Sellers Aren’t Getting What They Want
Leesburg Today reports from Virginia. “Long lines. Price wars. The decision became easy. She and her fiance finally bought the one townhouse they won on price. Fueled by a lot of emotion, the couple wanted what many others continue to seek today, a place to call home after their wedding. It didn’t turn out to be the fairytale they imagined. Three years later, the couple found themselves just last month, keys in hand, back at the bank which was foreclosing on their more than $450,000 mortgage.”
“The payments no longer made sense as the home’s value had dropped to about $350,000, less than the value of the loan. There’s a similar story behind many home foreclosures in Loudoun County.”
“In July, Loudoun County had more foreclosures in one month than ever before. It saw twice as many foreclosures in July-279 total-more than any month last year, according to data collected from Loudoun County Circuit Court Clerk Gary Clemens’ staff.”
“‘Foreclosures mean less revenue for the county and the state,’ Clemens said. ‘It’s a huge impact on revenue. Couple the foreclosures with high gas prices and you have a double whammy. It’s an issue this board of supervisors will have to face. The biggest question is how many more foreclosures are in the pipeline. I don’t think anyone knows.’”
“Realtors take a slightly different view, pointing out that June served as the second consecutive month in which sales reached more than 500, a number not seen in Loudoun County since 2006.”
“‘[It's the] highest level of sales in five months, and primarily it’s due to buyers coming back into the marketplace because there are high levels of foreclosures on the market for good value,’ Sue Smith, (an) associate broker with territories in Loudoun, Fairfax and Arlington counties, said.”
“The surge could also be attributed to availability of loan programs for first-time buyers, which will end Oct. 1, Smith said. ‘That has brought a sense of urgency,’ Smith said. ‘There are a lot of buyers that have been on the fence waiting to buy but couldn’t afford it. Now they see it’s a good time. I agree now is a good time.’”
“She’s seen an increase of cash payments for properties and investors taking out lines of credit with the intention to buy foreclosure properties and rent them for long-term hold. ‘The longer you hold on to it, it goes up over time,’ she said. ‘We are still 13.1 percent below our prices from a year ago.’”
The Associated Press on Virginia. “Leroy Hernandez, who lives outside of Richmond, Va., said he has been unable to get help with his $235,000 loan and is two months behind on the subprime mortgage he took out two years ago. Hernandez used to own three houses — two of which he purchased as investment properties, but turned one back over to the lender, sold another and faces foreclosure on the property where he lives.”
“Hernandez said he’s contacted several banks seeking to refinance his current loan, but they refused to consider his application. ‘I’m just so discouraged,’ he said.”
The News Herald from Delaware. “Foreclosures and delinquencies in Delaware are growing — the state saw its percentage of loans 30 days past due hit 4 percent in August, nearly a full point above the United States average and the ninth-highest rate in the country.”
“Once upon a time, in that bygone era when housing prices always rose and equity never vanished, the gentle gyrations of mortgage rates seemed like a soothing dance to watch. Today that dance has turned into a more dangerous — and unpredictable — game, with high stakes for people staring at the prospect of a reset on an adjustable-rate loan.”
“In the heyday of subprime, ‘there was the anecdote, ‘If you have a pulse, you could get a mortgage,’ said Bob Weir, executive VP of the New Castle County Board of Realtors. ‘Yes, it’s gotten tighter, absolutely. Subprime mortgages are no more. They’ve gone away.’”
“The money is still out there, lenders say, but credit scores have regained critical importance. ‘Back in the day — and by ‘back in the day,’ I mean a year and a half ago — you could get a premium interest rate with a 630 FICA score just like a guy with a 720 FICA scorer said Mario Glover Jr., Christiana branch manager for Synergy Direct Mortgage. Now, only the 720 customer has a chance. ‘What was good credit a year ago is just decent credit today,’ he said.”
“Insiders realize that no matter how far mortgage rates fall, there will always be people waiting for them to fall just a hair more. ‘Some people like to gamble,’ Glover said. ‘There’s Vegas for a reason.’”
From WHP CBS in Pennsylvania. “A group of angry homeowners decided to serve their own papers on the Central PA Bankers Association Thursday as a sign of protest against what they feel are unfair foreclosure laws.”
“One of those homeowners is Linda Pavlick, from Allegheny County. She says any day now she’s expecting the sheriff to put her house up for sale and force her out of a home she’s owned for 17 years. She refinanced three years ago with a subprime loan, which at first came with a reasonable a payment of $681 a month. That rate is now up to $1385 a month.”
