A Reality Check For Unsold Realty
The Telegram reports from Massachusetts. “Foreclosures more than doubled in Massachusetts in 2007, according to The Warren Group. There were 7,653 foreclosure deeds in 2007, up 148 percent from the 3,086 in 2006, and up 600 percent from 1,092 in 2005. For those who purchased homes at the peak of the housing bubble, they may owe more than what the home is currently worth. And some of those who refinanced to cash out some equity added to their mortgage debt.”
“Heather and Richard DiStefano have not been able to convince their lender to accept a short sale offer of $240,000. They fell behind in mortgage payments for a home they purchased for $306,500 in 2006 in Worcester. After putting $30,000 down, their adjustable-rate, interest-only mortgage went from 6.75 percent to 9.75 percent over two years.”
“Their monthly payments rose from $1,300 a month to over $3,000, not including tax escrow, Ms. DiStefano said. ‘I haven’t paid (a mortgage payment) since August,’ she said. ‘There’s also outstanding taxes and water bills. I can’t pay $3,000 a month. We are so far behind the eight ball. It’s horrible.’”
“The couple filed for Chapter 7 bankruptcy liquidation and their other debts were forgiven. Earlier attempts to refinance were unsuccessful because the couple had paid only interest on the loan and not any principal, and thus had not built any equity in the property, she said.”
“The adjustable rate mortgage was not well suited to her family’s finances, which are now depleted, including the couple’s retirement and savings accounts, she said. Calls to mortgage hot lines and others promising help have been to no avail, she said.”
“‘I would rather him tell me I couldn’t afford the house,’ she said of her former mortgage broker. ‘I gave the house key to my Realtor. I packed up my life and left. It seems like there’s no one out there that can help us.’”
“The DiStefanos and their 9-year-old son now rent an apartment in the city, she said.”
The Milford Daily News from Massachusetts. “When Ramon Gallo bought a $300,000 home in Westborough in late 2006, he thought he had achieved his dream. Sixteen months later, Gallo, who signed for an adjustable-rate mortgage, has fallen behind on his payments and fears he may soon live a foreclosure nightmare.”
“Gallo who came from Mexico five years ago, is part of a wave of immigrant homeowners who have been hit hard by the national foreclosure epidemic. Many immigrants bought homes during the boom market five years ago, taking advantage of adjustable-rate mortgages, which made it easy at first glance to buy properties.”
“Of 10 houses sold to immigrants in Massachusetts, three were purchased by Brazilians, according to a report published last year by the Boston Redevelopment Authority.”
“Gallo said he was surprised when the bank told him he was going to pay much more than he expected. ‘Nobody told me I had to pay for insurance, property taxes,’ said Gallo, who saw his bill go from $2,100 to $2,900. ‘I feel trapped. I know the bank can take my house.’”
“‘They bought houses at high prices,’ said real estate agent Argentina Arias, whose clients include Latinos and Brazilians. ‘Many were not explained what it involved, some who were told maybe didn’t understand, and others didn’t ask. People wanted to live the American dream.’”
“In many cases, mortgage specialist Ana Delgado said, immigrants were easy prey for brokers, some of whom were immigrants as well. ‘Unfortunately, immigrants don’t help each other,’ said Delgado, who hails from West Africa. ‘Some immigrants take advantage of each other.’”
“In Waltham, mortgage broker Carlos Linera, whose clientele is mostly Hispanic, agrees. ‘From what I’ve seen, many have been taken for a ride,’ said Linera.”
“Not only were consumers blinded by the enthusiasm driven by banks, brokers and mortgage lenders in the midst of the housing boom, they also rushed to buy houses hoping to make money, said Brazilian-American real estate agent John Dias.”
“Frustrated by their losses, some have stripped their foreclosed homes of anything they could take, said several real estate agents.”
“As for Gallo, he plans to hold onto his property, where he lives with his wife and their two children. To make more money to help pay the bills, Gallo found a job managing a Mexican restaurant in Bedford, N.H. He spent $40,000 remodeling the house, but with the real estate bust, he knows he won’t be able to sell his home for the price he paid. Still, that loss is better than foreclosure, he said.”
“‘I cannot cry, I cannot back down,’ he said. ‘With God’s help, I’ll carry on and keep my house.’”
The Berkshire Eagle from Massachusetts. “No question, the market favors buyers now, according to Bob Romeo, whose Century 21 Franklin Street firm has 55 agents staffing offices in Pittsfield, Lenox, Great Barrington and Otis as well as Easthampton in the Pioneer Valley.”
“In a recent interview, he pointed out that, from 2002 to 2005, a wave of buyers outnumbered sellers, and ‘that created a frenzy.’”
“Romeo recommends a reality check for unsold realty — ‘many sellers have set a pace that may not be realistic. We have no shortage of overpriced properties.’”
“Although the number of transactions is ’substantially less than in 2005, it’s a decent number,’ said Romeo, acknowledging that ‘the only part that is a little disturbing is that median and average prices are higher than a few years ago. That tends to give sellers the idea that if a property was worth $300,000 in 2005, then it’s worth $375,000 now, when it may actually may be $275,000.’”
“There are about 40 properties in various stages of foreclosure countywide this month, compared with about 25 last February, according to online databases.”
“Romeo, whose firm has a department handling foreclosed properties, finds it disturbing that some of those homes are overvalued, compared with city and town assessments, and he bemoans the widespread practice of ‘remortgaging our houses to pay down credit-card debt or to take a cruise. It becomes a big problem when you reach retirement age and you still have a mortgage without the income to support it.’”
“‘Taking out home-equity loans is the most damaging bullet for homeowners today,’ he said.”
“‘A person who has a son or daughter living in Lenox cannot expect them to live here once they’re out of school because we don’t have the careers or salaries that would support a $300,000 or $400,000 home,’ according to Romeo. ‘Our biggest problem for a local is that we do not have the industrial base to generate salaries necessary to support these kinds of properties.’”
The Salem News from Massachusetts. “Even in the midst of a historic collapse in prices, there is a vast difference in what your dollar will buy, taking you from big to bigger to biggest. ‘Homes (in Marblehead) that would have sold in the mid- to high fours ($400,000), now they’re selling in the low fours,’ said Byrce Suydam, who represents Re/Max in Marblehead.”
“‘A year and a half ago, you couldn’t get into Marblehead for that,’ Suydam says. Now you might just squeak by, landing ‘a two- to three-bedroom house in need of work.’”
“Size and amenities, the kind seen at Strongwater Crossing, are often sacrificed for investment value, schools and other intangibles. And that’s notwithstanding what agent Annelie Sirois in Danvers has discovered. ‘The first question people ask me in this market: How big a steal can I get?’”
