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  • October 5, 2009 at 3:19 PM #16445
    gn
    Participant

    So, I’ve been following the discussion on another thread between the bulls & the bears. The bull camp essentially makes the following points:

    1. The pre-foreclosure data looks much worse than it actually is. That’s because this data includes defaults on second mortgages. Many people intentionally defaulted on the 2nd mortgages only, knowing that the junior lien holders don’t have the legal right to kick them out. At the same time, these same people negotiate with the primary mortgage lender to lower their mortgage payments. So, a significant percentage of the properties that are in default will not end up as REOs.

    2. The government is intervening. Effectively, it lowers the barrier of entry into real estate in the form of lower down payments (3.5% for FHA loans), buying or guaranteeing mortgages to encourage lenders to lend to buyers. I’ve read somewhere that 80% – 90% of mortgages made in 2009 are either made or guaranteed by the government.

    To be fair, the above 2 points are valid. Now, looking forward, there is an issue that’s problematic for real estate: high unemployment. While unemployment is a lagging indicator for the economy, it’s a leading indicator for real estate. That is, high unemployment rates eventually lead to high foreclosure rates & low demand for real estate.

    With that said, here’s a question for the bulls. How do you view the impact of unemployment ?

    October 5, 2009 at 3:37 PM #464040
    Nor-LA-SD-guy
    Participant

    OK I will bite (again these are just my opinions as well).

    Most of the carnage in employment has already occurred, and the Lyon’s share was in Construction/manufacturing maybe a few Mortgage and RE sales people that were most likely not very highly trained workers (four year degree etc..)
    Where you were far more likely to see sub prime and other such things occur.

    So I would assume that sure there are a lot of people underwater but the majority will stick it out or at least attempt a short sale etc…

    October 5, 2009 at 3:37 PM #464230
    Nor-LA-SD-guy
    Participant

    OK I will bite (again these are just my opinions as well).

    Most of the carnage in employment has already occurred, and the Lyon’s share was in Construction/manufacturing maybe a few Mortgage and RE sales people that were most likely not very highly trained workers (four year degree etc..)
    Where you were far more likely to see sub prime and other such things occur.

    So I would assume that sure there are a lot of people underwater but the majority will stick it out or at least attempt a short sale etc…

    October 5, 2009 at 3:37 PM #464579
    Nor-LA-SD-guy
    Participant

    OK I will bite (again these are just my opinions as well).

    Most of the carnage in employment has already occurred, and the Lyon’s share was in Construction/manufacturing maybe a few Mortgage and RE sales people that were most likely not very highly trained workers (four year degree etc..)
    Where you were far more likely to see sub prime and other such things occur.

    So I would assume that sure there are a lot of people underwater but the majority will stick it out or at least attempt a short sale etc…

    October 5, 2009 at 3:37 PM #464650
    Nor-LA-SD-guy
    Participant

    OK I will bite (again these are just my opinions as well).

    Most of the carnage in employment has already occurred, and the Lyon’s share was in Construction/manufacturing maybe a few Mortgage and RE sales people that were most likely not very highly trained workers (four year degree etc..)
    Where you were far more likely to see sub prime and other such things occur.

    So I would assume that sure there are a lot of people underwater but the majority will stick it out or at least attempt a short sale etc…

    October 5, 2009 at 3:37 PM #464855
    Nor-LA-SD-guy
    Participant

    OK I will bite (again these are just my opinions as well).

    Most of the carnage in employment has already occurred, and the Lyon’s share was in Construction/manufacturing maybe a few Mortgage and RE sales people that were most likely not very highly trained workers (four year degree etc..)
    Where you were far more likely to see sub prime and other such things occur.

    So I would assume that sure there are a lot of people underwater but the majority will stick it out or at least attempt a short sale etc…

    October 5, 2009 at 5:39 PM #464113
    sdrealtor
    Participant

    Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.

    October 5, 2009 at 5:39 PM #464302
    sdrealtor
    Participant

    Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.

    October 5, 2009 at 5:39 PM #464652
    sdrealtor
    Participant

    Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.

    October 5, 2009 at 5:39 PM #464721
    sdrealtor
    Participant

    Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.

    October 5, 2009 at 5:39 PM #464927
    sdrealtor
    Participant

    Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.

    October 5, 2009 at 5:52 PM #464118
    Nor-LA-SD-guy
    Participant

    [quote=sdrealtor]Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.[/quote]

    sdr,

    While I have seen the same and it will/may continue for a while yet, it is on a much smaller scale to what happened in the more blue collar area’s than your area. If they can hold on to their Job’s the vast majority will hold onto the house even if they are under water 100 or 200 K.

    Most have a grasp of statistics and know the odd are in their favor as long as they are not going anywhere for the next five to ten years.

    While you may even see 50% off, I would think your going to have to move quick as they will not be on the market long when they do hit.

    October 5, 2009 at 5:52 PM #464307
    Nor-LA-SD-guy
    Participant

    [quote=sdrealtor]Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.[/quote]

    sdr,

    While I have seen the same and it will/may continue for a while yet, it is on a much smaller scale to what happened in the more blue collar area’s than your area. If they can hold on to their Job’s the vast majority will hold onto the house even if they are under water 100 or 200 K.

    Most have a grasp of statistics and know the odd are in their favor as long as they are not going anywhere for the next five to ten years.

    While you may even see 50% off, I would think your going to have to move quick as they will not be on the market long when they do hit.

    October 5, 2009 at 5:52 PM #464657
    Nor-LA-SD-guy
    Participant

    [quote=sdrealtor]Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.[/quote]

    sdr,

    While I have seen the same and it will/may continue for a while yet, it is on a much smaller scale to what happened in the more blue collar area’s than your area. If they can hold on to their Job’s the vast majority will hold onto the house even if they are under water 100 or 200 K.

    Most have a grasp of statistics and know the odd are in their favor as long as they are not going anywhere for the next five to ten years.

    While you may even see 50% off, I would think your going to have to move quick as they will not be on the market long when they do hit.

    October 5, 2009 at 5:52 PM #464727
    Nor-LA-SD-guy
    Participant

    [quote=sdrealtor]Unemployment is what will take the mid to upper mid tier down another leg. I have seen it already in my neck of the woods. Homeowner loses job and has plenty of reserves. Homeowner hangs in about 6 month slooking for a new job. No job found, its time to sell the house before its too late. Time frames may vary but thats what I have seen.[/quote]

    sdr,

    While I have seen the same and it will/may continue for a while yet, it is on a much smaller scale to what happened in the more blue collar area’s than your area. If they can hold on to their Job’s the vast majority will hold onto the house even if they are under water 100 or 200 K.

    Most have a grasp of statistics and know the odd are in their favor as long as they are not going anywhere for the next five to ten years.

    While you may even see 50% off, I would think your going to have to move quick as they will not be on the market long when they do hit.

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