“In Dauphin County, 877 homes were foreclosed on last year. This year, the number is already up 10 percent. In Cumberland County the numbers are even worse with foreclosures for 2008 already up 17 percent over last year.”
“These homeowners are convinced those numbers would go down, if they could simply sit down and talk with their lenders. Until then, Linda Pavlick says all she can do is pray for the chance to save her home. ‘It’s terror. How do you do it? One day at a time, we pay one bill at a time.’”
The Philadelphia Inquirer from Pennsylvania. “In this real estate climate, selling houses, vacation homes or building lots at auction could be construed as a desperate measure. Instead, developers say, auctions are efficient ways to turn things around quickly when inventory isn’t moving as fast as they’d like.”
“‘Our sales, as you can readily imagine, haven’t been what we expected,’ said Marshal Granor, principal in Granor Price Homes, of Horsham, which hired Sanford Alderfer Auction & Appraisal in Hatfield to handle an offering today of a ‘diverse’ package of seven approved building lots, three twin homes, two condos, a farmhouse and barn, eight ‘to be built’ twins, and a ‘to be built’ single-family house at Smith’s Corners, near Harleysville.”
“‘We decided that an auction would create that same sense of urgency that, in normal times, results in home sales. It’s a different method that we expect will achieve the same results,’ said Granor.”
“In May, Beazer Homes USA Inc. sold 26 of 40 remaining condos at its 60-unit Pointe at Moore’s Inlet in North Wildwood at auction. In June, Westrum Development Co. had similar success with 11 townhouses at its Hilltop at Falls Ridge in the city’s East Falls neighborhood.”
“Before its auction, Westrum had sold 19 of the 30 units at Hilltop at Falls Ridge, but the remaining units - including five luxury townhouses whose price had been dropped from $725,000 to the low $500s - weren’t moving. President John Westrum said he needed to sell the units to ‘pay down debt to build new models,’ but it could have taken till year’s end through the normal means.”
“Beazer waited a week to have all the deals clear and then let the unsuccessful bidders take a crack at the remaining 14 homes. ‘”We didn’t know how deep the market was when we started, but we knew we should keep some of the condos on the shelf,’ said Max Spann Sr., president of the Clinton, N.J., auction company that handled the Beazer and Westrum sales. He learned in the days when his family sold prized cattle that ‘with too many cows, you run out of buyers.’”
The News & Observer from North Carolina. “The plight of Triangle home sellers turned gloomier in August. Sales of existing homes in Durham, Orange, Johnston and Wake counties fell 39 percent from the same month a year earlier — the biggest year-over-year decline since the national housing bust first nicked this region a year ago, data from the Triangle MLS show.”
“Meanwhile, fewer buyers roamed the market as the number of homes listed climbed to a four-year high for the month — even as sellers budged on prices more than ever in the past six years.”
“‘The sellers aren’t getting what they want,’ said Ed Willer, a broker in Raleigh. ‘And the buyers — well, the lenders are beating them up. So it’s tough on both sides.’”
“The number of homes on the market swelled 8 percent to 14,041 in August — the most in any August since 2004. At the same time, showings dropped 18 percent from a year ago. And pending sales sank 29 percent to a five-year low of 1,702.”
“Willer, who is listing seven homes, hasn’t had a showing in a week. Two years ago, he estimates, he would have had at least seven showings. As traffic wanes, sellers are starting to price homes more reasonably — abandoning the ambitious price tags of two years ago.”
“For the first time in at least six years, the prices of more than half of the homes on the market have been reduced at least once. At least 52 percent of the 14,041 homes on the market are price-drop listings, up from 41 percent a year ago.”
The Winston Salem Journal from North Carolina. “Brad Church, the president of Bradford Mortgage Co. in Winston-Salem, said that the local housing market should not feel too much of a hit from the current crisis because local lending adjustments have already been made.”
“‘Many local lenders have been ahead of the curve, tightening lending standards since the first of the year,’ Church said. ‘That has led to a cutting out of some potential homebuyers compared with two years ago.’”
“Julie Poplin, the president of the Winston-Salem Regional Association of Realtors, said that ‘given what’s happened on Wall Street, I would re-emphasize to all that real-estate continues to be one of the best investments you can make. It’s tangible and is capable of providing shelter in the process.’”
The Memphis Daily News from Tennessee. “Deutsche Bank National Trust Co. in August retained its spot as the top seller of homes in Shelby County in terms of dollar amount, marking the seventh month out of eight this year that the New York-based trust company ranked No. 1. The only month Deutsche Bank National Trust hasn’t led the way was June, when it slipped to second place behind U.S. Bank NA.”
