What People Expect To Get For The Price
Readers suggested a topic on what to expect for the money. “I want to know just what people expect to get for the price that they are willing to purchase a house for. Let’s take for example something in the $400K to $600K price range. This can be a norm for places like CA. Are we talking a bare bones structure tract house here or are your expectations for this range elevated to a custom one of a kind house? Do you expect to get more land at these lofty prices? What about a view (I know every house has a view of something), will you pay extra for a view and if so what of and how much has to be viewable? (I have a friend who has a house in Cambria, CA who says she has an ocean view, if you go to one corner of the house and look at a very small corner you see some ocean water).”
“I recently set in on a RE negotiation who stated that he just sold a house (cash) in Seaside, CA for $20K over asking because it has an ocean view (two miles away and 90% of the view is crappy house rooftops? For me a beach house is on the beach or within a block or two away. For an ocean view I want to hear and see the waves crashing on the shore otherwise it is just a view of water in the distance. A view in a city high rise like SF doesn’t do it for me as all I see are roof tops but at night the city lights aren’t bad.”
“Do you expect to have a house in this price range furnished according to the price you paid? Here in Salinas, CA most of the houses I’ve been in a furnished like a frat house and people living in them are living like slobs. Do you plan on making the house your own and if so does that mean balanced color and art work or does it mean slab counter tops and stainless refrig and stove top? Does it mean swimming pool, spa, fancy BBQ and pizza oven?”
“I ask because RE use selling points as slab tops, stainless appliances, fans, views, as a means to require higher selling prices.”
One said, “I would not buy a house for $400K. I would pack up and leave to a lower cost area. Oh, wait. I already did that.”
A reply, “We have looked into this. The hitch: jobs.”
One had this. “This is one of the hidden benefits of working from home. It allowed me to get the hell out of California, and added about 25k a year to my bottom line. I was renting there and am here… I think if I bought in both places, that savings would be on the order of 40k a year.”
“The weather isn’t THAT nice, and what nature you’re allowed on is fairly trampled.”
And another. “I lived in both Phoenix and Moorpark CA. Moorpark =400K 1650 sq ft. Phoenix = 200K >2000 sq ft.”
“I used to walk in Phoenix under the power lines next to the tracks between Chandler and Ray even in the summer at over 115F it was sureal like being on a moon base, power lines crackling, water flowing in a cement culvert, nothing alive out not even red ants. Had to wear a big hat. Bring water. Phoenix was alright. Main thing I didn’t like about Phoenix was the air pollution.”
Finally, “Sounds awful. I am living on the Kawartha Lakes right now, free of real estate, if you don’t count the square foot of earth beneath my CQR. It is ironic, the money you pay over 30 years to buy that $400,000 house, so that you can have that prestigious job in a cube farm, would support not owning anything for many lifetimes.”
The Merimbula News Weekly, “It’s the sort of news that bunk-bed manufacturers won’t want to hear, but Sydneysiders have entrenched their love affair with the four-bedroom house, to the point where some experts believe it has replaced the three-bedder as the traditional family home. Harley Dale, the chief economist at the Housing Industry Association, said the preference for four bedrooms was a trend that had been under way since the 1990s, pushed along by rising household incomes that had created ‘an aspirational element’ in buyers’ housing choices. While the overall size of homes had plateaued several years ago, the desire for each occupant to have their own room hadn’t, he said.”
“Strong overseas migration was another factor, which ‘reflected people having a preference for intergenerational living under one roof, which requires more bedrooms’, as was the growing trend of caring for sick relatives, Mr Dale said.”
“A flat market and high transaction costs of selling a house were also encouraging many who might have upgraded to a bigger house to renovate instead and add more bedrooms. Architects report this is a common request among clients. Four-bedroom houses are now preferred in new estates, too, such as Greenhills Beach near Cronulla where almost every house on the 95 lots sold so far will be a four-bedder.”
“Dr Andrew Wilson, the senior economist at Australian Property Monitors, said these houses were the ‘minimum expectation’ among new-home buyers.”
The Calgary Herald. “Along with new docks, two luxury condo buildings are being built overlooking the new marina, with some of the balconies actually hanging over the water above it. WatersEdge Condominiums and Marina encompasses two opportunities for buyers — condominiums and ‘dockominiums.’ The condos each come with a slip, with more slips separately for sale.”
“Crystal and Danny Dokken, who own a home in Sylvan Lake’s Points West Resort, had been leasing space for their boat at the old marina, so when the opportunity to buy it permanently came up, they jumped on it. With hectic lives, it just makes sense to the family to have the boat at the ready through the summer, allowing them to just hop aboard, unhitch and head out onto the lake.”
“‘It’s an excellent investment and opportunity,’ says Dokken, who invests in agricultural land in Saskatchewan. Her husband, Danny, is a manager with Haliburton Service Industries. The dockominium slips will have monthly fees of about $45 to cover locker storage, showers, change rooms and electrical hookups. WatersEdge condo suites range from 1,235 to 2,118 square feet and are priced from $490,000 to more than $1 million.”
“The four-storey buildings will have heated underground parking. The top-floor suites each have a loft and a 26-foot glass wall with cathedral ceiling facing the lake in the great room.”
The Manteca Bulletin. “Back in the 1950s, the typical new Manteca home consisted of a one-car garage, a little over 850 square feet and had two bedrooms and one bath. Today, Manteca tract homes are surpassing 4,000 square feet and can offer up to eight bedrooms, five bathrooms, three-car garages and a rotunda if you’re so inclined.”
“And if you think 4,000 square feet for a tract home is pushing the envelope, just look to the southeast of those subdivision monsters that cast shadows over streets in Woodward Park and Rose Garden and take in ‘The Mansion’ - a 28,000-square-foot custom home resembling an Embassy Suites hotel that includes a home gym and the ultimate option package of underground parking and elevators.”
“Somehow, the idea of building a McMansion - a larger version of homes built in the early 1990s without losing some of the nice exterior architectural touches - went out the window in at least three new developments that started in the early days of the decade. They were of the McMansion genre but they look more like the same architecture of Home Depot and Wal-Mart than a home - big box, blah side and rear walls and little, if any, architectural relief on the front elevations.”
“Side setbacks were minimized and homes built in a perfect rigid line adding an ever flatter dimension to the concept of row houses. And what would you expect to pay for these big box charmers? Believe it or not, they were a lot more per square foot than the McMansions with character. It wasn’t unusual to see the tributes to the box come in at just under $500,000 or the price of roughly 70 Manteca flat tops 50 years prior.”
The Mercury News. “Bay Area home sales in June erased any doubt that it’s a sellers’ market, with some frantic buyers even sweetening their offers with a timeshare vacation or a couple of months of free rent. Real estate agents said low inventory is driving up prices in some areas as people try to outbid each other for more expensive homes while ultralow interest rates are drawing in first-time homebuyer.”