“It’s the wrong attitude, she said. ‘Because it’s not about stealing. It’s about paying for a house what it’s worth.’”
The Herald Mail from Maryland. “No one knows why the house that’s the grand prize in a raffle to benefit a Washington County charity didn’t sell in all the time it was on the market, begging for an offer.”
“But for the moment, San Mar Children’s Home is on the hook to pay at least $40,100 more than anyone else would. ‘How that was set? Why it was marketed at $349 (thousand)? Why did it come in at $390 (thousand)? I don’t question any malfeasance there. I just don’t understand,’ Bruce Anderson said.”
“‘It’s a lot of extra tickets we’ve got to sell’ to pay the higher price, he said.”
“With four bedrooms, three baths and a great room with a stone fireplace, the house and its 3.2-acre property became the raffle’s grand prize after it had been on the market for 16 months.”
“Blaming the nation’s ongoing housing crisis, the owners and their Realtor teamed up with San Mar, which cares for 41 girls near Boonsboro, after reading about a similar raffle out West. The charity is to reap any money raised after it pays for the house and other prizes.”
“Built in 1929, the house was sold as a fixer-upper in 2005 for $185,000 to a company that remodeled it and sold it to Karen Crawford and her husband, Dennis Kelly, for $375,000 in April 2006.”
“Wanting to retire, the couple realized too late that the two-story house wasn’t for them. So the very next month, they put it back on the market for $384,900, according to Metropolitan Regional Information Systems Inc.”
“By then, the market had begun to sour, and there began nearly a year and a half of price drops as no one made any offers to buy the property.”
“Finally, with still no offers coming in, the price was cut again to $349,900, with ‘OFFERS WELCOME!!’ That’s where it was on Sept. 2, 2007, when real estate agent Charles Angle’s contract expired. Five days later, MRIS records show, Realtor Cynthia Moler of Coldwell Banker, listed the property at $425,000.”
“And just five days after that — on Sept. 12, 2007 — appraiser James M. Wise in Hagerstown, issued an appraisal report, valuing the property at $390,000.”
“Angle, a Realtor for nearly 30 years, said ‘absolutely’ he was surprised when he saw that Moler had listed the house at $425,000. ‘We’d been marketing the property all the time with exposure and with showings. Nobody wanted to write on it at $349,900 — and then, hello?’ he said about seeing Moler’s price.”
The Washington Post. “In one brief phone call, Nancy Corazzi’s lender yanked away what was left of the $95,000 home equity line of credit that she and her husband took out five months ago.”
“The lender informed her that her Howard County home had plummeted in value and the company did not want the risk that she would owe more than the house was worth.”
“‘I got off the phone and I was shaking,’ said Corazzi, who was using the money to pay preschool tuition for her twins. ‘I was near tears. We needed this credit line to get us through some tough times.’”
“As it soared, the region’s housing market lifted the fortunes not just of home builders and real estate agents but also of those in less-obvious niches: termite inspectors, land surveyors and septic tank repairmen among them.”
“Life was good for Terry Croson, who as a title abstractor scours courthouses for detailed land records that are needed to close a sale. But Croson, who is single and raising her 6-year-old nephew, now finds herself living paycheck to paycheck, struggling to hold onto her home in Charles County. She said she made $30,000 abstracting last year, down from $47,000 in 2005.”
“‘I’ve never seen it this bad,’ said Croson, who has been in the business for 30 years.”
“‘We’re talking about hundreds of thousands of employees,’ said Anirban Basu, CEO of a prominent economic research company. ‘There’s tremendous pain and uncertainty out there,’ he said, estimating that at least 10 percent of the region’s economic activity is linked to residential real estate.”
“Compared with January of last year, housing sales were down 47 percent last month in Northern Virginia, 41 percent in Maryland and 38 percent in the District, according to Realtor groups.”
“In 2000, Croson bought a $155,000 home in a wooded enclave 30 miles southeast of the District. As interest rates fell, and the value of the house rose, she refinanced twice, exchanging some of the equity for cash.”
“She spent $4,000 fixing the backyard pool. She took her nephew, Toby, of whom she has legal custody, on week-long trips to the beach. She dropped $250 for his fourth birthday party, which featured a private reptile exhibitor regaling Toby and his friends with a small crocodile and an 18-foot boa constrictor.”
“By 2005, Croson had found other ways to cash in on the boom, and she was working on the side as a real estate agent. She said she made about $13,000 in commissions, bringing her total income that year to $60,000.”
“The next year, Croson and fellow abstractors took note of how quickly activity slowed. Some started losing their jobs. Croson held on, but she began to work fewer hours, and her work as a real estate agent dried up.”
“No more dinners for Toby at Chuck E. Cheese’s. She dropped her health insurance and her life insurance. She recently spent $400 after a heater in her home broke and another $100 at Wal-Mart for a vacuum cleaner after her old one broke, draining her savings to near zero.”
“At home, Croson finds herself deflecting questions from Toby about their reduced spending. A new video game at Target? ‘You just had Christmas, for goodness sake,’ she told him.”
“Croson said that if she can’t refinance to reduce her monthly mortgage payments, she will have to sell her house. Doing so might mean pulling Toby out of a prized public school, away from his friends, and would go against her overarching priority: making Toby feel secure.”
“Not everyone is hurting. The Real Estate Disposition Corp. is scheduled next month for the first of four days of area auctions of more than 575 foreclosed homes in the District, Maryland and Virginia.”
“‘Somebody’s got to be able to sell something somewhere, and right now that’s us,’ said Michael Schack, a senior VP of the company.”
“On a recent day, outside a land records room in a courthouse in Calvert County, Croson exchanged pleasantries with Kathy Smith, head clerk of the Circuit Court. Smith said she was trying to hire a new clerk.”
“‘Do you know something we don’t know?’ Croson joked. ‘Is 2009 going to be a good year?’ Not exactly. ‘I have one foreclosure clerk,’ Smith said, ‘and she’s bombarded.’”
anyone trying to rent / sell a commercial property
wow , it’s scking wind and getting no press
I bought more SRS.
Continuing the theme in Massachusetts is an article in the Lowell Sun this morning:
A spreading cancer
Foreclosures strain Lowell neighborhoods already hurting
Mortgage lenders foreclosed on 283 Lowell homes in 2007, up from 92 in 2006 and 19 in 2005, according to local property records. Lowell had the sixth most foreclosures in Massachusetts last year, according to The Warren Group, a Boston-based real estate research firm, trailing Boston, Springfield, Worcester, Brockton and Lynn. And with the nationwide subprime-mortgage crisis growing, the problem isn’t going away anytime soon.