“But Deutsche Bank National Trust in July reclaimed first place and then in August held that slot by selling 66 homes at an average sales price of $53,472. It edged U.S. Bank, which sold 56 homes at an average of $55,414.”
“At the same time, sagging consumer confidence has sent new home sales reeling, adding to the disparity between trustee and homebuilder sales. Charles Morgan of Vintage Homes LLC was the top builder for this report. As he noted, the sheer volume of homes being sold on the courthouse steps is creating additional cause for concern in the industry.”
“‘Homebuilders cannot match foreclosure prices,’ Morgan said. ‘One of the reasons Vintage is so successful is we are matching or beating the foreclosure prices. There’s a lot for a builder to do to compete against foreclosures, but most builders don’t want to do that.’”
“‘This is the time to buy,’ said noted Rob Stone of Real Estate Professionals LLC. ‘We’re coming in after a decade at least of tremendous appreciation. All of a sudden, the days of when you could buy and expect appreciation to continue are gone. On the flip side of that, we all believe it will come back - it’s just a matter of when.’”
“But even Stone agreed that it might take awhile for homebuilders to reclaim their place as the county’s top sellers. ‘I think it’s going to continue for the next 18 to 24 months,’ he said.”
The Memphis Commercial Appeal from Tennessee. “Arlington’s growth rate has steadily fallen as the economy has tightened. Now, a key measure of growth is virtually frozen. Last month, town officials issued just one residential building permit, compared with nine in August 2007. Arlington issued 225 new home construction permits in 2007, a 54.8 percent drop from 2006 when 498 were issued. This year Arlington has issued 93 permits.”
“The dramatic drop in applications, say home builders, is the result of economic woes. The drop also reflects a large number of new homes sitting in their inventory.”
“The latest census figures reflect an Arlington population of 9,707, but Mayor Russell Wiseman estimates it is closer to 11,000 now. One day the town projects to have 57,000 people. That’s a figure Wiseman agrees will be a long time coming if these latest trends continues.”
“‘This drop is obviously out of our control, but it has taken some things we were planning off the table,’ Wiseman said.”
“In Bartlett, officials issued eight permits in August, double the four in July. Jay Rainey, the suburb’s chief administrative officer, said the city would normally issue 25 to 30 each month.”
“‘We’ve got 1,500 lots out there ready to build on, so the residential development has absolutely stopped,’ Rainey said.
“‘There isn’t anything you can do about it,’ he said, adding: ‘I thought it was going to be bad, but I didn’t know it was going to be this bad for this long.’”
“‘We decided that an auction would create that same sense of urgency that, in normal times, results in home sales. It’s a different method that we expect will achieve the same results,’ said Granor.”
I’m trying to get excited about auctions, but the inability to really know what you’re getting, the fact that disclosure protections don’t seem to apply, the “foreigness” of the auction world, and the fact that financing is much more difficult makes me wonder if this will benefit individual homebuyers in significant numbers as much as speculators? Would love to get Ben’s or another auction maven’s take on this.
The ugly truth about auctions is many if not most aren’t absolute auctions, as in things have hidden reserves on them…
I should know, as over the years i’ve given a myriad of numismatic delights to auctioneers in the city of angles, as I found the public tends to overpay almost always in an auction setting. Every last item I ever consigned had a reserve price.
‘we knew we should keep some of the condos on the shelf,’ said Max Spann Sr… He learned in the days when his family sold prized cattle that ‘with too many cows, you run out of buyers.’
These guys are just gaming the market, while they keep punching out ‘cows.’ Next year, they’ll undercut this years buyers and they could care less.
These builders can either finance it themselves, or find it. I had a young guy recently ask me about a ‘luxury’ house a builder offered him for $700k, where they were charging a million. This kid can’t afford $700k, but the reduction is sucking him in. I didn’t follow up, but he seemed headed off the cliff.
What is it about people that make them such suckers for bargains? Scammers have played on this since time began, and even when people know what’s going on, they often still fall for it. Does it make a person feel smarter or more special to dupe someone else by getting something for a bargain?
When I see something drastically marked down at a store, I just think about what a huge markup they must’ve had or that the item must be pretty worthless if they can’t sell it. If it’s a private person, I have more than once told them the item is underpriced. I have refused to barter (when expected) and offered asking if it was some poor person who was struggling. I have made a few very loyal acquaintances that way.
As our Wall Street buddies are finding out, what goes round comes round.
“As our Wall Street buddies are finding out, what goes round comes round.”