“‘Some people are offering free rent back, or a vacation for a week anywhere in the world for the seller,’ said Mark Wong, with Alain Pinel Realtors. ‘It’s crazy. But you’re talking about less than 10 grand. If you get the house, that’s a good deal.’”
“Wong said the craziest offer he’d heard of was from a buyer who simply offered to pay $200,000 more than the highest bidder. ‘This guy probably had been outbid 10 times and was desperate.’”
“In Sunnyvale, a homebuilder held a ‘Bingo style’ drawing last weekend for 12 homes with 60 potential buyers. ‘The market has just really heated up in Silicon Valley,’ said Susie Frimel, marketing manager for the developer, Foster City-based O’Brien Homes. ‘Inventory is really tight and a lot of people are very well qualified and want to take advantage of those low interest rates.’”
“One frustrated home shopper is Henry Chan. The 34-year-old mechanical engineer entered the Bingo-style lottery last weekend. The developer drew marked pingpong balls to determine the winners. Chan didn’t win, but said he hasn’t given up. He made an offer of $20,000 over asking price on another home last weekend and lost out to an even higher bid. ‘We continue to shop around,’ he said.”
““One frustrated home shopper is Henry Chan. The 34-year-old mechanical engineer entered the Bingo-style lottery last weekend. The developer drew marked pingpong balls to determine the winners. Chan didn’t win, but said he hasn’t given up. He made an offer of $20,000 over asking price”
Unbelievable that the people in the bay area have learned nothing. This is not to be taken as racist but asian people in this area seem to gamble a lot and when they see prices going up greed seems to get the best of them (not all of them). I know an asian lady down the street who bought in 2010 what was over a Million dollar peak boom for $800K and the house is now in the high $400K and she laments the bank won’t refi the loan. Two more Chinese women in the Carmel-Monterey bought (one pre-bust and one in 2010); both are underwater by over $200K.The one who bought in 2010 bought for her daughter by overbidding others, the second says she wishes she would have believed me and sold pre-bust.
Maybe what buyers there can expect is an orange ping ping ball, paying for someones vacation, and being underwater in the years to come.
‘when they see prices going up’
Or so they think. IMO this is just another part of the bubble. At the first whiff of a ’shortage’, look at how many people are falling right back into the mania. Offering tens of thousands over asking, buying vacations? That’s even worse than promising to feed squirrels.
In the spirit of “no FB dollar shall escape” it appears that there are still pockets with dollars to extract, and the game will continue as long as more dollars can be sniffed out.
Ben
Yep, bidding wars are now “Highest & Best” offers, aka as a blind auction. We will never participate in one again. We don’t own a money tree. (But if anyone knows where to pick one up on the cheap, I’m all ears. LOL) H&B seems to be the marketing plan among the NAR gansters.(So Ca reference)
Diana Olick mentioned an interesting development about cloud on title on REOs causing contract cancellations in a recent piece. Clear title was a driving point for buying an REO. Interesting and scary development.
Food for thought: Are deep pocket REO Bulk Investors running into unexpected title issues?
“(But if anyone knows where to pick one up on the cheap, I’m all ears. LOL)”
The best way seems to be winning the birth lottery and growing up as a trust fund baby. (Now let’s wait for the trust fund baby posters on the HBB to come back with their self-made man fantasy rants…)
There are trust fund babies here? That’s surprising.
Kind of thought it was all a bunch of people sitting in a tiny apartment listening to the neighbors pound out another welfare baby. (All of them sitting on a giant pile of cash they pulled out before the crash, of course)…
Forgot: It’s a fun new apartment game.
Guess the intoxicant.
Go out of the way not to see your neighbor for a month. Then guess which intoxicant they use based on the way they looked the last time you saw them.
My neighbors are all smoking meth and bath salts. Chick out back looks like a damn scarecrow.
High Desert Renting. Only do it once, but you gotta do it.
It seems the Specu-Debtors, Realtards, mortgage pimps and their paid proxies in the media are doing the same.
Diana Olick mentioned an interesting development about cloud on title on REOs causing contract cancellations in a recent piece. Clear title was a driving point for buying an REO. Interesting and scary development.
Diana is SUCH a party-pooper. And a meanie.
I’ll bet that a lot of in-VEST-ors are un-friending her on Facebook.
THAT’S funny, Dave. Absolutely right on.
Speaking of cloud on title, its a big issue right now for Trustee Sales, which adds to numerous other risk factors, makes it a stay away for those not willing to do their homework. Caveat Emptor for sure!
The BK route is #1 in country records. In Ca (for instance) I heard the house may still go to auction if there is no equity, (the stay is useless) and it’s used as an extend mechanism. In Ca the right of redemption is over generally when the auctioned property is purchased. (Not sure about the time between the transaction, and the recording of the deed.)
The environment in the Silly Valley area seems to be unreal. Maybe they invented a reality suppression field or something. Salaries are a bit higher and dual incomes seem to be the norm, but even considering that, prices are in the stratosphere compared to incomes. Yet my colleagues out there seem to think that its all within reason, and scoff at the idea of moving to our campus in flyover country. I guess they’re willing to put up with traffic jams, high taxes, crime and utterly unaffordable housing for the “prestige” of living out there.
I always forget about the 2-income factor since my wife stays home. I’ve heard that if you work in tech out there you can be pretty confident of getting another job quickly if yours ends. So with that confidence, and two people pulling in 6 figures, I guess I can see how people could get in the habit of treating money like it grows on trees.
two people pulling in 6 figures
Most still don’t. I pull a low end of six figure in a flyover country and median salary for similar position and experience only goes up by 10 to 20 thousands in SV.
Right. But two people making 120+k and feeling like they will always make at least that much are probably going to feel pretty comfortable bidding 700k or so on a house. Boggles my mind, but I can see how they could get into that mindset.
Check the median household income of SV area, it’s still below 120K.
I assume those aren’t the people bidding up housing prices though. Probably only takes 20-30% of the population or maybe even less to make things crazy.
The median price doesn’t have to be anywhere close to the median household income. It should be near the median household income of the people who are purchasing in the area. If the people already in place bought when prices were half or a third of what they are now, well, unless they treated their houses as ATMs, it doesn’t matter much.
“But two people making 120+k and feeling like they will always make at least that much…”
Your point is taken, and my wife and I are in a similar position to yours (don’t have two of those $100K+ incomes to instill confidence in buying at the $700K+ level).
That said, the median household income in San Diego county is far lower — recently under $60K.
“The median price doesn’t have to be anywhere close to the median household income.”
Especially when down payment requirements are minimal.
Rehberg blames housing bust on US government - despite past support for low down-payment act
MATT GOURAS Associated Press
July 04, 2012 - 2:17 pm EDT
HELENA, Mont. — One of U.S. Rep. Denny Rehberg’s talking points on the campaign trail has been to blame the housing crash on the federal government for making it too easy to get credit.