Worcester’s city manager is asking housing court judges to place foreclosed homes in receivership and assign property managers to them, at the expense of the homes’ mortgage-lender owners.
The mayor of Providence is proposing to levy a fine equal to 10 percent of a property’s value if it is allowed to remain abandoned for more than a year.
Lynch’s administration now is mulling its own approach to the issue.
Assistant to the City Manager Andy Sheehan is chairing a group that is considering whether the approaches of communities such as Worcester and Providence could work in Lowell.
——–
It looks like cities want to hit the bankers up for maintenance costs for foreclosed properties. I guess the bankers are the deepest pockets around still.
It’s not a matter of who has the deepest pockets, it’s who has the longest reach. Tax liens trump all other claims on property. They will get their money if the property has any value at all. From the next owner, if the mortgage holder doesn’t pony up.
They need to be careful on how big the tax lien gets. Detroit did that before and forced the banks to move the home titles into holding companies that then when bankrupt. There is a reason Detroit is known as a huge slum… This is a case where the cure can be worse than the disease, depending on dosage.
Got Popcorn?
Neil
So we are going to see more negative value properties as government tries to help the blight problem.
Yes, Detroit is just full of them.
I think Ms. Corazzi spent more on that fancy kitchen in the background than on her twins preschool! She is *so* full of it.
According to the real estate records, they only paid 198k for their house in 1998, BTW.
Actually, they only paid 178,800 and then it looks like maybe a refinance in 2003.
She’s even got the pans hanging. She has really arrived. How much would you bet that this _________ (fill in the blank) never cooks in that kitchen of stainless steel and granite? I bet she is barely intelligent enough to know how to order takeout.
The hard times she is facing are all at her own doing but we have yet another “victim”. Look at how dramatic it is that she is holding the letter that tells her she can no longer be a money-grubbing, irresponsible ___________ (fill in the blank). Screw her and everybody that looks like her.
NYCityBoy
“(fill in the blank) ”
exactly !
Didja see her job title? Loan processor for a mortgage bank. If anybody could’ve/should’ve seen the oncoming trainwreck in RE, it had to be her. She is full of it and there is something missing from this story.
Wait a minute. The people in the lending industry were the most blind. They ALL thought it would last forever. They believed there was an endless, and I mean endless, appetite to buy all of those bologna loans they were creating. This moron probably felt like her day had finally arrived and the sun would never set.
You’re exactly right, NYCB. That they should have seen it coming but would not or could not only highlights their collective idiocy. They were in the best position to know that the house of cards had to collapse, yet they partied on like there was no tomorrow.
Unbelievable to see how many were living on the old equity line…Call me conservative but I never looked at the old equity line as my personal piggybank…unless it was a life and death situation…I know see so many that went that route underwater by HUNDREDS of THOUSANDS of dollars…
Was having this discussion with someone yesterday how when we built our home that we live in now we were told when we went to the “design center” to pick out everything from flooring to cabinets that it would be a all day event..well 25 min later we were out the door and done…1)I was not about to pay property taxes on items that had a shelf life 2)I already knew that the markup was going to be huge and that the quality(like the carpeting) would not be up to my standards 3)I believe in sweat equity…why am I going to pay $600 for a light fixture from some “foo-foo” store that I know goes for $50 bucks at Home Depot/Lowes…we told the builder put in the 5 dollar jelly jars and we did the rest ourselves..funny when the neighbors come over the first thing they say is,”Hey I never saw those fixtures in the lighting store!”…please…same with the basic kitchen..cut out some cabinet doors added glass and some molding around the island and guess what…looks like a custom job!
I agree. My experience in talking to friends and relatives who work in the RE industry is that they drank the kool-aid more than anyone. Even those who had been through previous downturns bought into the “it’s different this time” theme.
Kind of reminds one of the attitude tech geeks had about technology in the late 1990s, doesn’t it?
I have been in the mortgage industry for 5 years now. Currently I work in loan servicing as most of the production jobs have dried up in Orange County, CA.
Prior to this I was in a funding department/loan packaging sales to investors.
I worked for a subprime company for two years and started to notice in the fall of 2005 that the quality of the loans was going downhill fast and my company would do whatever it took to fund a loan. Most often the account executive at the bank that the loan was going to would coach us on how to wiggle the loan through.
I looked at properties myself, but continued to live with family rent free. They have no issues about it and I help out around the house. Anyways, I cancelled an early escrow on a condo conversion because it didn’t feel right and I noticed that the other buyers were stretching it way beyond their means to get in a crappy 1 or 2 bedrooom condo.
I have 800 credit and my payment would have been $2200 a month before taxes, hoa and insurance. Final figure was just over $3000 a month and that’s with me putting %10 down. Plus they forced me to use their lender because it’s a conversion and nobody wants to lend on a non Fannie approved property. I did a ton of research on this and got my $1000 deposit back and walked away.
My boss continually told me to buy and that values only go up.
A lot of loan officers especially stretched themselves buying several properties, but I think a lot of the back end people like funders and processors and shipping people get more of a steady check and don’t live quite so flashy.
Makes you wonder though. I saved most of my money by living within my means and waiting for the foreclosures to hit. I don’t think young people know how to save anymore or how to use credit wisely.
At this point I don’t want to buy anymore because there is way too much risk in the market.
I buy most everything else on sale or negotiate to get a really good price. It will be no different when I do get my own place. But it’s a lot farther off than I thought it would be, but I’m ok with it.
If I was married then I know for sure that I’d be pressured into buying, but I’m not so, I’ll just wait out this cycle and look to getting more saved and buying in a couple of years.
Bottom line, I don’t think a lot of people are patient with decision making and they don’t research big decisions enough.
As a rural denizen, I am seeing more and more people living communally these days…as in the late 1960’s. It’s certainly easier on the bank account, and provides a support group in troubled times. Duplicate living facilities for single households, (kitchens, for example or empty bedrooms,) make no sense if you don’t have the wherewithal to afford them. Privacy, especially in an urban setting is a VERY expensive commodity.
Personally, I see multi-generational and non-related households as a good thing from both an ecologic and a spiritual point of view. So, good for you, Stevo! If/when you DO strike out on your own, you’ll do so from a position of power and with a rational perspective.
RE: I worked for a subprime company for two years and started to notice in the fall of 2005 that the quality of the loans was going downhill fast and my company would do whatever it took to fund a loan.
Hope your name wasn’t on any of the files where the appraiser was coerced to fudge his value number and the contents of his report. Eventually the FBI and other assorted people with police power will come looking for low level scapegoats.
The low-life appraisers retained because of their willingness to continually hit the right number in order to keep receiving work, will be only to willing to name names and provide testimony in order to reduce their own prison terms.