Except it doesn’t seem to be coming around ENOUGH. I just watched $hrubby on C-Span address the nation regarding the “crisis”. ROTFLMAO! Don’t you DARE sell short the financial stocks, or you will be caught and “persecuted”.
Well, in that case, if they want to play rough, get out the big guns - get completely out of the markets and stop paying federal taxes. Do it legally, by scaling back your work to where you make less than the taxable amount. Live off your savings, work under the table, be very very frugal, whatever it takes.
What, you have a huge house/boat/car payment? Forward the bills to Srubbery and go reinvent yourself.
Well, I just liked his use of the term “persecuted”. The prudent have been “persecuted” long enough. I’m used to it.
LMAO, missed that one. And I thought I abused the English languegue…whoops, language.
Lost in Utah,
OR.. just move to OR. Working the flea markets, having perpetual garage sales as well as a working relationship with the local manager at Nickel Ads is an accepted lifestyle here!
DinOR, I did an economic development survey once for a W. resort town of about 10k people, we talked to a huge sample, over 30% and found that about 28% of the population worked under the table. And that was based on those who would admit it, making me think it was even higher.
Lost in Utah,
I’m sure for the most part it’s no different than the pedophiles. It’s an underground ‘network’ and you and I don’t know the rules, signals and super secret handshake?
We’re part of the unenlightened nerds that are “still trying to make the system work for them” and haven’t figured it out yet. Since I’m not a ‘native’ Oregonian ( even though I’ve lived here for 25 years ) I’ll never be invited to that “inner circle”. Probably wouldn’t surprise anyone to find that many “successful” people here actually run two distinct and seperate lives.
Din, it’s easy to gain admittance, just have a skill that someone needs (plumber, etc.) and ask to be paid in cash. Kind of hard to do with a real job.
RE: get completely out of the markets and stop paying federal taxes. Do it legally, by scaling back your work to where you make less than the taxable amount. Live off your savings, work under the table, be very very frugal, whatever it takes.
I’m right there with ya on this one, Lostie.
Prudence, honesty, and ethics are dead in this country.
It’s a complete free-for-all now.
Get what ya can-and get out if you can.
Until very recently, I didn’t like businessmen who cheated on their taxes. When friends tell me about their scheme, I would say “shame on you!”
How things have changed! Since Harry Houseflipper can borrow money, not pay it back, and let ME (the taxpayer) cover his ass, I have completely changed my opionion.
Not Paying taxes is A PATRIOTIC ACT OF CIVIL DISOBEDIENCE. Like Rosa Parks refusing to give up her seat on the bus.
I plan to not pay taxes if they uncap Social Security legally–by stopping work. I’ll simply fire my staff and shut my doors–but I’ll try to get a local TV or newspaper interested in covering the story of the first Barak Obama casuality.
In this climate, it is HONEST not to pay your taxes. Just be up front about it, and not try to lie about the fact you’re not paying them.
Same with antique auctions.
Guy in Redlands used to have his auctions in a rundown type of old bldg behind a mechanic. Guy did well, and then he moved to a new, much nicer bldg with good parking and the prices realized went up at least 30 % along with the house take.
So, put some lipstick on that pig and it just costs more.
Auctions, fun, but leave your wallet at home.
There is an old saying (meaning I don’t know who said it) . .
Even if it’s on sale - it’s not a bargain if you don’t need it.
“The payments no longer made sense”
Well they never did in the FIRST place but…
Each and every jingle mailer gives that much more credibility for Hank Paulsen to say “Irresponsible lending… AND irresponsible borrowing!” It gives him and his cronies the perfect right to do as they see fit to serve their own needs and the rest of us be damned.
Thank you Mr. & Mrs. Newlywed-Anon. Best of luck in your now seperate paths in life. ( She was cheating on you anyway! )
Basbedonyev Comrades!! You likes shiny new governments program for saving Capitalism?
Auction on 9-28-08 in Miami
Has anybody recently been to a real estate auction? Any experiences they like to share? What does the inventory normally go for? Any schemes and pitfalls I should be aware off?
If you want to get the skinny on an auction, here’s my advice…
Position yourself near the front of the auction, and face towards the audience, the same view the auctioneer has.
Typically a reserved auction has a few shills bidding in the audience, and they will bid on every house that comes up.
That’s your tell…
aladinsane,
I’ll say it more simply. My father used to say “An auction is something you *don’t want to ‘win’, who wants to be the guy that was willing to pay more than anybody else?”
I love auctions because they are a psychological mindfield, with clearly defined winners and losers, with a sense of urgency thrown in, just to make em’ more exciting.
