgefunds; if they get to hold the bag I’m sure the Dutch housing bubble will finally deflate as well
I really hope you’re kidding.
I don’t think he’s kidding, but I really hope he is wrong.
“amount” not “amound.” Sorry.
Ok, new blog rule. If we’re smart enough to understand your post then we’re smart enough to replace/insert one or two words. You don’t need to correct them.
If we’re not smart enough to resolve typos then we’re probably not following what you’re saying anyways.
Kp in md pple oy se te ft ad lt ltr awy.
That’s OK. We just don’t want to owe you anything. Thanks anyway.
I went in to see one of my clients today to get a feel of whats going on in the mortgage app area. I was the only one in the bank except for the 2 tellers. No loan officers, No customer reps, No customers waiting in line. No nothing..
I hope the place doesn’t shut down there a good client.
Honest Appraiser, what geographical area are you in?
MASS
What part of MA, primarily? Essex, Middlesex, Suffolk, etc?
Norfolk, Sufolk & Middlesex
Unusual for a bank to be empty after a 3 day weekend.
The local newspapers are hiding the enormity of the problem because of the ad revenue.
Idiot Portland Sunday Telegram ran a feature story about how well shorefront real estate was doing on Sebago Lake.
Unfortunately, the reporter knew squat about the dynamics of real estate…
A DOZEN MILLION DOLLAR PLUS LISTINGS DOES NOT INDICATE SQUAT YOU MORON!!!!!!!! You can list ‘em to the moon if you want, but, it’s only when they SELL!, that you can crow about something.
Talk about journalistic ineptitude.
But after my Labor Day road trip, I think all of New England is now up for sale.
Lottsa high end “Greatest Generation” gentleman farm stuff.
Good luck peddlin’ these high energy/high taxes & maintenance stuff.
It’s a new ownership paradigm.
TESTING
The new server is FAST!!!!!!!!!!!!
OT,
Looks like the new building of the future is green building. Off the grid homes are spiking alot of interest, these homes will be smaller,cheaper and more efficient..does anyone have any input on this?
Got to get the cost down. Right now, as cool as they are, those houses are cost-prohibitive unless you’re an eccentric millionaire.
Greenbuilding has been a huge wave in the commercial/instituional building business.
The USGBC is trying to create a residential standard.
I was in Costco over the weekend and what book did they have featured.
Sarah Susanka’s The Not So Big House.
Yes, the tide has/is turning.
This is my area of expertise. “Green building” is just a buzz word that could mean a lot of different things to different people, but really refers to sustainable building practices. The USGBC has a rating system for how “green” a building is. I work mainly with commercial buildings, but homes can be LEED certified, too. You can get points for siting, use of renewable and energy efficient materials, water saving features, and energy efficiency for heating and lighting. LEED certification for commercial buildings generally means a higher initial cost with a better long-term return. Housing generally has a better cost/savings ratio, depending on what you build. The reason most people think a “green” building is so expensive is that most of the homes built so far are show pieces. Building “green” can mean things as easy as orienting a house to the south to capture the sun, building smaller, using more efficient insulation and heating, or using renewable materials or renewable energy. Simply eliminating a few wasteful features will make one home more “green” than another. It’s not all or nothing. It’s time we started looking at building better, rather than faster. I manage a code inspection department, and I can’t even tell you how many builders try to cheat on insulation. Insulation is the only building material in a house that actually pays you back over time.
You are preaching to the choir.
I am LEED AP and work in the commercial/institutional built environment.
The problem with LEED AP is point-mongering one can get a green certified building and have it be a poorly designed and constructed building.
Build great buildings and they will be more green than many LEED certified buildings.
Yes, there’s a lot of manipulation in the rating system, but I don’t mind that because it’s beginning to point designers and builders in the right direction. Without the LEED incentive we might not be where we are now.
I think Europe is a bit further on this path, but here too there are no easy solutions as it depends very much on the local situation and locally available options what is ‘green’. In my area there are some small developments with ‘green’ housing but even after 10 years most of those have some technical troubles left to be solved. There are also some high end green homes around that work really well but are too expensive for the general public.
The US has some nice initiatives for high quality prefab homes that could be really ‘green’ as well if production gets more localized and they add some more advanced energy features (shipping is now probably a huge factor in energy consumption…).
Yes and no. Solar is still expensive, but passive solar, many materials, simple design changes are not an extra expense. A couple dozen strawbale homes have been built here in Southern Oregon…. comparable to standard construction costs. HVAC expense can be minimized/optimized. Good windows are expensive, but cost-effective. Hardly see big builders using straw, however….tho I will. I prefer not to breathe thru Tyvec.
Copied from an interview w/Brad Pitt on Green housing designs for low income housing in NO: http://tinyurl.com/zjtwp
To try and change the conditions still found in New Orleans, Brad Pitt joined forces with the non-profit group Global Green to sponsor an architectural competition to design a green 12-unit apartment complex.
…….The next finalist’s design relies on newer green technology that uses the temperature of the earth to heat or cool the apartment.
“The Levee”: Drew Lang of Drew Lang Architects, New York, N.Y.
Petersen: They also draw upon a geothermal cooling and heating system, which in this area actually would work pretty well.
But many of the best green ideas are old ideas and that is what we saw in the third finalist, who uses a traditional New Orleans design called a shotgun loft to help cool the house with air flow and cross ventilation.
“NOLA ShotgunLOFT”: Fred Schwartz of Schwartz Architecture, New York, N.Y.
Petersen: Well there are a lot of natural shading and ventilation ideas that really stood out. The basic design of the shotgun loft is air circulation and cross ventaliation in the home.