“She spent $4,000 fixing the backyard pool. She took her nephew, Toby, of whom she has legal custody, on week-long trips to the beach. She dropped $250 for his fourth birthday party, which featured a private reptile exhibitor regaling Toby and his friends with a small crocodile and an 18-foot boa constrictor.”
SOLUTION..
Have another birthday party.
The alligator can EAT you.
The boa constrictor can EAT little Toby.
The other kids will be very ENTERTAINED.
All of your little problems are SOLVED
I almost spit a mouthfull of beer on my laptop when I read that one. I know a decent person wouldn’t find such a sick thing funny, but I sure did.
“Croson said that if she can’t refinance to reduce her monthly mortgage payments, she will have to sell her house. Doing so might mean pulling Toby out of a prized public school, away from his friends, and would go against her overarching priority: making Toby feel secure.”
Yeah, alligators and boa constrictors really, really make ya feel safe!
Kids are more resilient than adults, IMO.
Ding Ding Ding. She’s a winner, saved $500 and spent it on a heater and new vacuum.
Ugh,
Leigh
RE: Didja see her job title? Loan processor for a mortgage bank.
I called this months ago. As NYCBoy notes-these _____ thought the six figure real estate related paychecks for moron’s work was gonna last forever. So they ditched their hubbies in divorce court bought a mid-six figure condo, and jabbered to the press about how empowered they were.
Now that the proverbial SHTF, it’s all oh woe is me. I’m a victim. Forget about my decision making process. This isn’t my fault…my ex-husband made me do it.
Suzanne researched this!
Watch for scores of these displaced women worker storylines to be trumpeted by the likes of Oprah and all the other MSM lefties.
“…The Salem News from Massachusetts. “Even in the midst of a historic collapse in prices, there is a vast difference in what your dollar will buy, taking you from big to bigger to biggest. ‘Homes (in Marblehead) that would have sold in the mid- to high fours ($400,000), now they’re selling in the low fours,’ said Byrce Suydam, who represents Re/Max in Marblehead.”
“‘A year and a half ago, you couldn’t get into Marblehead for that,’ Suydam says. Now you might just squeak by, landing ‘a two- to three-bedroom house in need of work.’”…
..believe me, that house in the low $400k’s in Marblehead is still not going to be any sort of a value. It’s amazing how the home prices are holding up, considering how dour the news articles are. I thought for sure that things would be cheaper by now. I know that prices are sticky on the way down, but c’mon already. People just won’t capitulate.
They’re still employed, that’s why. They’ll use every angle to avoid the appearance that they’re just simply not good enough, rich enough, smart enough to live in their homes.
And often to look good in front of neighbors they haven’t even met!
Pen! i guess Ben read your repeated requests for MA info…
I don’t think a year-and-a-half decline from “high 4’s” to “low 4’s” is so bad. It’s taken a year and a half for Morro Bay (CA) per-sqft prices to decline by 15%. If it takes another year and a half to decline another 15%, that’s OK too. Although based on the Calif statewide excess of new foreclosures over actual sales, I’m thinking the price decline could accelerate soon.
There’s plenty of bad press info, but it just doesn’t seem to jive with the stickiness in prices. Regarding the transition from high to low 4’s in 1.5 years…. that $400k just isn’t buying much house, value wise. I can only hope that the price decline accelerates..
There’s a lot of gloominess in MA right now with business confidence in the toilet. I do see pretty decent demand for engineers right now as college students avoided hard science majors after the tech bust. So companies are pushed a bit harder to outsource. I don’t see a big catalyst for Mass in the near future. I’m sure the education businesss is doing well but do you see anything to bring in companies near-term?
I know that the Governor wants to bring in Casino gambling but there’s a huge amount of resistance to that.
I do see pretty decent demand for engineers right now as college students avoided hard science majors after the tech bust.
Checkmark! The new growth field is going to be nuclear engineering. By happenstance I made friends with one of the best stress/structural engineers out there who has worked aerospace and nuclear engineering over the years (based on the economic cycles). He’ll retire soon (sort of…) and then be paid a princely sum to mentor the new kids on how to properly design a nuclear powerplant; he asked for my name ‘just in case,’ and boy was it tough to play cool.
I think my job is secure, but I’m not so dumb as to reject an obvious smart backup! Not to mention we’ll have to ramp up infrastructure programs (rail, roads, nuclear power, and some other stuff that might or might not work as part of the ‘green infrastructure.’)
I hope for a return of street cars.
To me they really make long term sense (cheap, effective, lower maintenance than a bus but you must put in a large fleet to pay for the rail).
Got Popcorn?
Neil
Speaking of Nuclear, nucular-hehe, did anyone notice the Earthquake in Nevada a 6.3 that was the area in which our GOV had decided was safe to store all used plutonium rods underground??????????????
Anyone wondering now, how corrupt our GOV is..must have paid off someone big time and OOPS a big earthquake sure could ruin your lunch one day. BIG time.
Google Atomic bomb detonations and see just how many in that area of Nevada,Utah, Colorado etc are contaminated. I believe, when you google the sites, you will count over 2000 +++ . Guess “they” didn’t “KNOW” if the first one worked or not.
Whatever Westinghouse is called now is planning a pretty big expansion just North of Pittsburgh, PA. It is all due to a resurgent Nuclear Power Industry, especially the new plants being built in China.
Supposedly a lot of very good paying jobs are to be created by this expansion. And housing in that area is still very reasonable compared to most of the rest of the US.
http://www.larouchepub.com/other/2006/3306safrica_pbmr.html
Westinghouse has licensed the truly revolutionary new Pebble Bed Modular Reactor (PBMR) designed in Germany and South Africa. Inherently safer and produces far less nuclear waste. These are the future of nuclear energy.
Pen, I couldn’t disagree more. They will capitulate like never seen before. Prices will come down, way down. This is only the tip of the iceberg. By the time this debacle is done prices will be back to the 1998-1999 levels, right were they should be. Hold on for its going to be a long, long way down.
We’re sitting on the sidelines waiting, all cashed up, just waiting. We sold our house after 25 years of ownership in January 2006 for it was very obvious to us that this real estate market had gotten way, way ahead of itself. The writing was clearly on the wall but most had their heads far to buried to see reality.
Take a look at the graph on the Telegram page if you don’t think they will capitulate.
Were you referring to the foreclosure graph?
If so, I just am not seeing those king of numbers in the areas where I want to live. It seems like the foreclosures are mostly isolated to the western part of the state and the “crappy” areas elsewhere. Where I want to live, it almost seems as though it is “different”. I am not saying that it is, but I’m just not seeing attractive properties getting there, at least not yet.