But the six-term Republican himself once backed legislation to help people get into loans even if they didn’t have enough money for a down payment.
Rehberg has repeatedly referred to the problems with mortgage giants Fannie Mae and Freddie Mac as he challenges incumbent U.S. Sen. Jon Tester, a Democrat. Rehberg often criticizes U.S. government rules that he says forced lenders to take bad loans.
And at the first debate between with Tester, Rehberg went further and said bankers, builders and consumers were not the problem.
“They were sucked into something believing that the government told them, that they can get something for nothing, that they can buy a home for zero down and zero interest, that they can keep doing that,” Rehberg said.
But during the Bush administration, Rehberg supported congressional plans to make it easier for people to get homes with less money down.
…
The median price doesn’t have to be anywhere close to the median household income. It should be near the median household income of the people who are purchasing in the area. If the people already in place bought when prices were half or a third of what they are now, well, unless they treated their houses as ATMs, it doesn’t matter much.
This was the reason we left California. It really sucked that people who made less than we did had a much nicer house than we had because they bought theirs when they were still cheap. It really got old hearing people bragging how they paid 40K for their house in the late 70’s and now it was worth 300K (this was in the early 90’s). I also know a few people who bought a silly valley house in the 300K range back in the late 90’s. I don’t even want to think what they could sell those for today.
“It really sucked that people who made less than we did had a much nicer house than we had because they bought theirs when they were still cheap. It really got old hearing people bragging how they paid 40K for their house in the late 70’s and now it was worth 300K (this was in the early 90’s).”
How would it make you feel to see people who thought they would be able to sell for close to $2 million lower their asking price by $400K, yet still receive no offers after having the home on the market for over a year? This is my current experience — the Schadenfreude flip side of the house proud owner bragging rights you witnessed.
“I’ve heard that if you work in tech out there you can be pretty confident of getting another job quickly if yours ends. ”
As long as you are under age 40.
DennisN! Good to see your post! I haven’t been the most reg’lar reader by a long shot, but I missed seeing your name. Glad to see it again.
How are things in Boise?
Some of what you say I agree. Among the engineers I know and have known, none gamble. Not the blacks, not the Hispanics, not the whites. But some of the Asians I know make monthly trips to Vegas and gamble (and go boozing).
Maybe their purported racial mathematic superpowers have probability as their kryptonite.
“I know an asian lady down the street who bought in 2010 what was over a Million dollar peak boom for $800K and the house is now in the high $400K and she laments the bank won’t refi the loan. Two more Chinese women in the Carmel-Monterey bought (one pre-bust and one in 2010); both are underwater by over $200K.”
I simply refuse to compete with stupid people who are willing to overpay at a price which leaves them immediately underwater.
If the market ever runs out of buyers armed with buckets of money and boxes of stupid, I might some day take another look at buying a home.
More homes on market in region
Central Oregon’s median sales prices still rising
By David Fisher / The Bulletin
Published: August 11. 2006 4:00AM PST
…
Sellers react
It’s hard to tell how sellers will react to the upwelling of inventory, Foster noted. Some are selling because they have to sell. Others are just testing the waters at intentionally high prices, trying to see whether a buyer “with a bucket of money and a box of stupid” will show up to pay too much.
Some will slash their prices far enough to create some good deals, he said. Some will convert their properties to rentals, rather than trying to flip them for a short-term sale. Others will simply pull their properties off the market, or let their listings expire, until the market strengthens.
And some will get something close to what they’re asking for, with a little normal dickering.
“I’m telling my agents they need to be looking really hard at any offer they get at this point,” Berger said.
Despite the glut, there’s still movement in the market.
Stevi Hjertstedt scurried to get out of her Foxborough home in southeast Bend Wednesday morning before a Realtor showed up with some prospective buyers.
The 1,427-square-foot house is listed for $309,900. The Hjert-stedts paid $185,400 for it when they bought it in 2004, according to county records, but they’re not shooting for the quick profit - they’re moving to Grand Forks, N.D., because Pieter Hjertstedt, who works for Burlington Northern Santa Fe Railroad, got transferred and promoted.
The asking price, if they get anywhere near it, will buy them a bigger house in North Dakota with an extra bedroom, Stevi Hjertstedt said - the flip side of the sticker shock they faced when they bought their Fox- borough place in 2004.
“When we bought two years ago, we thought it was outrageous,” she said. “But when they told us what they were going to list this house for I was shocked. I said, ‘We’re stealing.’ But, you know? It’s priced appropriately for the market.”
As in most Bend neighborhoods, she’s competing with some investors and speculators who are also trying to get out.
A bigger house one street over, bought by an Oakland, Calif., resident in 2001 for $213,746, according to county records, is listed at $348,900 - price reduced. Another, owned by a Bend investor, is priced at $298,000 - up 68.6 percent from the $207,000 purchase price in February 2005.
David Staley, a full-time real estate investor and currency trader, said he’s trying to get around the inventory glut by going direct to the buyer. He and his wife are planning to auction their investment house and an empty lot at 947 N.E. Purcell Blvd. to the highest bidder this weekend after a pair of Saturday and Sunday open houses.
Staley picked up the house last year in a tax-free property exchange deal. He carved the lot off the home’s property, opening room for a new buyer to build a second house.
The auction, Staley said, “just seemed like a good way to sell it quick. We really didn’t figure we needed to get the maximum profit out of it.”
…
If the market ever runs out of buyers armed with buckets of money and boxes of stupid, I might some day take another look at buying a home.
+1
I don’t think it’s a race thing. It’s a new immigrant thing. New immigrants believe the government and realtor propaganda more so than the natives because in their mind they still think US is a country of rule of law and people on TV (authority) tell the truth here. Black people exactly know about white man’s rule of law, asians and most Immigrants don’t. They are just gullible. Keeping up with Joneses also plays a big part, too.
This is not to be taken as racist but asian people in this area seem to gamble a lot and when they see prices going up greed seems to get the best of them (not all of them).
You should see them in Macao. There’s some hardcore Asian gambling going on there. They make American gamblers look like wimps.
Macao has four times the gambling revenue of Las Vegas.
I would assume the revenue is related to the number of people and the current growth in asia?
See that folks? It’s hopeless. Either sign up for your slavery or live in a refrigerator box in the South Bronx.
Works for people who can get a job they want somewhere else. Not an option for all of us.
Or rent. Rent is usually far cheaper than owning in the coastal parts of L.A. or Orange County. And you have the added feature of lots of high tech jobs in a sixty mile radius. You can finish a lease and move to where your next job is. But breaking a lease could still be economically better than commuting long distance through the end of the lease.
Life is easier than people think. Financial obligations are traps. For the single childless, pet less professionals who rent, these high unemployment times are bad times for OTHERS.
Or rent.
……. ding ding ding…. we’ve got a winner!
“Rent is usually far cheaper than owning in the coastal parts of L.A. or Orange County.”