It’s no place for amateurs…
You make it sound like a casino…
It might not be a place for people who don’t like gambling either.
My ex-father in law, a bit of an eccentric, once went to a farm auction to buy equipment for his fledgling vineyard (which froze after one good cop, I mean crop) - he came home with a pickup load of chicken feeders when he thought he was bidding on an old tractor.
Donated them to the 4-H kids. You gotta know what you’re doing. He later did the same thing and bought an old beater car. The auctioneer was a fast mover.
You definately gotta pay attention. It’s best to watch for a while before jumping in. A fast-talking auctioneer can be difficult to understand, but it’s similar to trying to understand someone with a foreign accent, once you get used to it your fine.
I’ve bought silver at below spot at auctions. I once saw someone buy ten dollars worth of quarters (face value, just plain old quarter, not silver) for less than $10.
I can’t even get face value for coins at my bank anymore. The irony is that they’re worth more as scrap. Banana republic here we come.
I bought a Quarter for almost nothing in an auction, and sold it for $80,000.
And here’s the flipside:
At the dead people’s auction (Los Angeles Public Administrator) about 10 years ago, there was a lot that had 2 square plastic non-see through Nickel tubes full of Swiss 20 Franc Gold coins (58 per tube) and the description was “foreign coins” with an estimate of $10.
I knew i’d have to pay up a bit for it, but thought i’d make a grandido or 2 rather easily.
@ the time, the melt value was around $6,000, and bidding stalled out @ $1,500, and it was just me an a bag lady (that’s what she looked like) bidding.
She ran me up to $5900, and I made her pay $6300, more than I wanted to, but I wanted to make sure she overpaid…
what was the 80k quarter?
I’m not a numismatist. I just sometimes like to try and pick up a little silver at spot or so. Or maybe a straight razor.
Mostly I enjoy the atmosphere. And I’m a generally nosy person, so I like seeing what other people own (or in the case of estate sales, “used to own”).
I was at an estate auction once, when this cardboard box of oddball crap came up……no bids.
The auctioneer pulled out his wallet, threw a five dollar bill in the box, and said “C’mon folks! You know it’s worth at least five bucks!”
One guy bid 50 cents, got the box, pulled out the five bucks, and threw the rest in the dumpster next to the auctioneer.
Great story. There is a lot of psychological stuff going on at auctions. The auctioneer of course is trying to get people bidding. The 5 dollar thing is a classic example of how people tend to maintain consistency. When someone publicly states he is going to do X, he is more likely to do it because of the public statement even if X turns out not to be the best thing to do, for the sake of being consistant.
So the auctioneer throws 5 bucks in. Some few people don’t bid maybe b/c they figure it’s not worth 4 dollars (assuming they raised the 50 cent bid to a dollar) to have to deal with the box but no doubt a few were “sticking with thier guns” about not bidding for the box.
My dad used to either buy only items that got no bids or wait until after the auction and see if anyone bought a “lot” of things for only one item. My dad’s first combine cost $20, the guy that bought it only wanted the engine on it, so dad rigged it to run off of the tractor PTO. He got at least 20 years out of it.
Value vs price, most home buyers still don’t get it.
That antique auction in redlands, the stuff is getting more expensive, and yet it is the same dusted up stuff from before, and frankly, I think I have seen that same old “Oak” stuff a hundred times. Was there really that much stuff that looked alike?
Rule #1: If you see anybody in a Tuxedo, run for the exit!
I participated in one for some condos in New Smyrna Beach back in Feb. The thing you have to do is the following, which is what I did:
1) Find out the sales price of comparable units in the hood 3 years ago.
2) Assuming you are talking about Florida, cut it by 65% at the minimum.
3) Don’t bid above that, no matter what.
I did that by making $145K my max price on a condo that sold for $400K 2 years ago. I was outbid in 10 seconds and it sold for $240K. I passed. Now I check similar units in the hood and some just went on the sell block for $180-$190K. In a couple of years I may pay even less than $145K.
“Crime really does pay, in particular, when that crime is sanctioned and directed by the U.S. Government.
If all of the criminals on Wall Street and Washington DC were rounded up and sent to jail it would break the nation trying to feed and house them. Nope, the corruption is too big to fail and therefore it won’t; at least not just yet.
When you have an economy that is crumbling, adding weight is not a recommended procedure. What is currently being considered is pure lunacy and criminal in nature. America is broke and yet our government continues to add unprecedented debt to protect those at the top of our horribly corrupt system.”
mikefolkerth dot com
Rope is cheap.