The fourth finalist also uses the traditional shotgun loft design, He also designed all the living areas on the second floor in case New Orleans floods again.
“Rebuild Renew: Sustainable Design for the Holy Cross District”: Ken Gowland, New Orleans, La.
Pitt: It’s from a local architect, which we were very happy that a local guy made it in. This one really draws on the venacular of New Orleans housing.
Gowland: We sort of used the historic types of buildings that we build in New Orleans, which makes sense not just from an aesthetic point but also in dealing with flooding, climate, heat.
All the entries rely heavily on the use of recycled and energy efficient materials, like flourescent lights and reclaimed wood and timber. But what stood out for the judges on this design is the way the green roof is incorporated into the plans.
“GreeN.O.LA”: Matthew Berman and Andrew Kotchen of Workshop/APD, New York, N.Y.
Pitt: In planting the roofs, they are good for one — capturing water and two — keeping the place clean. And it’s relatively easy to do.
“Breathe”: Steve Dumez of Eskew+Dumez+Ripple, New Orleans, La.
The sixth finalist, also from New Orleans, designed windmills and river turbines to generate the electricity necessary to heat and cool the apartments.
Harnessing available energy is what Global Green wants builders everywhere to do.
Pitt: Yeah, again the change in thought is more … it’s more harnessing the available energy that’s there.
Curry: You know what’s really interesting about this is that this kind of thinking is oftentimes just reserved … it’s reserved for rich people, yet this kind of …
Petersen: Right, and it’s a real misconception. I mean, just the whole green movement is … it’s kind of misunderstood. There’s a real stigma with … that it’s for the rich and that it’s about tree hugging and saving whales. But there are these benefits, but it goes so far beyond that. And it’s really a question of our way of life. And can we live healthier.
Pitt: What if a city could actually produce more energy than it consumed? What if it could actually filter the air instead of pollute the air? And this is a new paradigm that we’re gonna have to adopt. It’s a long time coming, but we gonna have to start now and start advancing these technologies.
Oh, well, then look into Rural Studio. “An Architecture of Decency.” That’s REAL low income green building.
Pitt lifted some of those sound bites from William McDonough’s speech/article buildings like a tree.
http://www.mcdonough.com/writings/buildings_like_trees.htm
SSBGuy: I don’t think Pitt is supposed to be the heavyweight as far as design. He’s the limelight for the project but he knows enough to repeat the theories for MSM while selling the concept. (Kind of like the salesmen don’t engineer the products, they garner the attention and sell the talking points)
I provided that link thinking Global Green, or designer/studio names might provide a starting point for people doing their own research.
Saw something interesting on one of the History channels the other day, modern marvels or one of those genre… Anyway, the program was on levees and their failures worldwide from NO to Holland. Best thing I ever saw for these affected areas was a house design that had already been completed and in use in Holland that had a foam/concrete foundation on pilings, the whole house had the availability to rise up to 20 feet. While that wouldnt save your car at least your home would be high and dry,…..
_FLmtgbroker:
I think those are the homes that had to be fixed because they used some kind of wood cladding on the outside that was in in the ground (= in the groundwater) so it started rotting right away. So experience here is still very limited too …
We also have some free floating homes over here (with just some tube connections underneath), using a concrete or steel tube foundation. But it’s all really exception to the rule. Both the latest housing developments near my town are at least 1 meter below sea level (sea is about 10 km away here) and of course without any provisions for high water levels. A debate has started about who is going to pay for all the pumping when Holland gets wetter in the next years (which seems a sure thing by now). I see much higher tax bills in the future …
Good for him, he’s using info from someone in the know and helping spread it.
Give me a break! What a putz, Brad pitt is. What they need in N.O. is houses on peirs or better yet, houses that float. What are they, something like 20ft below sea level. A lot of good a “Green” house is going to do, the next time the Gulf of Mexico comes flooding in. It not exactly a wealthy population in the area. That’s why they got stuck living below sea level to begin with.
I agree! Brad Pitt is just another mindless do-gooder from Hollywood. He will do as much good for the people of New Orleans as Oprah Winfrey did when she stuck her fat nose into the mix after Katrina. Blow up Hollywood and salt the earth afterwards. We need a new Carthage.
He’s probably been cut off since the last baybee appeared and needs to do some groveling to get let into the magic kingdom again. Wasn’t it Ethiopia or something last time?
They are advertising home generators like a/c units now. Small, quiet, and not on the grid. I wonder what the neighbors think about the fumes?
They only run when the power is out, and once a week to exercise. The lower end ones are not that quiet, while the more expensive ones come down in noise (lower RPMs, better muffler, better housing).
Make no mistake, they are expensive to run. I looked at a small one to back up computers. During a week long outage, the natural gas bill would have been very large if my calculations were right. The woman at the gas company said that after hurricane isabele, lots of the wealthy folks that had them were calling in and complaining about the 4 figure natural gas bills for the week.
Personally, I like the idea of running air conditioning at night during low demand times, freezing water and cooling with that during the day. Check out the ice energy bear unit. It seems like that could be run via solar during the day, for a very low energy (but expensive) cooling solution.
Also LED lights are taking my interest, because it is easy to run some gelled sealed lead acid batteries as a backup for power failure. They require so little power, it’s wild.
I can’t wait till prices go down so I can buy a house and build an automation system to run it, and manage energy loads. I want to attempt a nearly fully automated swimming pool as well.
I am a huge fan of LED lights. I am just building an out door solar powered LED light system. This one, unlike those dinky things in the stores, puts out very natural light and can keep 10 night light equivalent lights on for 4 hours a night.