The thinking (?) in many of these places - especially those places located right on the beach - is that the investment returns will be huge and will be generated by capital gains rather than from rental income and hence the income from rents are a minor consideration compared to the massive and almost guranteed capital gain the investor is sure to get and thus it is reasonable (choke) for a landlord to expect to endure extensive negative cash flow by keeping rents well below costs.
But in depressed areas inland - such as Compton - a landlord will depend on rents to make his living rather than capital gains, but there he has to be very selective as to who to choose as tenants. And this - the selection of tenants - is THE KEY to becoming a successful landlord in Compton.
One is good at selecting tenants in Compton because he/she generally KNOWS the tenants, UNDERSTANDS the tenants, CAN WORK WITH the tenants. This is something a landlord who lives there can readily do but is difficult for an absent landlord to do. And this is why those financial entities that garner up a lot of investor money (OPM) and plunk it down on an apartment house in places such as Compton are going to lose their A$$es.
“And this is why those financial entities that garner up a lot of investor money (OPM) and plunk it down on an apartment house in places such as Compton are going to lose their A$$es.”
And after they do so, they will lack the means or motivation to pay for maintenance and repairs, which will result in the death spiral of their rental investment properties into slumlord tenement housing.
In the beach areas of southern California such as Santa Monica, MB, HB, RB, torrance, Belmont heights/ shore, seal beach etc. most of the landlords have owned the houses for over 20 years. A large percentage of them do not have a mortgage (the exception is when they buy other buildings…) so these places are cash flow positive. Most here recognize that getting that cash flow is a great thing in this low interest rate regime.
Obviously, when you have less turnover with good tenants it is overall a good thing for the landlord.
In the beach areas of southern California
Which is what percentage of total housing inventory in the US?
“Housing is Cratering” - your question may be relevant for the macro real estate bubble, but being a smart consumer in the beach cities as well as perhaps Manhattan, Boston, San Francisco and perhaps San Diego means renting is a much more financially savvy approach.
Although I talked a girlfriend from Culver City out of buying a house in a red state she is totally unfamiliar with. She was going to use the reasoning that many fools used: Buy where house prices are cheap even if they are thousands of miles away. Guess what? The houses are normally priced cheap because of many factors. And those factors will make them STAY cheap: Climate, lack of jobs, lack of quality schools, and so on.
The renter is king. I suppose the long time owners of the beach rentals are kings too. The pawns are inland mortgage payers.
The renter is king. I suppose the long time owners of the beach rentals are kings too. The pawns are inland mortgage payers.
And I think that summarizes the reality of housing. If you want the beach, you go rent it like we’re doing this week. I’m more than happy to get a piece of the ocean once a year for a small fee as compared to the crushing price of owning it.
The reality is, you and I share the same ability to write a check for housing. No banks, no mortgage pimps, nada. Yet I choose not to because I value my bank account more than a depreciating liability. Besides, I already have a depreciating asset bleeding me dry in taxes in maintenance.
Great point! Ain’t freedom via renting great?!!!
Ben, this article shows the populace in general has learned nothing since 2008. It’s like the parent who scolds one child, Cathy, in front of siblings in the room for unacceptable behavior only to have another sibling, Ken, do the same act a week later. When questioning Ken as to why he did it his reply is ‘Well I thought that only referred to Cathy’.
Greed is alive and well and the RE spin of a bottom in RE seems to be working quite well; that is until it doesn’t.
I don’t have any way to answer the question posed. I know what my parents paid for the house I grew up in. I couldn’t buy a nice car for that price now, so that point of reference is useless. I know that when I started looking around here just a little (reading the postcards that came in the mail, not tossing them unread) in 2007, that what they wanted for a place that I wasn’t even sure I wanted was way too much. I know what I can afford each month, but I know that with rates historically low that the price is too high using that metric. I know that until I think the shadow inventory is released (whether it happens in a way that pushes down prices a lot in my area or not) that there is no such thing as a market price that reflects the supply. Similarly, I know that until lending reflects standards that private capital would require to lend willingly, there is not such thing as a market price that reflects the real demand (that being desire plus ability to pay cash or borrow in a way that people will also be able to borrow in the future).
So seriously? How do you even begin to answer the question?
“I know what my parents paid for the house I grew up in. I couldn’t buy a nice car for that price now, so that point of reference is useless.”
Same here! But interestingly, you could currently find cars priced over the current market value of my parent’s home.
The answer is different depending on the person.
If you are an all-cash owner, retired, and trading from one house to another in the same market, price is (almost–taxes) irrelevant.
If you know you need to sell and move within the next 12 months, almost no price is low enough.
And then there is everything in between.
Pay no attention to the grossly inflated price folks. Nevermind the fact it can and is frequently built new for less.
Say RentalPimp…. When are you going to be truthful with the public?
I’m starting to get loan offer postcards again. And, not to worry, HBB-ers, I promptly recycle them.
Seeing the whole “bidding war” scenario play out again this soon after the bust, I now realize people have learned nothing. In fact, I would be willing to bet that many of those who lost their house to foreclosure would go do the very same thing again.
There will be a bounce after every step down, all the way to the bottom.
Exactly Blue.
Yet the Housing pimps(realtors, specu-debtors, mortgage pimps) misrepresent this seasonality as a fundamental change in direction of prices.
How many more destroyed lives result from the lies of these scumbags?
Grizzly
I hear ya. We call them “sheeples” for a reason. Total disregard for economic reality, and herded by the REIC. And we are their opposing bidders for a simple shack in So Ca.
Sheeple: An animal that is regulary and repeatidly sheared and sheared until it cannot be sheared any furthur.
Then it gets skinned.
About those “Dockominiums.” those people don’t realize they buy a huge financial burden because they emotionally are attached to a smaller but substantial financial burden: a boat.
It is like saying “I like owning a home because I can paint the walls any color I like.” I see that a lot still in Phoenix City-Data.
I always enjoy driving across the California desert between Palm Springs and Phoenix. It looks like permanent prosperity. Hundreds of $50,000 gas-guzzling rigs towing a ORV’s or a boat toward/from the Colorado River. During the BRAC years in the early nineties with military bases closing and a real estate collapse, same thing. You wouldn’t have known if the southland had a recession.
By November 1 we will get a clear idea of whether huge defense cuts will start to happen. By law, layoff notices must go out 60 days before the layoffs happen. I read that some 200,000 California jobs will disappear next year. 50,000 Arizona jobs will disappear. They must do this in a nine month period (I read that somewhere). CBO thinks the cuts can be done without severely affecting the economy. It merely takes government spending back to 2006 levels. And that was big government back then!
It will be interesting to see the state of the road trippers during the cooler weather months across the desert this Fall and in the winter. I rarely drive across in the summer months these days.