Patience, Pen. It took almost 10 years to get where we are. It will not resolve itself in 10 months.
Ben,
capitulate?
We’re just transitioning from fear to desperation! Its many calendar months until capitulation. I predict spring of 2009 as the start of that emotion; capitulation will basically fill 2009.
As others are posting all over this thread, its going to take a long time. Sit back and relax. The earliest it will be wise to buy is 2010. The absolute earliest! I’m not going to argue with those who say “wait longer.” They’re probably right.
Got Popcorn?
Neil
Neil, your soooo right. This is unwinding is going to take some time. It’s all down hill from here.
The problem is that the buyers haven’t capitulated yet. People don’t understand that RE still has a long way to fall.
One more time: there is always somebody who has to sell, and that house will only sell for what the most willing buyer will pay.
There are two things that will make them drop fast. First, needing to sell en masse. Can someone say recession? Second, a high percentage of homeowners underwater. That’s just a timing issue that will turn a slow downward trend into a race to the problem as ppl no longer give a f* about their houses and stop paying their mortgages. We also have about 1.5 years of the worst of resets. The later the boom lasted for an area, the later drop, as foreclosures leg the boom.
Yes. Unemployment is still below 6%, and the debate if we are even in recession still rages. With those thoughts in mind it seems like high percentages of these FBs have absolutely no fall back position, no savings, no plan B. The economic slack action is building ever higher and when it snaps capitulation will likely be very swift indeed.
Well current stats are pretty cooked and generally recessions are called after the fact. So by the time we are officially in a recession it will be the beginning of the next great depression.
I think buying a house will rapidly become irrelevant as more people become worried about having a job.
This time around I don’t think we will ever pull out the bottom if there is one is probably rents given a 50% average drop in income using todays dollars.
Not enough people have money right now to buy homes even if prices drop 50%. Think about it if prices drop 50% in the bubble areas back to affordable levels this means we are in a deep recession/depression the effects of this imply and additional 50% price reduction or 75% off current prices.
And as I said a 50% drop in average income is possible given a 25% unemployment rate coupled with lower overall wages. Next your going to see strong migration out of the bubble areas to regions that have less price distortion.
My suggestion is wait till you can pay cash for a house then wait a little bit more. Then plan on living on half your current income or less.
RE: Next your going to see strong migration out of the bubble areas to regions that have less price distortion.
New England is toast.
The region produces virtually nothing of material substance anymore.
Everyday there is perpetual whining in the local rags about how all the towns are broke-despite all the residents living in $600/$million digs. It’s totally dysfunctional.
Infrastructure is crumbling due to years of till looting by
Mazzport and DOT employees & pensioners.
The current pillars of employments are social welfare work, health care, and education. You can throw in a little tourism here and which pays minimum wage with no health insurance.
Areas that can literally be self-sufficent like Texas, the Northwest, and the upper Rocky Mountain states will be the places to live.
finally ….a man
“‘I cannot cry, I cannot back down,’ he said. ‘With God’s help, I’ll carry on and keep my house.’”
everyone else is bitchin to have their neighbor (gubermint) bail them out
yeah, I noticed that too. The guy’s an idiot but an honorable idiot.
Yes, but I hope he isn’t just banking on God’s help. I believe in the saying, “Pray to God, but row towards the shore.”
Or as I heard once: “God feeds the birds of the air, but he doesn’t just throw the food into their nest.”
‘Nobody told me I had to pay for insurance, property taxes,’ said Gallo, who saw his bill go from $2,100 to $2,900. ‘I feel trapped. I know the bank can take my house.’”
Unreal.
Yeah, that comment is pretty unreal. I have heard “I didn’t know the taxes would be XXX, or the insurance went up 20% and now I can’t pay”. Never heard “I didn’t know I HAD to pay”..
WTF, you think the rest of us just “choose” to pay the taxes you idiot? Or did you think that there was nothing they could do to you if you didn’t pay, and therefore didn’t worry about it?
Don’t you get it? Only the American citizens pay the taxes. Immigrants always get a pass.
Er… I was reading something the other day. Turns out different countries have different tax schemes. In some countries you can be exempt from annual property tax, but you pay transfer tax when you buy (hefty) and cap. gains when you sell. This is true in some Latin American countries (explains why rich landowners still have a chokehold, btw). If he had to pay a load of closing costs he may have thought that was where he was paying the taxes.
Again, not every country takes after the English legal system!
That was the only question I had about the guy….is he even legal??
The reporter brushes past how this guy put $40,000 into remodeling the place, on a bartenders pay. Where sis he get the money? And weren’t these people doing that because the common wisdom (at the time) was that would translate into $60,000 more in resale price?
He’ll be throwing the keys at the lender soon enough.
BTW, MSM, here’s a freebie for you; nobody except the HBB has pointed out that in many areas, the VAST majority of foreclosures are from refis.
“WTF, you think the rest of us just “choose” to pay the taxes you idiot?”
He just arrived 5 years ago, over the non-existent border fence.
Since he’s never paid any attention to American laws or paid taxes before, you could see that this would be a shock.
“the VAST majority of foreclosures are from refis.”
And, worth pointing out, if you refi, even in non-recourse states like Cali, you just changed the terms of your mortgage to recourse. Accepting government help, like the Hope for Dopes program, also entails accepting the change in the loan from non-recourse to recourse, something your frazzled and non-too-bright FBs might not notice being slipped past them.
No comprende!
Comprende mucha nada.
Don’t people realize that even after you finish paying off your mortgage you have to deal with the annual ever-increasing property taxes? To me, that is like having a lifetime monthly car payment. Can you afford to pay the taxes if you were to be stuck with the home that you are living in?
When buying a home, people need to consider whether they can pay the property tax amount in case that home becomes their retirement home by default bc they can’t offload it in the future. Who cares about meeting the monthly mortgage? The mortgage financing can be fixed rate, not the property tax.
I just don’t get how people cannot see this when weighing their options.
Disgusting.
That’s why they should not pay property taxes out of escrow. Owners need to see the bill in full. When buying my lender tried to sneak a $100 fee for not using escrow but my lawyer, who does tons of work with Cook County, made them drop it.
As for the future, it isn’t looking good for property taxes in the large cities - so much so that I now doubt I’ll ever move from my hole-in-the-wall unless it’s to rent.
At the risk of interjecting religion into this discussion, my mother knew an Anglican priest who had been a missionary in Japan. He wan interrned there for the four years during World War II. He said the only thing you can (legitimately) ask god for in a prayer is the stength to do who you need to do in any given dire situation. Somewhat along the lines of your pray “but row towards the shore” mantra…..:-)
“‘I got off the phone and I was shaking,’ said Corazzi, who was using the money to pay preschool tuition for her twins. ‘I was near tears. We needed this credit line to get us through some tough times.’”