I am still debating whether I should use lead gel or NiMH. I don’t have good data on how efficiently NiMH charge if you over specify the capacity. As I understand it they get more efficient the slower you charge them.
Oliver
Actually the building of the future is a high-tech tent to house the millions of people who get foreclosed on their homes in coming bust. I personally view the housing industry (along with media and banking) to be part of a system that serves to churn out food for the debt machine. We’re living a kind of hi-tech serfdom in which we have cool gadgets but virtually no freedom to relax or enjoy the fruits of our labors. It’s a total scam. Small, simple, energy efficient, and small mortgage. That’s the future. Just as Hummers are starting to be looked down on now, huge McMansions with bubble mortgages will be something to avoided for fear of social repercussions.
Good comments, BV…I’m in full agreement.
wickiups rock the indians had it right.
I wondered how long it would take for the “mortgage moms” story to appear here. I’ve been saying for two years now that this housing bubble + the inability of the average FB to get out of the trap by filing for bankruptcy will far outstrip Iraq and any other goofy issue in the coming elections. Whether this is justified or not, I believe the herds of FBs will stampede the polls and vote out whoever they feel is to blame for all of it. My guess is they’ll blame whoever they see on TV.
Vote out whoever they blame, and vote in whoever promises the most gifts. This country is doomed.
Yes, look at this quote: ‘They feel disappointed in government institutions that they think have let them down.’
So it’s always some one else’s fault, never their own.
Now the big question is, which political party will out-bid the other? 10 years ago that was a no-brainer, but not any more.
“…but not any more.”
Got that right.
I am so pissed after reading this story. Pardon the French, but take some effin reposnsibility for yourselves. I am so sick and tired of adults (who should know better) taking care of themselves. I confess I was one of those college students who always asked mom and dad for money. However, when dad finally told me the ATM closed, I knew he meant it and from then I paid my bills. Granted I wasn’t Rockerfeller, but no banruptcies and bills paid on time. That doesn’t mean I didn’t have to scrimp to get by, but I learned the lesson well when dad cut me off from his account. Sorry for the rant, but I just get sick to my stomach hearing about mortgage moms voting angle. So, we should feel sorry for you because you bought a POS for $850K and now the place is worth $600K and not only are you under water, but the ARM just adjusted. On top of that you have $1,000/month for your H3 and Escalade as well as the private school tuition for your 2 kids and the $100K HELOC ARM, and the $50K in credit cards. BOO HOO! You wanted to live like Trump and now you want a bailout like him. Too bad!
Been to a kids’ soccer game lately? The parents are more uncivilized than the kids, and that’s saying something. It’s ALWAYS someone else’s fault, never them or their precious baybees.
LOL — I was at my son’s ice hockey tournament this weekend. There was a man/parent sitting away from most of the parents and who had a son on the other team and he was hooting, hollering, bitching about everything against his son’s team — he seriously had anger/frustration problems that were coming through at a kid’s hockey game! I wondered if he was wound up from stress of being a FB … and this was his outlet!!
On the soccer game theme, I saw a video on Pardon the Interruption on ESPN yesterday, where in a 13-yo American football game, a kid got a late hit after the play was over. Not particularly bad, but it still deserved a penalty. So the offender is walking away and the offendee’s dad comes and T-bones the kid. LMAO.
Just in case there was any question about a crackdown on suicide lending …..
Jtscommunities.com, ‘The Estates at Lincoln Crossing’ (SAC, CA area)
NO PAYMENTS ‘TIL May 2007*
Sales price $502,000. Seller to make Principal & Interest portion of payment of $2170 until May 2007. Buyer responsible for property taxes, insurance, HOA dues and Mello Roos bonds. Not available on all loan types. See agent for details.
$1101* PER MONTH PAYMENT *
*Sales price $522,000. Pay Option Arm Program with initial interest rate of 1.25%. Principal & Interest of $1101 base on 80% loan of $416,000. Loan amortized for 40
years, 9.95 life cap, APR 7.33. Loan may have deferred interest.
4.75% FIXED RATE FOR 3 YEARS*
*Sales price $515,000. Interest rate of 4.75 fixed for 3 years, then converts to one year ARM.
(As the current FB’s fall off the end of the conveyor belt, new ones will jump on. Don’t know what happens to that pile on the floor though…..)
I feel the same way. We sold our house when my husband’s programming job at CMGI went bye-bye. He was unemployed/underemployed for a couple of years and so we have been renting ever since. I don’t feel entitled to own a home, and quite frankly my older son is much more outgoing and community-minded than most of his peers. I attribute some of that to the fact that we go to the public playground and library rather than playing in some private (and often lonely) backyard.
Yes, we will buy a house again someday, when it makes sense to do so. We sold to avoid ruining our credit. I didn’t want to work full-time just to put a roof of our own over our heads. My children don’t know what we don’t have, so they certainly don’t miss it. Some people look down on us because we rent, but that’s actually been a pretty good litmus test for friendship.
The one plan, I can get behind is to offer mortgage workouts in exchange for long-term enlistment in the military.
That is the only way we can maintian our oil imperialist tendencies and maintain an all “volunteer” armed services.
Most of the FBs would probably make great low-level soldiers, they don’t think for themselves, they would basically be a lump of clay for the military to do with them what they will.
Think of it as a GI Bill for buying overpriced RE.
LOL, now THERE’s an idea. Problem is, most of them are fat, lazy and out of shape.
All the more reason!