Bottom callers take a stand in China:
Rosa Trieu, Forbes Staff
7/18/2012 @ 5:45AM
China Housing Prices May Have Bottomed Out
Housing prices in metropolitan cities like Beijing, Shanghai and Guangzhou increased in June compared to the previous month. (Image credit: Getty Images AsiaPac via @daylife)
China’s housing prices appear to be bottoming out after an 8-month decline, according to data released Wednesday by the National Bureau of Statistics for the month of June.
Of the 70 cities tracked by the bureau, the report shows house prices declined in 21, stayed flat in 24 and increased in 25, compared to the previous month. House price increases occurred in metropolitan cities like Beijing, Shanghai and Guangzhou, led by Hangzhou, which posted a modest increase of 0.6%.
Senior Statistician Ma Xiaoming said the sales price decrease indicates that, after arduous and unremitting efforts, the momentum of housing prices in general have been effectively curbed, and achieved remarkable results in the real estate regulation.
Beijing has been taking steps to stimulate the economy amid two consecutive quarters of slowing growth. The People’s Bank of China cut interest rates twice within a month and lowered borrowing costs. However, officials remain wary of reigniting the housing bubble that could spark social unrest.
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I find it quite amazing that bid wars are resurgent in U.S. housing markets, even as Western nation stock markets get repeatedly hammered by the Eurozone debt crisis.
Has the U.S. housing market decoupled from the rest of the globalized economy?
Canada stocks sink on renewed Euro zone concerns
July 20, 2012|Sarah Pringle, MarketWatch
SAN FRANCISCO (MarketWatch) – Canadian stocks ended a five day rally Friday amid the release of June inflation and consumer price index data, as wariness surrounding the Euro zone resurfaced.
“U.S. stocks, crude oil, European stocks, and Canadian [stocks] have consolidated recent gains today, partly due to a pick-up in European stress… as a realization of the fiscal difficulties facing Spain filtered through the market,” said Fergal Smith, market strategist at ActionEconomics.
The S&P/TSX benchmark index fell 42.79 points, or 0.37%, to settle at 11,622.91, as a 2% slide by metals and mining stocks and 1.5% decline in the information technology sector led percentage decliners.
Retreats in Canada lagged those seen on Wall Street, where the S&P 500 (US:SPX) and Dow Jones Industrial Average (US:DJIA) saw even greater losses, but still managed to remain positive on the week. Canada’s benchmark equities index also held on, lifting almost 1% since Monday.
“More broadly the market has been able to grind higher partly because of earnings releases, better than had been feared. That, and increased momentum toward quantitative easing in the U.S.,” said Smith.
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“I find it quite amazing that bid wars are resurgent in U.S. housing markets”
FWIW, it’s not across the board this time. Even in “hot” metro areas some nabes are hot while others are ice cold.
But you have to hand it to the banksters, withholding inventory has accomplished what none of us here thought was possible a few years ago: the return of bidding wars.
It wasn’t just withholding inventory that got it done; the banksters also had to hardwire a massive influx of tax dollars, at a price tag of billions in ongoing losses, into federally guaranteed lending through FHA, Fannie Mae and Freddie Mac.
Look out, banksta, mortgage demons gonna gitcha!
RE: “Bank of America argues that when borrowers have made payments for two years or more, it is hard to fault the bank’s underwriting instead of, for example, the state of the economy.”
If a loan can’t survive on its own two feet for two years, then the bank should never have made it. BOA can eat the losses on these two-year-out failures, which clearly reflect subprime underwriting standards without an adequate risk premium to cover the poor loan quality.
These problems would largely go away over night if Megabank, Inc’s mortgage lending operations were broken up to a scale which served local communities instead of Wall Street and K Street. Competition doesn’t happen in a financial sector dominated by blubbery whales.
U.S. banks haunted by mortgage demons that won’t go away
July 19, 2012 | By Rick Rothacker | Reuters
(Reuters) - Lenders like Bank of America Corp and Wells Fargo & Co say they are facing mounting pressure to buy back bad mortgages they sold to investors, signaling that banks’ home-loan headaches could continue for years.
Investors like Fannie Mae and Freddie Mac have been pressing banks to buy back bad mortgages for years, but in recent months those requests have intensified, the banks have said in recent second-quarter earnings reports.
These comments from banks provide a fresh reminder of the loose ends that remain from the housing bust that started five years ago. The threat of new expenses and litigation is dampening bank share prices, and the problem could linger for some time, analysts and experts said.
“This is not done yet,” said Paul Miller, analyst with FBR Capital Markets. “There will be continued surprises in the industry.”
The most pain will likely be felt by Bank of America, which said on Wednesday its total outstanding claims from investors surged more than 40 percent to about $22 billion in the second quarter. The bank’s shares fell nearly 5 percent as investors worried about future losses and dropped again on Thursday.
At a time of low interest rates, U.S. banks are making many new loans to borrowers buying homes and refinancing, but anxiety about the costs of old loans is overshadowing some of this success.
During the housing boom in the last decade, banks parceled billions of dollars of loans into highly-structured residential mortgage-backed securities they then sold off to investors. The buyers of these loans included the now-government controlled agencies Fannie Mae and Freddie Mac, as well as private investors.
When selling the mortgages, banks made promises or “representations and warranties” about the loans. Investors can ask banks to buy back soured mortgages if these promises were evidently broken, for reasons such as poor underwriting, insufficient verification of income or other documentation errors.
Banks have fought some of these claims, but most lenders still expect to have to buy back many of the mortgages.
Bank of America, the second-largest U.S. bank, faces the biggest threat from repurchase requests because in 2008 it bought subprime lender Countrywide Financial, a major producer of toxic loans during the housing boom. Its mortgage unit has posted more than $30 billion of losses since the beginning of 2010.
About half of the bank’s claims are from Fannie Mae and Freddie Mac, which were placed in government conservatorship in 2008 as their loan losses ballooned.
Tensions are so high between Bank of America and Fannie Mae that the bank stopped selling some loans to the agency in February. According to a securities filing, Bank of America had the most outstanding repurchase requests with Fannie as of March 31 - $7.1 billion, or 58 percent of outstanding claims.
The bank, in its earnings presentation, said Fannie Mae’s repurchase standards have been changing and differ from the bank’s interpretation of its contracts. The bank, for example, has noted an increase in claims on loans in which the borrowers have made payments for at least two years.
Bank of America argues that when borrowers have made payments for two years or more, it is hard to fault the bank’s underwriting instead of, for example, the state of the economy.
Fannie Mae and Freddie Mac said they are looking out for U.S. taxpayers in making their claims. Fannie, for example, has said it may need more funds from the U.S. Treasury if it collects less than expected from Bank of America.
“Under our contracts, lenders are required to repurchase loans that are delivered to Fannie Mae but do not meet our standards,” Fannie spokesman Andrew Wilson said. “We pursue repurchases in order to minimize losses and protect the interest of taxpayers.”