That’s real sad for your poor little pre-school kiddies. Of course, a few bucks of that $95,000 would have gone a long way in a course of RE Scams and Personal Responsability at MIT for your idiot PARENTS
“‘I got off the phone and I was shaking,’ said Corazzi, who was using the money to pay preschool tuition for her twins. ‘I was near tears. We needed this credit line to get us through some tough times.’”
I’ve seen similar reactions from junkies. Debt is an addiction.
So that’s how the Jones were able to afford everything. I’m glad that I never felt societal’s pressure to tap my credit line.
No more dinners for Toby at Chuck E. Cheese’s. She dropped her health insurance and her life insurance. She recently spent $400 after a heater in her home broke and another $100 at Wal-Mart for a vacuum cleaner after her old one broke, draining her savings to near zero.”
“At home, Croson finds herself deflecting questions from Toby about their reduced spending. A new video game at Target? ‘You just had Christmas, for goodness sake,’ she told him.”
Why is it that when people get a couple of bucks all their conservatism goes out the window?
I don’t care how much is in the bank conservative, conservative and restraint…example one of my kids wanted to know if we could go out to dinnner last night.. I said no..she says why not? I said well here is the choice you have we can go to dinner with the family and next week when we go to visit your friends in NC you won’t having any hang out money to spend with them or we can BQ and then you could have the extra spending money…of course you know which one she took..could I have done both… of course..but THAT’S NOT THE POINT….I am not about to turn my kids into the “give me, give me I want it now and I will charge it” robots of today….
That’s why I love the community we moved into..most homeowners here are execs, professionals, business owners who could have bought more expensive homes…BUT DIDN’T..only one “Joneses” mentality among us…
What I can’t believe is that she was in the industry for 30 years and only had $500 in savings?
Quoi? Excusez-moi? Je ne comprende pas–non, je ne peux pas comprendre. C’est fou.
I made about $20K last year (this year it will be less due to first kid.) I have about $2.5K in savings, with about $300 going in a month. (I *do* take large chunks of it out from time to time to pay outstanding debt, but always leave over a grand.)
Sure, I can afford to chuck so much into savings because Evil Rob makes more than twice what I do. But still. Simplest savings plan ever— direct deposit (for one-day-a-week job, not the full-time job) goes to savings, so I never think of it as income. If my other job did direct deposit, I’d send it to savings too, and only move enough over to pay bills.
$500 is not savings. $500 is a change jar. Come to think of it, I’ve got at least half that kicking around in change jars. Ought to take care of that.
One of our married kids and the spouse both work (school teachers) and have no children. They bought a nice but modest place in 2000 they’re still in. Ever since both of them started working, ONE COMPLETE SALARY goes into savings and investments. Their one extravagance? Tivo!
The Joneses are jonesing!
Folks, Keep It Simple
At its peak, experts estimated housing topped $20 Trillion Dollars
Each time housing devalues 10%, that is $2 Trillion wiped out.
A 30% reduction in home values results in a $6 Trillion reduction of wealth. If just half that amount is leveraged, then there is $3 Trillion worth of mortgages underwater. $3 Trillion, not $300 Billion.
Where it gets really interesting is that much of the reduction occurred in bubble areas where the percentage of financing was much higher and the pull back is more severe.
So next time you read about a “bailout” in the billions………JUST LAUGH!!!!!!!!!!!Really HARD!!!!!!!!!!!!
Right-O! There’s a lot to be said for simplicity!
It’s also astounding that, when the country is at War (no matter what your personal opinion of the war is), Americans threw away more money on inflated real-estate, home-equity loans for granite countertops, than we spent on the war!
You’d think we’d all be putting our money into government bonds or something during a time like this.
We’re doomed!
That’s so FDR. Next thing you’ll be saying that people should have cut down on their gas consumption instead of buying SUV’s.
The US not only paid its way though WWII, it paid the way of many of its allies too. How the world has changed.
“She spent $4,000 fixing the backyard pool. She took her nephew, Toby, of whom she has legal custody, on week-long trips to the beach. She dropped $250 for his fourth birthday party, which featured a private reptile exhibitor regaling Toby and his friends with a small crocodile and an 18-foot boa constrictor.”
In other words, she spent like a drunken sailor, never set aside funds for a rainy day and now wants sympathy because she can’t live well above her means.
These aren’t the “hard times” yet. By the time that period rolls around idiots like this gal will finally understand that not being able to afford “preschool” for little johnny is the least of their concerns.
That whole big, birthday blowout stuff amazes me. My son has been invited to some of those - and he’s not even 4 yet! I am probably frowned upon by some parents for not inviting their kids to his birthday, but I have no interest in those silly parties. We have dinner and cake with the family and we also do a little something with his closest buds (like I took him and his 2 best friends to the Camden Aquarium last year). I may throw him something a little bigger (a bowling party, or something like that) when he’s older, but not every year.
But then again, I’m also the type of person who - if I had a nice, little $150K house and a salary to support it - wouldn’t refinance for extra cash. The refi rationalizations just amaze me.
We spend about $150 for each kids birthday, but the first $100 goes into their savings account, and the rest if for the cake (homemade, so about $4) and video game rental, and pizza, they have a few friends over, does this woman have anything in the way of savings for this kids future?
you should be dragged into court for child abuse…
homemade cake, pizza, video game…where are your family values?
Also, don’t you realize that $100 in savings isn’t going to to help economy?
sarcasm off…
Agreed - I can’t believe she didn’t pay to have Hannah Montana come and hang out at the party. Disgraceful.
I agree..when we lived in FL..we had annual passes to Disney(pretty cheap for Florida residents)…so instead of a birthday party..we had our kids pick 2 friends and they would come with us to spend the weekend there(my uncle has a condo there for the last 20 years that he uses about twice a year.)…it was the best…We would eat in the condo in the morning..treat the kids to lunch in the park and then come back to the condo for dinner…it became a huge event every year that kids and friends look forward to…and we got a weekend getaway for $200 bucks instead of a couple of hours of babysitting…
Think a little bit folks. Clearly the behavior of the borrowers was excessive, to say the least.
But what is even more amazing is the behavior of the lenders. They KNEW what they were getting into. They were promoting the hell out of the deals. They were making billions and billions selling toxic junk to our pension funds and municipalities. And now they want to be bailed out?
America has truly gone nuts, we reward the dealer and punish the junkie!!!!!!