Guess I’d have to get behind that one…We’ll need the FBs cuz Heaven knows the comfortable classes sure won’t be seen making any sacrifices …others take the risk, they grab the spoils. (McCains and too few assorted others excepted!)
good idea, they could take their Hummers with them (to ensure that the US military needs even more fuel in future, so we keep this game going a bit longer).
Except that won’t be able to afford the gas to drive to the polls…
Another issue feeding the FB’s/”mortgage moms” will be the fact that national incomes haven’t risen significantly in the last few years to help them cover their payments and some companies are starting to do some lay-offs (e.g. INTC announced 10.5K cut today) as desired growth hasn’t panned out. And job opportunities aren’t what they used to be 6+ years ago due to decline in manufacturing jobs shipped to India/China in exchange for lower-paying service jobs (e.g. realtor/broker/lender). The real-estate boom served as a panacea to this issue as people felt OK about this the last few years because their paper-wealth from rising home/property prices made them feel wealthier and that the loss of the better job wasn’t a big deal because they could do better in flipping real-estate and commissions off a high-number of loans (spurred by mortgage fraud and pushing of “suicide” exotic loans to a mostly naive borrowers).
Now that the new-found paper wealth is unwinding and more people find they are financially screwed, I expect the topics of outsourcing and (anti-)immigration to be hot political buttons this year and ‘08.
US of A, will be a third world country if this continues. A generation indebted, jobs being outsourced (offshored) and illegals competing to be hired & getting paid under the table.
If you are illegal health insurance is free, no need to worry about geting SS# & paying taxes, uncle SAM has no idea about you.
Now in this environment how can housing keep on going up, you need a secure system, with enough security to make a 30 yr. comitment.
“The Organization for Economic Co-operation and Development said the U.S. central bank had to get to grips with stubbornly high inflation, notably fueled by rising labor costs,”
The first part of this sentence sound okay, but who came up with the sudden increase in labor costs accounting for prices going up everywhere? Doesn’t all the outsourcing count for something?
SFM — good catch.
Stop worrying about the illegals. There are far more stupid Americans who think they can get something for nothing. There’s your problem.
The socal bubble is largely fueled by illegals pushing up from the bottom. You can’t discount them.
Again I point to the example of the guy who qualified for a mortgage on my overpriced home. He was a cook in a deli on Ventura Blvd. Now he commutes 1.25 hrs each way. This guy couldn’t even figure out how to turn on the central heat.
Do you think he read his loan docs?
Agree. Look at where the bubbles are; locations with plenty of illegals working hard and trying to better themselves. Unfortunately, they’ll be walking away from their 3% down, stated-income mortage soon leaving a “Bankers Realty” sign in their place.
I am wondering what illegals have free health insurance? I worked in the healthcare industry for a few years, at a major hospital chain and for a few physicians. I never met an illegal who got free healthcare. Any we knew came in and made cash payments, sometimes for a couple of years but they paid cash.
Go to the emergency room…free clinic. Oh wait, they all closed because they could no longer afford to stay open, what with so many people using them as free clinics.
Poor blacks where I live use an emergency room as their only source of healthcare (public hospitals), so it’s not like it’s just illegals.
“you need a secure system, with enough security to make a 30 yr. comitment.”
sure, this system is available as “Homeland Security” …
(but make the 30 yr commitment a lifelong one).
Rather than “mortgage moms” we will have Mortgage Damsels In Distress. At the peak, condos were disproportionately bought by single women and with 100% financing. They might be the next voting block to pander too.
I just don’t understand all of the clowns that spend way above their means and then cry to the nanny government when the market turns on them. Mortgage Moms….Give me a break!
A by-product of the no-doc loan process is that criminals sometimes get in on the gig:
Elk Grove, Pot Houses, and the Flipper Effect
Elk Grove Pot Bust Update
Pot House Neighborhoods: Why Here?
OT-Intel announces layoffs of 10,500
http://www.marketwatch.com/news/story/story.aspx?guid=%7BDC980752-C1D5-43EA-9D46-1D8144D752ED%7D
Goodbye Folsom. This is by far the largest employer in that town and there are many marketing types at the Folsom campus - the very type being targeted.
Good By Santa Clara operations.
HP is still in process of downsizing its 15%
Sun is yet to disclose their downsizing plans it spoke about.
Each one is 100,000 with 15,000 in layoffs so thats nearly 45,000 with majority comming from Silicon Valley.
Why! home prices in SV are to high for employers to provide higher salaries and decling profit margins. Its always cheaper to have employees in cheaper states with cheaper salaries.
From what I remember, 80% or more of the new buyers use exotic mortgages (suicide loans) in SV. Some are multi-families purchases, usually two or three families sharing the house.
Sometimes I think that we are just moving bad apples to different barrels.
“Such a risk is so worrisome, says Morici, a professor at the University of Maryland School of Business, ‘the Fed should not raise interest rates further. Sometimes the best monetary policy is to do no harm.’”
Too bad Greenspan didn’t heed those words.
I wish I could just go to some tax-friendly nation (Tonga? Lichtenstien?) and get politcal assylum!
I’ll be DAMNED if I’ll bail out the “Mortgage Moms” and “Howmuchamonth Harry”.
I have a great idea! Why don’t they get rid of the MORTGAGE INTEREST DEDUCTION for i/o mortgages? That would be a start.
Just get rid of it period. It only distorts the price of housing.
Agreed. Now would be a good time too since house values are going to be declining anyway.
Wrong..didn’t anyone ever tell you that house prices never go down?
Come to think of it I had a girlfriend once that said…………………..never mind…
Actually, get rid of all tax breaks for houses. If you removed the property tax too, that would bring it in line with other financial assets.
These simple changes would do much to reduce corruption in local politics as well.