Freddie Mac doesn’t think taxpayers should have to pay for ineligible loans sold to the agency, said spokesman Michael Cosgrove. The top three reasons for Freddie claims against banks are problems with borrowers’ income, loans that don’t meet the bank’s automated underwriting standards and problems with collateral or appraisals, he said. Freddie does not disclose claims by each bank.
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Lenders like Bank of America Corp and Wells Fargo & Co say they are facing mounting pressure to buy back bad mortgages they sold to investors, signaling that banks’ home-loan headaches could continue for years.
Couldn’t happen to a nicer couple of banks.
Today’s bidding wars are tomorrow’s bulk sales of thousands of delinquent federally-guaranteed subprime loans. The U.S. mortgage lending system at this point is an ongoing federally-engineered financial disaster, to serve the unannounced purpose of propping up home prices that otherwise might reach affordable levels.
U.S. widens bulk home loan sales program
WASHINGTON | Wed Jul 18, 2012 2:11pm EDT
(Reuters) - The U.S. Federal Housing Administration said on Wednesday that it would start taking bids from investors for a program intended to sell off thousands of delinquent home loans, as it is almost doubling an offering first announced last month.
The FHA, which protects lenders against borrower defaults, said it would take applications for 9,000 mortgages that are scheduled for bulk sale as early as September, up from the original goal of selling 5,000.
A majority of the loans are located in four metropolitan areas hit particularly hard by the housing boom and bust: Chicago; Phoenix; Tampa, Florida; and Newark, New Jersey.
More than 710,000 FHA-backed mortgages are in default, or about 9 percent of the loans the agency insures. In all, it backs an estimated $1.1 trillion in mortgages.
In June, the U.S. Department of Housing and Urban Development, which oversees the agency, announced plans to offer up thousands of severely delinquent FHA loans to protect its dwindling capital and improve the chances that more troubled borrowers avoid foreclosure.
“FHA not only avoids the costs associated with a long foreclosure process, but also the high costs of maintaining and selling vacant properties in already distressed markets,” Acting FHA Commissioner Carol Galante said in a statement.
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The rent vs. own has been fun to read over the past month or so as several hardliners on both sides dig in.There will always be those that wish to rent or those who the need to own depending on financial, work or related conditions such as near family or medical centers, etc. Let’s assume for discussion purposes that those who wish to buy do their due diligence and buy, like Oxide and a few others. What interests me, directed at those who bought, is why did you buy (as an investment is not an acceptable answer)? What interests me, directed at those who hope to buy, is what are your expectations when you are looking to buy and what expectations are you willing to forego just to nail down a piece of property? And to both groups I ask to what lengths are you willing to go or spend to make your house purchase into a home?
I think that we can all agree that we have to live somewhere (rent vs. ownership) but the disagreement comes in when some (rent side) try to equate ownership merely into extra maintenance costs vs buying a life style. Extra maintenance costs in the first instance imply you are buying for investment while the second implies adding control to your environment (a retreat from the pressures of work, etc) without having to travel , buy a second home, etc. Thoughts anyone?
If I find a place where I am sure I want to stay put, and the price is right, I’ll buy it.
It’s amazing to me how people who have never lived in an area, but decide to relocate, start shopping for a place to buy right off the bat. At least, that’s the impression I’m getting by reading the Western North Carolina board at City Data.
Best advice I’ve ever heard is to rent first, get to know an area, then buy. Too many things can go wrong if you choose a location that later turns out not to be so great. There’s also the neighbor factor, what if you get the neighbors from hell? Any thoughts on how to avoid this?
I’ve been a renter since 2005, when the ex and I sold our house at peak. The first two places I rented after the sale were horror shows. I liked the third place, but got tossed because one of the neighbors started a fire. The fourth place was pretty nice, but then some neighbors moved in next door who blew chunks. Next place was so-so. I like where I’m living now, and probably could stay here for a few years. The owners are decent folks who are out of town, pretty much live and let live, and if something needs fixed, I check with them, get permission, pay for it and take it out of the rent. It’s not a bad arrangement.
But I confess I’m giving some thought about finding that final (earthly) abode. Like to settle down somewhere I know I’d want to stay for the duration. I’m looking at this as a two year project, to find that place. The thing about renting is, you never know when you might find yourself out on your posterior, for whatever reason. My LLs could decide to sell the place. Or they could, God forbid, get sick or injured or pass away and their children might wish to sell. Then what?
There’s also the neighbor factor, what if you get the neighbors from hell? Any thoughts on how to avoid this?
Well, I’ve thought about various ways of handling my neighbors from hell. Let’s just say that they’re still alive because it’s illegal to kill them.
Food for thought: An individual is not distinct from his place. He is his place - Gabriel Marcel.
I bought because I want a paid off house by the time I retire.
I believe that a paid-off house is one of the best retirement plans out there. There are three ways to achieve this goal: (1) 30-year mortgage now; (2) save and buy outright in 25 years, (3) wait for cratering prices and accelerate payment. The second option is actually impossible. Given rising rents, there is no way to save enough to buy anything outright, even in 25 years in Oil City. The third option is tempting, but I don’t believe it’s a viable option. I don’t believe that prices will crater, and if they do, I would have spent so much rent waiting that it would not be worth it.
I’ll probably put considerable money into the house I bought. I don’t intend to go HGTV trendy, but I want my own home, not the bare maintenance bestowed upon me by the landlord, or the previous owner’s second-to-lowest price at Home Despot. If I recover even half of the renovation costs at selling, I will be happy.
If I recover even half of the renovation costs at selling
Why did you buy it and dump a bunch more money into it if you’re going to sell it?
I’m not planning on selling the house anytime soon. But unlike you, RAL, I have the wisdom to think of other possibilities. One possibility is that I will not be able to afford property taxes on a fixed income. In that case I will sell when I’m 65-70 and move to a small Oil City house with a nice cash cushion. Or god forbid I become disable and need to move to assisted living. Or I get sick and need to live in a different climate. Or some prince from a foreign land takes me as his concubine. Or whatever. But if for any reason this is not the toe tag house, I would like to recover some of the reno costs.
Yep. That same wisdom led you to rent from the bank at 2x the cost.
Good job.
Plan 1.5 is to buy something with a 15 year loan. That way you are actually paying down the pricipal and have equity if you need it for repairs.
“save and buy outright….is actually impossible.”
The impossible is possibly just beyond one’s field of view.
It is impossible for many to concieve of buying outright a car or even a television, because one would have to live a meaner lifestyle for a while until having the actual resources to buy. The depression era jab at this way of thinking was “I’ll gladly pay you Tuesday for a hamburger today.”
It is ironic that one unable to save $1000 a month by living like a poorer person, can afford $1000 a month in debt service, and even another $1000 a month in depreciating enhancements, if only allowed to live in the facade of means.
Having traveled that road, I can say that at the other end, one sees that one was actually the concubine of the banks all along, a subtle realization of fantasy perhaps.