We’re talking a lot of rope here, Blu, might cost a bit unless you recycled it. But I say spend the money and get it over with.
The answer my friend
Is hanging in the wind…
Yikes, too many old Westerns make that image a bit much for my sensitive brain, anarchist or not…
“The payments no longer made sense as the home’s value had dropped to about $350,000, less than the value of the loan. There’s a similar story behind many home foreclosures in Loudoun County.”
I was spitting mad yesterday about the “RTC2″ bailout, but this quote is exactly why the govt’s plan won’t do anything to stop the trainwreck. You cannot make someone pay their mortgage, and as more and more FB’s realize they are paying a big chunk of their income on a declining asset (and they could rent down the street for less), they will want out.
Nice spike on the 10-year t-bill today -); Was around 3.4% yesterday, up to 3.75% today.
Yeah a VA story!
I just wonder how all these walker stories will play out down the road. The house price declined so we’re not paying for it anymore? Well my car began depreciating immediately but I still paid the note. Now I own it.
The wrong people are having to pay restitution for all these fools/crooks that #$@#ed with real estate. A county in VA (prince george?) is making cops take leave without pay to balance their budget. Fairfax County is lowering/freezing teacher’s salaries to balance their budget. Yup, make the teachers and cops pay for all this. After all the US now regards them as low-rent slaves.
I’m really beginning to hate this country. Or what its become. The inmates have taken over. What if we refuse to pay our taxes knowing that the money will go to “solve” the credit “crisis”? We will go to jail. There needs to be a revolution. Seriously.
I was wondering if there would be enough renters or interested parties to do a protest on capitol hill? But it’s only good if it gets lots of attention, and since the people at the news media most likely have an interest in hanging on to their home values the likelihood of them covering it might be low.
Lisa, your are correct. In fact I see absolutely no reason to pay my mortgage anymore. My tax money will just be funneled through the government to buy my bad mortgage from the bank, and I can just wait for my principal reduction. The bad credit is nothing compared to what I stand to gain, no payments for a year and then a reduced mortgage payment. Spread the word to your friends and neighbors.
Lisa,
Exactly, and what better excuse to call out the entire fire brigade? No mention of illness etc. just, it no longer made sense.
Well gosh thanks so much. You don’t think any of the rest of us haven’t made purchases we regret?! Seriously, I can only recall a few I *haven’t regretted, but that in no way absolves me of my obligations. At ‘only’ a 25% hit to their equity it certainly could have been worse. Just look ask people in the IE?
Won’t the additional int. rate they’ll most assuredly have to pay when they go to qualify again easily DWARF the 100k they’re under water? I mean over the life of the loan, “I” think it will ( assuming they can get one! )
“Fueled by a lot of emotion, the couple wanted what many others continue to seek today, a place to call home after their wedding.”
Reading stuff like that makes me irritated. Its something that goes beyond housing. Its that the majority of people who get married go on auto pilot:
1: Must buy house
2: Must have kids to live in house
3: Must get kids into the BEST schools
4: Must buy large, “Safe” SUV…
Me and my Wife got married two years ago. We still rent, don’t care to buy until prices are better. So many people Im know who get married almost put themselves under financially just to buy a house since as we all know- when you get married, if you still rent, society will think you’re a loser.
I own , but may start lying ” yep, we rent”
cocktail chatter
jetson_boy,
As much as we slam it ( under the current conditions ) home ownership, long term, is a GOOD thing. At least it used to be? All that aside the tax advantages, security and ability to improve your property aren’t worth starving your retirement, not taking vacations, praying your car never needs new tires or being able to afford a sitter so you can eat out once a month.
Owning things is good, oweing money on things is not. My mom owns her own house (no mortgage). It’s a good thing - no rent and she has real wealth. Converting that wealth to cash so that she can move has been a challenge, but the ownership of the asset is still a good thing.
According to my mother, she and my father lived like church mice right after they got married.
During this time, they teamed up to put my dad through grad school. (Mom worked fulltime and Dad tunneled into the Ph.D. student thing. He got his master’s and doctorate in just under three years.) Then, to celebrate, they went on a European honeymoon.
I came along four years later. They moved into the house a couple of months before I made my grand entrance into the world.
My parents lived in an apartment when I was born. They had 1 car and mom took the bus to work. Dad had an MSEE and mom a BSN. As far as I can tell living my first year in a rented apartment has not hurt me at all.
Then when they bought their first house in a nice neighborhood in a college town it cost about 1x gross salary. With a little help from my grandparents NO BANK was involved in the process.