An while we at it, let me harp on about the virtues of deflation again. If folks new their house would be worth less in 30 years than it is now, they would buy smaller and smarter.
Oliver
just be happy that you don’t live in the Netherlands which has the most favorable HMD in the world. Effectively nearly 50% of every mortgage is paid for by the tax office. And on top of that we probably also have the most and biggest homeowner/landowner/developer incentives and subsidies in the world.
Talk about getting rid of the HMD has been going on for about 30 years here, and many economic analist have advised to reduce or remove it. But in the next elections not ONE of the many parties has the courage to raise their voice against this stupid HMD, so I’m sure the HMD will continue until the Dutch housing bubble has crashed completely (certainly the Dutch tax system will crash along with the housing bubble).
Don’t forget REIT & MBS [or their equivalents in the Netherlands] and budgets which are dependent on them [esp. retirees].
“But economist Peter Morici says…”A sharp increase in savings could throw the economy into recession.”
Yeah, that’s the last thing people should do…save money. Keep cheering Pete, you gotta keep this debt financed bubble going. What a jag!
If that is true, that’s not saying much for our “robust” economy, is it?
“This year could mark the emergence of what might be called mortgage moms, voters whose sense of well-being is freighted with anxiety about their families’ financial squeeze.”
Nah, they’re too busy driving their SUV’s at 90 MPH between socccer practices while yakking on their cell phones, weaving through traffic and screaming at little Kaitlyn and Joshua to be a real problem. It’s the Hen-Pecked Mortgage Husband ala “Suzanne” who suffers when he can’t bring home enough bacon to satisfy the overindulged harpy he lives with.
“The news isn’t all bad if you are looking to buy in this market. Between builders eager to discount…”
In Chicago I haven’t seen builders discounting. Incentives, yes! But not discounting. Is anyone builders discounting it in their area?
I can’t say I’ve seen builders discounting here. Yet. But here’s a story that references a loft project for which ground hasn’t even been broken yet. (I rode by the site a couple of days ago.)
http://www.azstarnet.com/metro/145182.php
The comments that follow the story are classic. My favorite: “Wow, what a deal! Starting in the low $400’s, I’ll take 2 please ;-)”
I saw some “urban lofts” recently built in Taos, New Mexico. Somehow, that just seemed wrong.
I thought Taos, NM was the next “HOT” area?
You’re kidding. Where did you see that? Taos is like Telluride, Colorado. Not even that wealthy. And talk about no jobs!
I noticed that they had a UNM campus on my last drive through there. Usually a university is enough to keep a small town going. Anybody know what the focus of that campus is?
Check out http://taos.unm.edu/spirit/generalInfo.php for general info, and http://taos.unm.edu/academics/fall06.php for a list of fall courses. This is more of a 2-year Comm College setup. Note that most of the instructors are part-time, i.e., paid by the class - so no benefits, etc. The UNM Branch campuses are feeders for the main campus in Albq.
Check out http://taos.unm.edu/spirit/generalInfo.php for general info. In NM, the branches of the UNM are basically 2 year Comm College type feeder campuses to the main campus in Albq. Note that most classes are taught by adjuncts, so they get paid by the class - no benefits, etc. Doubtful the campus has much of an economic impact. Can find a list of current lower division fall courses here http://taos.unm.edu/academics/fall06.php and upper-division here http://taos.unm.edu/academics/extended_university.php
Check out http://taos.unm.edu/spirit/generalInfo.php for general info. In NM, the branches of the UNM are basically 2 year Comm College type feeder campuses to the main campus in Albq. Note that most classes are taught by adjuncts, so they get paid by the class - no benefits, etc. Doubtful the campus has much of an economic impact. Can find a list of current lower division fall courses here, http://taos.unm.edu/academics/fall06.php and upper-division here http://taos.unm.edu/academics/extended_university.php
Could very well be. This week’s BAIES (SF Bay Area real estate group) initial topic is “The Hot Real Estate Market in New Mexico & How to Get In on It”
When my wife and I attended 4 years ago, there was a similar talk for Phoenix, and we all know now how fast the equity locusts moved in (and out) on that one.
I suspect the bulk of people buying in NM now are from CA. Inventory increasing in Albq. I don’t really follow SF.
Locals are priced out in SF and a lot of Albq as well. Pulled some figures off a SF realtor website - http://www.santafeone.com/nl
SF 2005 3rd Qtr
Northeast - 42 sold, median price $682,500
Northwest - 24 sold, median price $432,500
Southeast - 44 sold, median price $610,000
Southwest - 106 sold, median price $260,000
Total City of Santa Fe - 216 sold, median price $364,000
SF 2006 1st Qtr
Northeast - 34 sold, median price $717,500
Northwest - 12 sold, median price $430,562
Southeast - 39 sold, median price $582,000
Southwest - 132 sold, median price $271,857
Total City of Santa Fe - 217 sold, median price $308,000
SF 2006 2nd Qtr
Northeast - 42 sold, median price $712,500
Northwest - 13 sold, median price $360,000
Southeast - 54 sold, median price $575,500
Southwest - 149 sold, median price $275,000
Total City of Santa Fe - 258 sold, median price $352,000
So, the median price for about 3/4 of SF is more than about 10x the median household income of about $45,177, and the other 1/4 is about 6x.
See http://www.freenewmexican.com/news/48532.html
Another potential issue regarding Taos is that they are not close to anything. 70 mi to SF via state highways. Good parts of it one lane each direction.
“You’re kidding. Where did you see that? Taos is like”
I think Ken meant “hot” as in “death valley in summer”.
McCloud would feel right at home.