Whatever. I ran my own calculations using actual rents and actual prices, not some HBB fantasy land where rent is $1000 less than PITI. I found the following options:
1. Live a “meaner” lifestyle by renting a 1-bed apartment for upwards of 30 years, praying that my rent doesn’t go up much. End result after 25 years: buy a small Oil City House if I’m lucky.
2. Live in a house for upwards of 30 years, knowing that my payment will not go up at all ever. End result after 25 years: own a house outright that’s worth about 3 times as much. I can stay there, or sell and have a nicer cash cushion. And I skipped over the meaner lifestyle.
It took you 20-30 years to realize you were the concubine of the banks? Excellent; that gives me hope. As a renter, it took me less than one year to realize I was the concubine of the landlord, and that landlord made sure I knew it, every day.
“Excellent; that gives me hope.”
Not sure what you are hoping for in that context, but no, it didn’t take me 30 years to figure out that the ponzi game you are cheerleading was a scam.
I question this assertion (that saving to buy is impossible) as well.
Is it impossible for a person living in the DC area who insists on “good” neighborhood and who is living on lucky ducky wages? Yes, of course. But for a federal research scientist who doesn’t even have to locate herself to make it easy to commute into the city? Sorry. I don’t see it.
I wasn’t totally broke when I moved to DC but I had been out of work for a while and my savings were nothing to write home about (and all needed for a standard living expenses cushion). I could have $275K saved (what oxide has implied she spent) plus an emergency fund in another 5 years - so total of 12 to 13 years. And I live in a very, very nice area with a quite reasonable lifestyle while maxing out 401(k) and Roth contributions.
Maybe oxide is a much lower level scientist than I have always assumed. That would explain why she says she can’t save while renting the type of housing she prefers. I still don’t have an issue with buying if you want to. If you actually like yard work and gardening and home decorating, then it could be worth spending more to be able to indulge in your hobbies for those extra years. Choosing which hobbies to spend on is something all of us do. I just think it should be done with eyes open, not closed.
Polly, when I said it was impossible to “save,” I was talking about stashing away the difference between rent and buying. And trying to buy an Oil City house only on 25 years’ difference between rent and PITI.
If I were frugal, and put almost all of my leftover income toward a house fund, yes, I probably could put away $275K in 12 years. But to me, this calculation is not quite relevant. If my PITI is the same as my rent, then I should be able to pay the equity on the house AND put away $275K as well. I would be in the same position as a renter.
I must be very unlucky in my apartment complexes, because I can’t seem to find any good ones that for reasonable rent. Even if I did, the rents will catch up with my PITI within those same 12 years.
OK, so your PITI is way more than rent. It took a long time to tease this out.
You are betting on rents going up, up, up and your PITI will stay the same. In a decade you will be even PITI vs rent. And the soaring price of real estate will make you wealthy, all through the miracle of debt financing. Livin large, go for it.
Ron, I came back to town after college, got my first job, and was looking for a place to rent. $160 for a really dumpy 2 br in the student ghetto. Then I took my friend over to see a little neighborhood I’d always admired and there was the for sale sign. $3500 and take over the loan of $82 a month. What’s not to love? Plus it has a view of the river. Weren’t we going to talk about views? Sure it needed upgrading and maintenance but that became my hobby.
3 years earlier I had walked into an abandoned victorian house in the student ghetto and it hit me like a ton of bricks that I had found my calling and wanted to fix up old houses. I first had to graduate college because that was expected of me.
It’s not rational - there are no deliberations. I buy houses when they catch my eye and are so cheap I can’t justify not buying them. I don’t go looking for them, just stumble across them. I have radar for abandoned houses. Something goes “ping” - sometimes before I even know the house is for sale. Of course this was 20 - 35 years ago, long before the housing bubble.
I’m not here trying to convince anyone to buy, BTW. I just find this blog a great source of information about real estate and economics. But Ron asked and I answered.
Well done, LL. Sometimes these things just speak to us, neh?
“Sometimes these things just speak to us,”
Localandlord is lucky, at least it was an old house talking to him. I remember about 30 years ago this dude had a dog talking to him.
“Sometimes these things just speak to us, neh?”
Oh, they do. Sometimes houses yell at me. But I have reached the point of Enough, so I plug up my ears.
That’s interesting as most people find remodeling to be very hard work. I have found that when you start into a project you quickly can tell the difference between what work was done by a contractor (assuming a good one here) vs what was done later by the property owner turned do-it-yourselfer. Currently I find it is hard to get quality parts, not because of cost but because no one wants to stock them and not have them jump off the shelf. Glad that I can shop on-line.
Sounds as though you get enjoyment out of your work.
I am not on either “team” on this issue, but my wife and I did buy a house last year. If you asked me 5 yrs ago, I would never, ever have thought we’d buy a house. I could tell that prices were ridiculous and I was seeing the cracks in the economy that were starting to leak.
We are 30 y/o, 2 income couple with stable jobs and no kids. Along the way of our relationship, we realized we want one kid and we value privacy and stability a lot. We started looking at houses at the beginning of 2010, didn’t buy until the spring of 2011. When we started looking we were skeptical we’d find anything worth buying. And we mostly didn’t. We wanted a house with classic features and solid construction, but where the seller was realistic about price conditions. Basically, we wanted a house that was durable and strong, but was “ugly”. My father and law and I could do most of the work and we know a lot of tradesmen because our community is very close (Greek).
We found one house worth buying. Out of at least 50 we saw. (And out of 100s we researched via Redfin, Zillow and Maryland state/Baltimore city property records.) While we were researching, I absorbed all the finer points of how property taxes work in Maryland, how to find out if a house had permits pulled for upgrades, how the city’s school system is organized, etc. WHen we saw our current house, its price had dropped from 225k to 175k in the 6 months it had been on market. We got them to knock another 25k off and throw in all the tools that were in the garage and all the furniture that was in the house (some ended up getting sold on Craigslist, but some of it became key pieces in our house). The old man had just died and he and his wife and lived in the house since it was built in 1951. They had no kids and the place was in amazing condition, but “ugly”, like they hadn’t redecorated since the 80s. Velour wallpaper, bright blue or yellow rooms, appliances were older than my wife and I, etc. A yr later, on a very light budget, we’ve nearly done the whole thing over at a very manageable cost. And we have everything organized–lots of storage, rooms have a nice flow, and the house really adds to our lives and what we’re able to get done. I do have to admit, at times it caused a lot of stress and disagreements.
Why we bought instead of renting:
- close to her family, which is large and mostly lives local, especially her parents who live 2 minutes away
- close to both our jobs. 2 minutes to her job (she’s a teacher), 15 minutes to my job
- we can live in this house with 1 car and can keep the mileage down
-house has a 2 car garage and off-street parking. very rare, because we are in the city. 90% of the housing in our area is rowhomes/townhomes/duplex. and of the SFH’s, very few have large garages. i can’t think of any that are set up as well as ours is.