Why were pension funds and munis buying this stuff? The ratings. Securitization products make sense and work, you just have to understand the risk. The rating agencies failed us, not the securitizations. Securitizations would have worked even at higher spreads if the investors insisted on them (which makes it a little more complex as to who the real junkies are). It was their demand that pushed spreads down. It will be interesting to see if anyone is indicted.
Bingo.
Because it is better to fail conventionally than succeed unconventionally.
If you are a pension fund manager and you are judged by comparison with your peers, what is the correct strategy?
Do exactly what they do, and if things go to sh*t, just point out that they didn’t do any better either so who are you going to hire instead of me? Collect your salary, collect your bonus, and keep on truckin’.
From the game theoretic perspective, given the rules, this is absolutely the “right” strategy.
Tim is right. Pension funds and municipalities had their own attorneys and financial advisors who were supposed to be looking out for their interests. They should not be relying on brokers, or anyone else for advice, except their agents. An investor listening to a broker is no different then a buyer listening to a realtor. A real no-no. Also a buyer not understanding the mortgage documents they are signing is no different than someone buying a security they don’t understand. These were big boys signing big boy letters that had access to the documents. To the extent the ratings were negligent or fraudlent and therefore their advisors were misled, it’s the rating agencies that should bear the responsibility for that. Don’t let the politicians so easily fool you and control your thoughts.
The level of risk in the CDO’s were, in terms of the Street “Cov Lite,” which the rating agencies modeled after years of low volitility in defaults. But, their algorithms failed “The Past Was Not Prolog”
It was people working in jobs making bonuses and stock option gains playing with the money of others. If your risk bet wins, you win, if it loses, you look for another job but you get to keep any winnings. It was in their own personal interest to pump up the bubble as high as it could go.
RE: America has truly gone nuts
Just found out a couple I know has three properties leveraged on triple digit credit card debt and a $200k mortgage note. The cards are re-setting and the refi spigot has been totally shut off.
They are slowly going mental.
Triple digit? You mean like $900?
Or do you mean $900K, which is six digit?
“‘I would rather him tell me I couldn’t afford the house,’ she said of her former mortgage broker. ‘I gave the house key to my Realtor. I packed up my life and left. It seems like there’s no one out there that can help us.’”
“The DiStefanos and their 9-year-old son now rent an apartment in the city, she said.”
Rather than making it sound gloomy for that family, they should have kept it real and added “where they are saving over $2000 a month in comparison to the mortgage and carrying costs on their home, and can move on with their lives. With all the extra money, their standard of living has increased dramatically and they are maxing out their retirement accounts again so they wont be a burden on society. They sleep much better at night, and many not even your assistance when they are too old to work.”
My mother moved from one house beautiful to the next (though rentals) and it never mattered to me. What mattered was having friends and family around, people in the house who made an effort to get along and have a good time. I.e. a home. The setting didn’t matter.
You know that Toby is already a spoiled little prick. You want to spank this kid and you haven’t even met him. Admit it. Come on. Admit it.
One of the best bumper stickers I’ve seen was one that said: PROUD PARENT OF THE KID THAT BEAT UP YOUR HONOR STUDENT.
“My Dad is Trustee Of The Month at Angola State Penitientiary”
Being raised by a single aunt, with no mention of his parents? My guess is he has had a tough time. Save the vitriol for his foolish legal guardian.
‘Save the vitriol for his foolish legal guardian.’
She might be dumb–evidence supports that theory–but at least she’s trying. Not many people are willing to take in a nephew and raise them as their own.
LMAO!!
We should judge, rate and grade these crreative, desperate BS stories from these GFand FB’s and award a prizes for the most of these RE criminals..Ooops!..Victims.
Some of their stories of “woe is me” and the ” the World is Using and Abusing ME” are truly sterling and definitely deserve a 1st, 2nd and 3rd place recognition up there after our Golden Child of RE, Casey
“$100 at Wal-Mart for a vacuum cleaner after her old one broke, draining her savings to near zero”
If buying a $100 vacuum cleaner from Wal Mart wipes out her savings, she needs to re-think her financial plan…
No worries, the decider’s got her back - the check is in the mail!
BAWWAHHHAAAAAA!
That’s *MR.* Decider to you.
(Sorry….I couldn’t resist.)
BayQT~
Check the local yardsales bet she could buy one for $5 or $10 bucks.
Or you could pick up hers for $5 or $10 at the forclosure yard sale.
“Heather and Richard DiStefano have not been able to convince their lender to accept a short sale offer on their house. They fell behind in mortgage payments for a home they purchased for $306,500 in 2006 on Marlboro Street in Worcester. After putting $30,000 down, their adjustable-rate, interest-only mortgage went from 6.75 percent to 9.75 percent over two years. Their monthly payments rose from $1,300 a month to over $3,000, not including tax escrow, Ms. DiStefano said.”
These numbers don’t look right. How does a roughly 50 percent increase in the interest rate result in monthly payments roughly 2.5 times higher? Did something else about the terms or principal also change?
Either the 2/28 I/O stopped after two years and they had to start paying some of the principal nut, or the house devalued enough that the equity percentage cap of the I/O was hit and they had to start paying some of the principal nut. Something like that anyway.
DON’T WORRY IF IT DOESN’T APPLY TO YOU
It’s only the subprime borrowers.
It’s only the Alt A borrowers.
It’s only the no money down reverse amortization borrowers.
It’s only those with Home Equity Loans.
Its only people with excessive Credit Card debt.
It’s only those people who borrowed too much on their vehicles.
It’s only the borrowers that put less than 80% down on their homes.
It’s only the borrowers that purchased homes in the last five years.
It’s only private equity deals.
It’s only those people that borrowed money and own commercial RE.
It’s only municipalities that need to borrow money.
It’s only banks that made loans to people, corporations, or municipalities.
It’s only insurance companies that invested in loans to people, corporations, or municipalities.
It’s only pension funds and retirement accounts that invested in loans.
So as long as you are not a person, business, or live in a municipality, and have no relationship with a bank, insurance company, or retirement plan, then you can relax and not be concerned about the increasing severity of the credit crisis.
Need that on a t-shirt with Ben’s website URL.
Hey, that’s me!
No debt.
Own my 3 pieces of real estate.
All my insurance is high deductible emergency coverage. Life insurance only covers estate taxes. Cars have max deductible, health care, too.
Investments and bank accounts total 5% of my gross assets.
Monthly budget based on average of 5 worst months of income in 60 months. My income goes up by 20% per annum.
I see no credit crunch. Recession means I’ll buy very cheap land and assets soon.
Yay.
BTW, my FICOs are 640 because of a business failure. Paid tax liens suck. I use a $20k sdcured Visa, don’t need unsecured debt.