I see quiet discounting here in Portland, OR- lake-view condos were $265K two months ago… each successive Sunday ad has a lower price - $245K last Sunday.
“…there may be as many as 4.7 million homes for sale now, according to Friedman, Billings, Ramsey Group.”
–
All I can say is “ouch”, 4.7 Million homes and inventory is still being added daily!
I love the smell of Napalm in the morning.
It’s not Napalm..it’s cash and equity that you smell burning..
This could get ugly if the gruberment decides to bail out the FB, but I don’t know how well that would play out… Taxing people into prosperity never works, especially when the people in question are broke. I suppose they could merrily forgive debts and such, but the new bankruptcy laws are soooo nicely timed that it seems more likely that the goal here is not to bail out the FB’s but to make certain more people are moved down the ladder into poverty. Poor people make better slaves since they lack the economic freedom to be able to make choices, much less revolt. I am betting that will be a more likely outcome than a bailout for the FB’s… now, banks may get bailouts, of course - wouldn’t want the rich and the people who helped start this mess to suffer, now would we!
I don’t know how those of us who didn’t buy into this BS will fare… we weren’t reduced to poverty, which no doubt annoys the people in charge… maybe letting banks fail with our savings in them would work? Hmmm…
I also wonder that if in the end, when housing is affordable, we’ll be competing against hordes of illegal immigrants and druggies? Ugh…
Hideous thought: Bailout the FBers, and moral hazard kicks in, and it heats up the housing market again. Even if they limit a bailout to people who can show they committed no perjury on the “liar loans” and can prove use as Primary Residence, it will re-heat the bubble catastrophically, for those of us who don’t want to debt our lives away. There is really no saying “just this once”…people will either disregard that, or keep a mental reservation that of course they will rate the same forgiveness in the future, if need be, for “keeping the economy going”.
“Hi, I’m Stanley Johnson, and I can MAKE you pay for my stupid A$$ choices. Because it’s the American Way.”
yeah, mass suicide is so much better than bailing out people who got the hose from Bush’s corporate pals who are now protected by the bankruptcy law they helped write. {{{{extreme sarcasm}}}}
Hideous scenario #2: Wage slavery/lifetime debt/elimination of entitlements/reverse mortgages for the middle and working classes. Bailouts for the banks. Rising rates and penny-on-the-dollar residential RE for the wealthy. In short, the Latin-Americanization of the USA.
I have a feeling that this scenario might be it.
The question is what happens to the prudent people?
“The question is what happens to the prudent people?”
They’ll become wealthy.
The question is what happens to the prudent people?
….move to Canada???
“..From MSN Real Estate. “Those easy-mortgage chickens are coming home to roost. For many Americans, this is scary news, if hardly unexpected. Everyone who took out an ARM or another equally appealing low-rate mortgage over the past few years to buy a house, at times beyond their means, knew that someday their payments could balloon.”
Going with the poultry theme..I think maybe people were playing “chicken” with their finances and the oncoming truck just ain’t swervin’.
“Those home buyers may have thought they would be able to flip their houses quickly and avoid the rise in their mortgage payments. But now, many of them are finding themselves stuck in a house they may soon no longer be able to afford, and, as the real estate market peters out, there’s little they can do about it.””…ok, so you get really lucky and find a GF to buy you house, where are going? just to some other overpriced house…hmmm…more transaction costs…the banks and brokers love it…the laywers love it…
“as the market peters out”…exactly..they borrowed from Peter to pay Paul, now they’re all ending up with sore peters…#$%@& ‘em I say….
I just can’t feel any sympathy for these people. They brought it on themselves. I am sick of their whining already. Look, it’s simple, did you really think that a 1/2 million dollar home only costs $900 per month? I know many people lack common sense, but really now..just how stupid does one have to be to not grasp that a $40K or $50K income, just doesn’t pay for a 1/2 million dollar “crib”? Well, now it’s your crib and you can @#$%^ cry in it.
“‘There’s a trade-off. You don’t want to precipitate a crash but at the same time you want to rein in inflation,’ OECD chief economist Jean-Philippe Cotis told a news conference.”
So which is it, the frying-pan (housing crash) or the fire (inflation)?
Well said GS
Either way, most people are going to get fried.
I wonder what the fed will do? Personally, I believe that shutting off the flow of money into the US would do the most damage. Thus, I believe the fed should raise rates to benifit the greatest number of people.
Either way, BB is going to get a lot more blame than he deserves. I aplaud a man who steps up to a job requiring an asbestos suit. He cannot win; I just hope he sticks to his guns for as long as possible.
*Then he can drop money from a helicopter to restart the economy.*
What’s it going to be, BOY? YES or NO? (meatloaf: paradise by the dashboard light)
it’s going to be more manipulation of the CPI numbers for sure. Eurostat and the BLS will be working overtime …
“This year could mark the emergence of what might be called mortgage moms, voters whose sense of well-being is freighted with anxiety about their families’ financial squeeze.”
Let ‘em cry all they want. The crooks they elect still won’t be able to steal enough money to save them, because there isn’t enough REAL wealth anywhere on earth, today or tomorrow, that even begins to approach the size of this goatf–k. If there were, they’d already have pyramided another Debt Tower of Babel on top of that, too.
Sorry.
That may have been the funniest thing I have ever read.
I hate adding nothing to a coversation, but I have been laughing for 10 mins now. Thank you for brining a great laugh into my otherwise mundane day.
“Such a risk is so worrisome, says Morici, a professor at the University of Maryland School of Business, ‘the Fed should not raise interest rates further. Sometimes the best monetary policy is to do no harm.’”