Mortgages are not necessary for a healthy housing market, much to the contrary of what the politicians and banksters say.
Move to Denver 1996 and a dingy house 1/3 the size in a shaky neighborhood in a boom- bust oil town costs me 2x salary. That’s progress how?
Oh it’s not. I agree, my family lived in an apt. until I was 3 and I think it turned out mostly normal. That’s the path I want to put my youngest daughter and her husband on.
When the land boom has gone completely bust, we can pick them up a lot or buildable acreage ( assuming it already has well, septic and power ) I’m perfectly willing to pony up for the cost of bringing those services to the property. Oh and not a penny more. By owning the land outright they can use a ‘park model’ or single-wide while building their permanent residence and live mortgage/debt free.
At least I’ll know we spared them 30+ years of indentured servitude.
“One of those homeowners is Linda Pavlick, from Allegheny County. She says any day now she’s expecting the sheriff to put her house up for sale and force her out of a home she’s owned for 17 years. She refinanced three years ago with a subprime loan, which at first came with a reasonable a payment of $681 a month. That rate is now up to $1385 a month.”
I’m tired of all this crappy newsprint. Linda did not own her house for 17yrs, Linda was a caretaker of the property for the banking system and then chose to refi for some extra spending money and now has to pay it back and doesn’t feel that she should have to abide by the rules to which she agreed. Linda is about to get a ‘Life’ lesson.
The problem is that the government wants desperately to not allow Linda to learn that life lesson. What they really, desperately, want her to learn is that her welfare is entirely dependent on what “program” the government can develop to “help” her. Then she’ll become the ideal democratic voter (I mean democratic in the generic sense, since both parties are now playing the same game).
We’re on our way to ruin, but the politicians are gaining power every step of the way. This is exactly how a democracy degenerates into some kind of totalitarian, despotic state.
These sob stories really piss me off. They left the part out of the story where she liquidated her house to but a bunch of crap, now the value isn’t worth what she owed + what she sucked out of it. She didn’t do a refi to lower her payments. If that were simply the case, she could EASILY refi back out considering the amount she owed was presumably far less than the house’s value.
“Leroy Hernandez, who lives outside of Richmond, Va., said he has been unable to get help with his $235,000 loan and is two months behind on the subprime mortgage he took out two years ago. Hernandez used to own three houses — two of which he purchased as investment properties, but turned one back over to the lender, sold another and faces foreclosure on the property where he lives.”
Let’s see, Leroy owned three houses two of which were investment properties and Leroy can’t even afford the mortgage on a $235K loan. God help us if Leroy is able to lose all three and then through a Freddie/Fannie restructure is allowed to repurchase another in less then 7yrs.
I have no problem with Leroy purchasing another home in 7 yrs, if he has a 20% downpayment, an appropriate income, and a decent FICO score.
Gambling on houses is no different than gambling in the stock market, except that the wealthier self-described “free market capitalists” who gamble on stocks are apparently able to socialize their losses, because they’re too big to fail.
Well given your insistence on a 20% down payment..!
But there really IS a difference. Other than what’s out there on margin ( and obviously that’s not allowed in a retirement account ) we’re talking after-tax, cash money here. If someone wants to p!ss that away on a penny stock tip, that’s their business. Oh btw, where was this sense of urgency to bailout unrepentent day-traders from the 90’s that lost their entire net worth?
Sorry, apples and oranges.
North Carolina was just like everywhere else. When I moved there in 1998 all the new houses were huge and around $200,000 (the average house there was more like $100,000). People just couldn’t afford those beasts. To a Californian $200k may seem “cheap”, but it’s not.
“Insiders realize that no matter how far mortgage rates fall, there will always be people waiting for them to fall just a hair more. ‘Some people like to gamble,’ Glover said. ‘There’s Vegas for a reason.’”
Actually, your odds are better playing old rules 2-deck blackjack or craps with the 5-2 odds than playing roulette with interest rates.
If you can count cards like the MIT guys, you actually have a slight edge over the casino.
I received a notice from the bankruptcy court regarding an individual who owes me a small sum of money.
The bankruptcy court is abandoning his property in Denver Colorado.
It reads:
1. The Trustee shall abandon the real property of the estate located at
***************.
2. The property is burdensome to the estate;
3. Said property is of inconsequential value and benefit to the estate.
By: Bankruptcy Trustee
This is going to occur more and more.