- we bought a 2200 sq ft home for about $70/sq ft. Garage not included in sq footage. house is brick with plaster walls and real wood floors (oak) throughout. main bathroom is huge, with walk in shower with glass doors, kitchen has beautiful wood cabinets and granite countertops. the new houses around here are balloon construction and are attached product. and if they have the nice touches this place has, they sell for much more, even though they are townhouses. i laugh at people who buy these.
- we want to live in this house a very long time. i can’t say if it will be toe-tag, but that is only because 40 yrs from now when we retire, the world may be very different. however, i doubt we’ll move during our working lives.
- both of us HATE moving, with a passion. the inefficiency of moving, the costs of moving, the labor associated with moving. no thanks!
- both of us value routine and convenience. when you move to an area, it takes a while to settle in. and to organize all your stuff. i’m just not a person who excels unless i feel comfortable. here, i have everything super-organized and i know exactly what i’m doing.
- very, very few SFH for rent here. and the rents are high-yes, probably about $200 more than our PITI is now. and the properties are generally gross. i’m not going to clean and fix up someone else’s property so i can feel comfortable and organized.
- our PITI is a joke, it is about 20% of our after-tax income. the purchase price for our house was approx 1.2x our incomes. and our incomes will increase over time. we’re both just taking off in our careers now and we work hard.
- buying a house (and so cheaply) has changed my mindset so that I rarely ever think or worry about my own personal housing situation. i still follow the housing situation because i’m a lawyer that represents banks and Freddie Mac and i find it absurd and disgusting at what these places did to the housing market. however, i personally basically never worry about the price of my own house or how it will affect my life. it’s essentially a non-factor in my life, other than the fixing and decorating and organizing we did early on.
- government programs played a very small factor in our buying a house. the state of maryland and baltimore city offered a little over $10k in forgivable loans (treated as a loan that is canceled if you live in the house 5 yrs). we didnt need these programs, but we were not too proud to use them, as my wife is a public employee (teacher) and this is a benefit she has earned.
- mortgage rates had almost no effect on our decision. our rate is 4.00%, which is nice because it keeps PITI low, but it was not a factor in our decision. even if we were going to sell and move in 5 yrs or 10 yrs, if the interest rates then are higher, it would mean we’d get less for the house. so interest rate is mostly a wash for us. only sheeple would get sucked in by low rates. and, like i’ve said previously, we’re not thinking about selling.
- this house is near a new subway line that will run downtown where the courts are and where i work. which means we can conceivably remain a 1 car family and we don’t have to get killed by commuting time. the subway won’t be finished for another 3-4 yrs, but it’s a nice bonus.
Sounds like you did really well. I like have the grandparents nearby for the eventual child.
Congrats’. Nice window into why some HBBer’s made their choices in buying.
We live in an area that is very underserved with rental properties, to the point where our house (purchased 2009) PITI was very little more than rent for the apartment we had… and to rent a house with the size we’re in would be hundreds more. Ridiculous, but that’s the way it is. And with kids, it’s nice to have an area you can customize how you like. There’s been some chainsaw work on ill-considered landscaping (NB: Plan your tree plantings around how big they *will* get, not how big they are in the pot) and digging up other bad ideas. Inside, we’ve been considering what to do to make up for the odd choices made there. (Flow being one odd choice.)
At any rate, we’re planning on staying here for a goodly long time, because unless my husband gets a major promotion and move (not particularly likely in the near future), there’s no reason to move and the work is steady. We’re both of the “type” to want to stay in one location as long as possible and this location is close to my mom and sisters and within a day’s drive from Evil Rob’s mom and siblings. So really, it made sense all around; financially, stylistically, and for family. There’s a lot of people for whom those considerations require them to rent.
You hit upon one of my pet peeves also, the one about planting not on future size but as a space filler. I hate cutting down mature trees. The house I bought in Bako years ago was over planted because that’s what the landscapers did; it filled the area for the eye and added to their pocket book.
Why are investors so downbeat on Megabank, Inc? Don’t they realize the financial crisis is over and the housing market has bottomed out?
Bloomberg News
Refinancing Seen Peaking Without More Capacity: Mortgages
By Jody Shenn on July 20, 2012
Mortgage-bond investors are betting the U.S. refinancing boom has little growth left, even with rates at record lows and President Barack Obama’s administration taking steps to widen access.
Government-backed mortgage securities reached a record 108.6 cents on the dollar yesterday. Anyone bidding more than face value risks taking a loss if too many of the underlying mortgages get paid off early, so the willingness of buyers to pay those prices shows they expect restrained refinancings.
Efforts by Obama and Federal Reserve Chairman Ben S. Bernanke to help homeowners get cheaper loans and spur the economy have been slowed by lack of staff at lenders and less competition. Refinancings will rise 4.1 percent this year to $894 billion, the Mortgage Bankers Association projected last month, compared with 2003’s record of $2.5 trillion, when former Fed Chairman Alan Greenspan spurred lending to end a recession.
“The only way for things to really change is if lenders add a significant amount of capacity back into the system, and I don’t see that happening over the short term,” said Scott Buchta, the Chicago-based head of mortgage strategy at Sandler O’Neill & Partners LP. “The fear of higher rates has kept the rate of expansion in check.”
Refinancing is also being curtailed as the gap widens between bond yields and new-loan rates, which keeps the cost higher and limits the number of borrowers for whom a new mortgage makes sense.
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Wells Fargo & Co
$33.81 USD
-0.34
-1.01%
Bank of America Corp
$7.07 USD
-0.19
-2.69%
JPMorgan Chase & Co
$33.9 USD
-0.56
-1.65%
Citigroup Inc
$25.87 USD
-0.72
-2.78%
I’m still trying to get people to think aloud more about more than the initial price of the house (assuming that you did your homework before buying). We’ve seen some heated discussions on the buy vs. rent and the union city plan. So:
1). What is the downside of buying near or on the coast? The upside?
2). What is the downside of buying in the desert? Upside?
3). What is the downside of buying in the big city? Upside?
4). What is the downside of buying in fly over country? Upside?
5). What is the downside of buying new vs old? Upside?
6). Everything worth having requires maintenance, where does your tolerance for maintenance say stop. Example for me with a car I’ll do preventive maintenance but I won’t wash it. My wife likes to wash it but won’t or can’t do the maintenance.
7). How many HBB’er’s prefer the city to the country? Big, big city or small town? Country gentry or country rural?
Ben said that for that money he’d buy a ranch. What qualifies as a ranch? Bill LA talks about a austere life style and then if I’m not mistaken talked about some day moving to a place like SLO. SLO is pretty land locked on new development so I ask him what do you expect to get for your money when you purchase (I’m assuming that you buy at the bottom)?
New-ish show in the long line of “reality, look how much money you can make doing X” shows.
Property Wars
Why there’s nothing affordable, anywhere? Maybe these morons, and others like them…