Does he consider spiking the punchbowl to keep consumption spending higher than income to be harmless?
He probably HELOC’d and his scaggy wife’s credit cards are limited out. We need a little (or big) recession to get the children off the street.
‘From Bloomberg. “The news isn’t all bad if you are looking to buy in this market. Between builders eager to discount and homeowners needing to sell, there may be as many as 4.7 million homes for sale now, according to Friedman, Billings, Ramsey Group.”’
Wow! That would be more than a 700K upward revision to the NAR figures Lereah showed his REIC constituents in a presentation last month. Does anyone have hard evidence to indicate which figure is closer to the truth (under 4 million versus 4.7 million)?
about 3.9 million EXISTING homes for sale (Hence, the David Liar-eah figures). Link here:
http://www.realtor.org/publicaffairsweb.nsf/Pages/EHSJuly07
Then you throw in the 568,000 NEW homes for sale from the Census Bureau (PDF link — by the way, that’s the highest ever in U.S. record history … the stats go back to 1963):
http://www.census.gov/const/fsalmon.pdf
That gets you to 4.5 million. Not sure where the rest of the units come from, but it could be that this guy is taking a shot at estimating FSBOs, which I don’t think would show up in MLS-derived NAR figures.
Excellent! So inventory of homes for sale is pushing up towards 5m. Did I just recently read here that there are 125m households or so in the entire USA? So we have about one home on the market for each 25 households — and this does not even consider how many investers and broken-ARMed borrowers will eventually throw in the towel and sell short. Is anyone (besides clueless politicians) still worrying about the housing shortage?
It is actually worse than I thought. The US Census estimated 113,146 households in the entire country in 2005, and the number is probably around 114K for 2006, assuming population has not grown at a substantially different rate than it has in recent years. So we likely have more than one home on the market for every 25 households, with lots more in bubble zones. Patience is highly advisable at this point for anyone who might be interested in buying over the next few years.
PDF link to Census data on number of households:
http://www.census.gov/population/socdemo/hh-fam/hh1.pdf
“Fears are growing that the Fed has dried up too much of the economy’s activity, all in the name of choking off inflation.”
Let me connect the dots for you:
U.S. Economy = Inflation
“‘the Fed should not raise interest rates further. Sometimes the best monetary policy is to do no harm.’”
You all should have thought of that five years ago when you started the War on Savers. Now there’s nothing left but to enjoy the hangover.
Comrade Chairman Greenspan, there is still the final round of the game left to play.
First comes free trade, then comes impoverishment, and finally comes war.
War - to kill of the impoverished.
Worked after the Great Depression with WWII.
Of course, most of those victims were in Europe and Asia. I wouldn’t count on the US coming out of this one unscathed.
I just had a thought while reading this. I have been predicting that the real trouble would not be till mid 2007, however this might accelerate a little if buyers start getting worried about future rate adjusments and start to bail before these resets begin in mass, kind of like people leaving a ballpark early to beat the rush,,,ESPECIALLY IF THE GAME ISTURNING OUT BADLY!!!
Thinkin’ about the impacts of a Sept. rate hike?
George Bush - has 2 agendas
1) hands off everything - including housing bubble
2) Protect the major contributors - give them what they want.
This mess will be swept under carpet till after 2008 election.
I respectfully disagree and not to get political, but..
Given the MSM’s hatred for GW, they are going to do everything and anything to throw fuel on this fire. I think they will take every advantage of this to thwart the GOP.
Just my view.
It won’t take much. And I note that the ground is being laid for a way for Hillary to give up on running w/o losing face and leaving the door open for a shot in 2012. The D’s smell blood on this one and she is unelectable.
It will be interesting to see who the Dems and Reps put forth to be their Herbert Hoover. I like McCain, and I can see conservatives wanting to blame a moderate of their party for the fall.
wow, I didn’t realize the MSM had a hatred for bushtard. I thought they were his bloodthirsty cheerleaders beating the drums for the invasion of Iraq who did not have WMD and did not do 9-ll. Wow. Interesting.
they’re like sharks; they’ll turn on anyone when they smell blood.
This is news to me also. Is it legal to question the GOP now?
Your funny…hatred for W…they have spent the last 6 years on their knees fellating him.
ABC is about to air a “docudrama” blaming everything on the Clenis TM (Clintons penis for all those of you out of the loop)
No matter who wants what, he does not have that much time. The fuse is burning and it is waterproof.
Rather than “mortgage moms” we will have mortgage Damsels In Distress. Single women were disportionately the buyers of condos at the peak and many with 100% financing.
(Given the MSM’s hatred for GW, they are going to do everything and anything to throw fuel on this fire. I think they will take every advantage of this to thwart the GOP.)
Bush and the GOP have been a disgrace in the way they have handled the economy, combining inequity and inefficiency. But if things unfold as expected, they will get the blame they deserve. And the blame they don’t deserve. And more blame heaped onto that.
so let me get this straight -
1) it is not the Fed’s job to worry about asset bubbles.
in order to protect an asset bubble, we should stop raising rates or cut
2) the Fed should focus on inflation.
3) if deflation is a scare, cut rates like crazy, bubbles be damned
4) there is no housing bubble
5) inflation is getting out of control, raise rates, follow prime directive
6) but rates might hurt the asset market, even though it’s not a bubble
7) inflation rises further, we should raise rates
9) see # 4
Hmmm - does it seem to anyone else that logic ceases after # 7
if a nonexistent bubble is not something to worry about while it is inflating, then if you will let yourself acknowledge that their is potential pain in its deflating, does that not imply that their is a risk to letting it inflate in the first place? I just dont see how you can have it both ways and then have any way to believe in the legitimacy of the Fed.