You been holding out on us, Ben?
http://www.dallasnews.com/sharedcontent/dws/classifieds/advertising/homecenter/homes/stories/DN-suh0217_allmanjones.ART.State.Edition1.45d4620.html
“The adjustable rate mortgage was not well suited to her family’s finances, which are now depleted, including the couple’s retirement and savings accounts, she said. Calls to mortgage hot lines and others promising help have been to no avail, she said.”
Seems to me she did great! She got to live in a house she couldn’t afford for two years, and if you add up the forgiven debt she got to keep (tax free), and the fact that she hasn’t paid the mortgage since August, she actually is coming out ahead!
So why is it “boo hoo hoo! I lost my house?” I don’t get it.
“I’ve hearing horror stories since January of 2006,” said Linera. “It’s horrible across the board. At the end of the day, an immigrant is losing his home next to a white guy from Worcester who is also losing his home. But many immigrants didn’t have information about the process, faced language barriers and were sold a false dream.”
Since the white guy living next door is in the same foreclosure boat, this argument is “oh woe is me the downtrodden minority” bullhickey.
Or alternatively, what’s the pathetic white guy’s lame whiny I don’t deserve this excuse?
“‘A person who has a son or daughter living in Lenox cannot expect them to live here once they’re out of school because we don’t have the careers or salaries that would support a $300,000 or $400,000 home,’ according to Romeo. ‘Our biggest problem for a local is that we do not have the industrial base to generate salaries necessary to support these kinds of properties.’”
This is endemic across the country, not just in Lenox. So where exactly where are all those kids going after they graduate??
Florida. Arizona. Places where there are jobs and the rent is cheap. We miss Massachusetts, but we can’t compete against 15 years experience and we’re sick of paying 55% of our temping income on rent.
RE: So where exactly where are all those kids going after they graduate??
HOME to live in the basement.
Notice the total lack of the words “I” or “we”. It’s all evasive passive voice. “Mistakes were made.”
And yes, immigrants rip off greenhorns. Big time. Much better to deal with sleazy Americans. Your baloney detector will still be functioning, and some of these folks actually have some fear of the law, as with no foreign passport, they have nowhere to run and hide when it all comes crashing down. Plus you can pile in on the class action lawsuit when their American customers turn on them.
Recent immigrants know that greenhorns don’t know the legal system, and use that to their advantage.
“The DiStefanos and their 9-year-old son now rent an apartment in the city, she said.”
Hey, I haved lived in an apartment with my 11 year old son for the past 3 years because I refused to overpay for real estate. I have often thought my son could have a better home if not for these idiot specuvestors. And we just want a place to live!
At least I still have my cash!
RE: At least I still have my cash!
And you can sleep at night.
Not so my acquaintances with the triple digit CC debt and mortgage note.
“No more dinners for Toby at Chuck E. Cheese’s. She dropped her health insurance and her life insurance. She recently spent $400 after a heater in her home broke and another $100 at Wal-Mart for a vacuum cleaner after her old one broke, draining her savings to near zero.”
What an idiot. If things are really that bad for her, why not buy a $25 vacuum through craigslist or the penny saver. And, I dunno, maybe get a p-t job? Or better yet borrow a vacuum cleaner from a friend until the first paycheck of said p-t job comes in. And dropping health insurance??? A sure way to financial ruin…which means she also doesn’t have it for her kid.
Odds are that you are right and she doesn’t have health coverage for the kid either, but there are programs that will cover kids in many areas up to a certain income level. I don’t know the numbers for sure but it is probably 2-3 times the federal poverty level. In PA it is called CHIPS, but I am not sure what it is called in other areas. It is a federal program, but states have expanded it to cover a pretty good amount of the children in the more liberal states.
My son is using the Eureka that I bought twenty-five years ago. I don’t remember how much I paid for it. Some of the attachments have cracks in them but the motor is still strong and it cleans just fine. I’d guess that you could get one of these for next to nothing at a garage sale. And getting bags for these is no problem.
I just got a call from someone I sold a property to in 03. I sold it to him with a $48,000 NOI for $540,000 and because the rents have gone down 9% and his expences have gone up 20% it now nets $38,000. I don’t even know what to tell him what it is worth now!
RE: the rents have gone down 9% and his expences have gone up 20% it now nets $38,000.
Ahhhh….the joys of being a landlord!
I am lucky enough to have just been hired on by a city as a public servant, and I am going through my “benefits package” wondering if I should opt to fund it fully or take all the cash I can and invest it on my own? I’ve read and enjoyed this blog for a couple of years now and appreciate all the intelligent people voicing their opinions. Luckily I was like minded about the housing “troubles” and everyone here helped me not to cave in and get caught up in the hype to buy something that was obviously overpriced. Thanks.
Is there any matching contribution to the 401k? No sense in passing up free money.
Kind of interesting that some folks are still partyin’ like its 2005…figured I could put this hear since it is about the Boston area.
http://tinyurl.com/2r6cae
ON A BLUSTERY FEBRUARY MORNING in 2005, a tall orange excavator labors over a growing hole in Paula and Mark Ito’s Newton backyard. A few days later, a concrete foundation lines the hole, and a team of framers begins pounding together the skeleton of the home’s addition. By the time the project is finished, they’ll have a new family room, mudroom, laundry, master suite, and a radically expanded kitchen. Their 1931 Dutch Colonial will have increased in size by more than half, to 3,385 square feet. And if they stick to their budget, they will spend about $360,000 on the renovation – as much as Paula originally spent to buy the home in 1996, before they were married. They believe it’s a smart investment. Before they began the job, an appraiser told them their house was worth around $800,000.
By the time they finish, its value should top $1.1 million.
–Snip–
While their home no longer resembles a construction site, the 41-year-old Itos are reluctant to call their job done. They still need window treatments.
Their landscaping needs work to accommodate the new back door. They haven’t put in a walkway yet. “Even when you’re done, unless you complete everything, you’re not really done,” Paula says. So, sooner or later, the pickup trucks will return to their driveway – a sign that they’re part of a generation for whom renovations have become not a one-time event, but a way of life.
That Washington Post article was a beauty:
Watched the Suze Orman show last night for kicks (it was the “Mortgage Meltdown” special episode), and caller after caller was at or near 50 years old, and had only $3,000 to $8,000 in total savings. It was amazing. And they were calling in to ask if they should buy more stuff on credit!
The studio guest was a couple who went and bought a SECOND home in Vegas or Phoenix (can’t remember) and are now completely underwater and hosed. The loan on one property was interest only, the other property was financed with a NegAm loan. Completely screwed FBs. The advice given was not to sell both properties ASAP, take the money, and rent, but instead to find some tenants, etc. They’ll be a foreclosure story in one of Ben’s posts soon…