Quote of the day:
Mike Bloomberg casts a wide net. The mayor of New York, former Wall Streeter, and founder of financial services company Bloomberg (which made him the 8th richest person in America with a net worth of $20 billion) told reporters Tuesday that, “You can’t just blame the banks, you also can blame the people that took out mortgages … We were brought up that you first had to put some savings together and then enjoy. But this whole society has gotten to the fact that we’re a ‘now, give it to me today’ kind of society. I think regulation has not been adequate.
“There’s no one person to blame other than all of us,” he added.
Mirror, mirror on the wall…
Who’s gonna end up taking the fall?
Speak for yourself, monkey boy. I had no mortgage and lived within my means. I’m a minimalist and don’t need China’s worthless garbage.
comment for Bloomberg, not the Lad.
Bloomberg seems okay. I don’t know too much about him but he seems to have sense. When he gets off the 6 Train in the morning he sure looks cranky. I think that job would make me cranky, too.
“…..”now, give it to me today” kind of society.”
Bloomberg can go pound sand. I haven’t seen to many suits walk away from money on the table.
If you are a CEO and the company does well under your direction (whether you had anything to do with it or not), you walk away with millions.
If you have a total anal-cranial inversion, and blow up the whole show, you still walk away with millions.
It’s good to be the king………
He comes across to me as a humorless prick. Sanitizing New York and depriving it of soul. Some wag writing for Vanity Fair described New York of today as having imported third rate architecture from the Middle East and Europe. NY used to be a blast when I wuz a pup. Now it has the biggest crooks in suits on the planet, but by God, no ciggies or trans-fats.
“There’s no one person to blame other than all of us,” he added.”
LMAO! I once repped for a company that got “new management” on board that just about drove the place under. One of the new prick VPs called it a “company problem”, painting everyone with his brush of incompetence and idiocy.
Bloomberg has the dubious honor of having a city filled with the biggest crooks and muggers on the planet. It’s the financial crime capital of the world. So, no problem, he can just spread around the blame. Because maybe his “financial news” service had something to do with it, he has to point the finger at everyone else.
Still a few idiots out there buying overpriced shacks in my Arlington, Va. neighborhood. We’ve got a ways to go.
Pass the popcorn.
Here in W. Colorado, craigslist just swells more every day with houses for sale, yet the prices seldom drop, and when they do, not by much. Just yest. talked to a woman who proudly announced she and her husband were buying a piece of overpriced land. I’m so tired of it all I didn’t even bother trying to point out the obvious to her.
I am now realizing I have for many years given people the misplaced benefit of the doubt for being intelligent/informed (I know, I know, they don’t always go together).
Southeastern Virginia still has some buyers. Definitely a good amount of REO. The local paper (Virginian Pilot) hasn’t been negative enough, but they are in the pockets of the Realtors.
From the original post:
“She’s seen an increase of cash payments for properties and investors taking out lines of credit with the intention to buy foreclosure properties and rent them for long-term hold. ‘The longer you hold on to it, it goes up over time,’ she said. ‘We are still 13.1 percent below our prices from a year ago.’”
Some of these “investors” are going to find that landlording isn’t as easy as renting to the first warm body that comes along.
I just took delivery of 50 gold buffalos from kitco. Will be several weeks before they ship it. They are not taking orders for silver at all right now, just 1000 oz bars.
how big is a 1 thousand troy ounce bar?
I wonder how many people can afford to buy one
In 1979-80 the easiest to sell Silver item was 1,000 oz Comex bars(70 pounds of doorstop), because all the physical metal was going to the Hunt Brothers & Co., and now it’s the hardest to sell Silver item, and only thing left for the public to buy.
Things change~
“Realtors take a slightly different view, pointing out that June served as the second consecutive month in which sales reached more than 500, a number not seen in Loudoun County since 2006.”
“‘[It's the] highest level of sales in five months, and primarily it’s due to buyers coming back into the marketplace because there are high levels of foreclosures on the market for good value,’ Sue Smith, (an) associate broker with territories in Loudoun, Fairfax and Arlington counties, said.”
I call BS. The RE insustry ignores the foreclosures when they affect the values. So let me get this straight, they want to count foreclosures in the sales count numbers to show a busy market, but not count the sales prices as comps.
I call b.s. because it’s coming from a realtor. All the way down they’ve been claiming it’s the bottom. I’m sure they successfully duped some poor idiots into catching a falling knife. They are unsophisticated used house salesmen.
“The payments no longer made sense as the home’s value had dropped to about $350,000, less than the value of the loan. There’s a similar story behind many home foreclosures in Loudoun County.”
I think after paulson loses the first 100 billion he will be back to Congress with a idea for a new law. Its OK for his banker buddies to walk but joe home owner, no they will be made to pay now that the government owns the note.