So, since I want to believe in the Fed, I have to believe they could still raise rates.
If they dont, I think they are absolute charlatans.
Under Greenspan, the Fed has turned into a sick joke, as far as I’m concerned. They cut rates too low, prompting an asset bubble in one sector, then they raise them until that bubble pops … only to freak out, cut rates too low again, and inflate yet another asset bubble elsewhere. Oh and don’t forget the bailouts for every single blow up in the past several years. Bond/derivative bets go bad and Orange County goes broke? Cut rates. Long-Term Capital Management goes under? Cut rates. Net stocks burst? Cut rates. If you’ve got a problem, just throw more liquidity at it. Problem solved. At least, that’s the Fed’s modus operandi. Sad, isn’t it?
Not sad for the pigmen!
*oink* *oink*
Well said both Mike and Geoff. And I think it’s at least worth considering also whether the Austrian economists are right, and we should even have a Fed at all. Why do we need central planning for loans? After all, central planning didn’t work so well for the Soviets for production, why should it work for us for lending?
oooh. now your talking about “the creature at jeckle island”. We don’t need the Fed. But they need us.
Alan Greenspan is one of the greatest mysteries of our time. Here’s a guy who in 1966 penned a thesis entitled “Gold and Economic Freedom” which was essentially rant against deficit spending and how in the absence of a gold standard, there is now way to protect savings from confiscation through inflation.
So essentially the guy starts out as a hard money, Austraian theory fella. Then he takes over the reins at the Fed and in time becomes the world’s greatest inflationist.
Mind boggling….
Evidently he decided some stealth inflation would be better than the deflationary depression taking place during the 1990s in the world’s No. 2 economy. Hard to argue with him, actually…
Yes, but his policy is what set the stage for that possibility to occur in the first place!
“So essentially the guy starts out as a hard money, Austraian theory fella.”
actually, he started out as a juilliard trained clarinetist/saxaphonist who occasionally sat in with ny philharmonic and even a few sessions with several big swing bands. not kidding. and then he was in the inner circle of ayn rand’s objectivists.
go figure!
Look, it’s simple, did you really think that a 1/2 million dollar home only costs $900 per month? I know many people lack common sense, but really now..just how stupid does one have to be to not grasp that a $40K or $50K income, just doesn’t pay for a 1/2 million dollar “crib”? Well, now it’s your crib and you can @#$%^ cry in it.
These people were wanting to be pretty stupid. I think even a half-brained dimwitted idiot could figure that out. But they weren’t ‘wanting’ to believe it, and having some lying A$$ mortgage bitch telling them that it was right.
whats amazing is that people here in CA are doing almost the equivalent of buying a $800,000 QQQ etf fund on margin in 1999, somehow convinced that they are not gambling, when the only thing they know about real estate valuation is that prices always go up. This was destined to end badly. I dont care if you can live in this investment - for two reasons. One, it might be a short stay, and two, even if it isnt, why piss away both your kids college education funds in order to live the same lifestyle for 20 years only to be able to claim you are a “homeowner” . If you took out 100% on IO, how exactly are you an owner?
Dumbest country ever.
“how exactly are you an owner?”
I’ve asked this to my friends who have recently purchased real estate, and as you might expect this question doesn’t exactly go over well.
But it’s true. You either rent your living space directly, or you rent money from a bank to “buy” the living space. Either way, unless you have substantial equity or own without a mortgage, you are in truth a renter.
In the first case, when you rent “directly,” your costs and risks are almost entirely fixed. In exchange for fixed risk, you have an opportunity cost of any appreciation in the home. The biggest risk in renting is inflation in the cost of living at your dwelling. In the second case, when you rent from the bank (i.e., buy with 100% mortgage), you take on the downside risks of ownership in order to gain the possibility of price appreciation (which, in normal periods, is mostly due to inflation).
So when you have no downpayment or no equity, the “buy” versus “rent” calculus is essentially one of managing risk, and deciding from whom it is better to rent from — the landlord, or the bank.
But either way, it is still renting. And why that doesn’t even begin to compute with people — even people of very high education and intelligence — is just baffling to me.
GREED and CONSUMPTION doesn’t discriminate even the highest of degrees in education.
Our working class forefathers and mothers (who lived through the Depression) understood this better — hence the popularity of “mortgage burnining” parties.
What is interesting to me is given the taxes that are being socked to new homeowners, even burning your mortgage is no guarantee against “renting” (from Uncle Sam this time)- Florida is a prime example of this, because in many areas they base taxes on sale price.
Our working class forefathers and mothers (who lived through the Depression) understood this better — hence the popularity of “mortgage burnining” parties.
What is interesting to me is given the taxes that are being socked to new homeowners, even burning your mortgage is no guarantee against “renting” (from Uncle Sam this time)- Florida is a prime example of this, because in many areas they base taxes on sale price.
if you are in a title-theory state, the mortgage is conditional title that you are deeding over to the bank. People seem to have forgotten that.
Woke up this morning and had a number of emails from my buyer’s agent on stuff for sale (I’ve had a buyers agent since 1998 and I get emails on real estate in my area (NH)). A ton of crap way overpriced came in. I don’t know if these were relistings or if they are new on the market but this is exactly the wrong time of the year to bring stuff to market that seems to be higher than comps. Maybe just sellers testing the market or something. All of this stuff is in the $200K to $300K range but these are small units built in the 1970s (some in the 1990s). Only one had the hardwood, Granite, etc. After seeing so much about the bubble in the media, it’s a bit of a surprise to see this stuff. Should just sit on the market.