“43% Overpriced”

[kewp]

Are there any similarities with our recession?

Well, the big difference is that debt is much harder (impossible?) to walk away from in Japan. There is really no concept of bankruptcy or foreclosure. The japanese FB’er just shuts all the windows and fires up the charcoal grill.

Its kinda funny, but I think its better for an economy to have lenient debt forgiveness!

If you screw the borrower, they are forced into a life of debt slavery, providing liquidity to the lender. The lender probably isn’t spending this money, more likely he’s either hoarding it or lending it out to someone else. Probably an American buying a yellow hummer with a home equity loan. No good for the local economy.

However, in America, we just toss the keys back to the bank and go back to rentin’ and spendin’!

[Bugs]

The warnings of the -50% correction off peak pricing was always pretty conservative because it only assumed pricing would recede back to, but not pass, the long term trendline. That trendline represents the baseline between the highs and the lows along the way. In order for that trendline to continue to hold as it has over the last 60 years the correction has to pass that baseline and overcorrect. Meaning, home prices in the region have to venture into underpriced terrority relative to the underlying economic fundamentals.

Will the 60-year trendline eventually prove itself to continue on? Nobody can know for sure, although a lot of people will be guessing on it.

Median household income can’t swing the median priced house, but it should be able to swing the average 3/2 townhome/condo or the starter house in a halfway reasonable neighborhood outside the GH-etto.

$60,000 / 3 = $20,000 / 12 = $1,666/month. Call the maintenance costs a wash with the tax writeoff for a 3-person household and it still comes down to a starter home mortgage of about $225,000, which points to a $250,000 sale price with a 90% loan and when including the property tax rates.

That’s at a 6% mortgage interest rate. By the time these lenders book enough losses for the overall price structure to decline that far, I think the prevailing interest rates will be at least 8%, in which case that drops the amount of the loan to about $190,000, meaning a $210,000 point of entry. A return to 10% mortgage interest rates is not completely beyond the realm of reason if you consider how many investors will end up losing their shirts on their past bets.

What with the removal-by-default of the marginal buyers who got ahead of themselves this time, the pool of qualified buyers next time may be small enough to further undercut our inventory. Remember the boomer generation that is retiring during this same time frame and how few of them have the means to retire in place.

At the current rate of change in the pricing and when considering what the next 3 years will bring in resetting ARMs we certainly have enough time for the pricing to recede that far. Whether it will or not is something nobody can know. Remember, in 1998 nobody on this planet could have foreseen how high the pricing was going to get by 2005 and anyone who says differently is a liar.

I need another beer.

[Bugs]

The warnings of the -50% correction off peak pricing was always pretty conservative because it only assumed pricing would recede back to, but not pass, the long term trendline. That trendline represents the baseline between the highs and the lows along the way. In order for that trendline to continue to hold as it has over the last 60 years the correction has to pass that baseline and overcorrect. Meaning, home prices in the region have to venture into underpriced terrority relative to the underlying economic fundamentals.

Will the 60-year trendline eventually prove itself to continue on? Nobody can know for sure, although a lot of people will be guessing on it.

Median household income can’t swing the median priced house, but it should be able to swing the average 3/2 townhome/condo or the starter house in a halfway reasonable neighborhood outside the GH-etto.

$60,000 / 3 = $20,000 / 12 = $1,666/month. Call the maintenance costs a wash with the tax writeoff for a 3-person household and it still comes down to a starter home mortgage of about $225,000, which points to a $250,000 sale price with a 90% loan and when including the property tax rates.

That’s at a 6% mortgage interest rate. By the time these lenders book enough losses for the overall price structure to decline that far, I think the prevailing interest rates will be at least 8%, in which case that drops the amount of the loan to about $190,000, meaning a $210,000 point of entry. A return to 10% mortgage interest rates is not completely beyond the realm of reason if you consider how many investors will end up losing their shirts on their past bets.

What with the removal-by-default of the marginal buyers who got ahead of themselves this time, the pool of qualified buyers next time may be small enough to further undercut our inventory. Remember the boomer generation that is retiring during this same time frame and how few of them have the means to retire in place.

At the current rate of change in the pricing and when considering what the next 3 years will bring in resetting ARMs we certainly have enough time for the pricing to recede that far. Whether it will or not is something nobody can know. Remember, in 1998 nobody on this planet could have foreseen how high the pricing was going to get by 2005 and anyone who says differently is a liar.

I need another beer.

[Bugs]

The warnings of the -50% correction off peak pricing was always pretty conservative because it only assumed pricing would recede back to, but not pass, the long term trendline. That trendline represents the baseline between the highs and the lows along the way. In order for that trendline to continue to hold as it has over the last 60 years the correction has to pass that baseline and overcorrect. Meaning, home prices in the region have to venture into underpriced terrority relative to the underlying economic fundamentals.

Will the 60-year trendline eventually prove itself to continue on? Nobody can know for sure, although a lot of people will be guessing on it.

Median household income can’t swing the median priced house, but it should be able to swing the average 3/2 townhome/condo or the starter house in a halfway reasonable neighborhood outside the GH-etto.

$60,000 / 3 = $20,000 / 12 = $1,666/month. Call the maintenance costs a wash with the tax writeoff for a 3-person household and it still comes down to a starter home mortgage of about $225,000, which points to a $250,000 sale price with a 90% loan and when including the property tax rates.

That’s at a 6% mortgage interest rate. By the time these lenders book enough losses for the overall price structure to decline that far, I think the prevailing interest rates will be at least 8%, in which case that drops the amount of the loan to about $190,000, meaning a $210,000 point of entry. A return to 10% mortgage interest rates is not completely beyond the realm of reason if you consider how many investors will end up losing their shirts on their past bets.

What with the removal-by-default of the marginal buyers who got ahead of themselves this time, the pool of qualified buyers next time may be small enough to further undercut our inventory. Remember the boomer generation that is retiring during this same time frame and how few of them have the means to retire in place.

At the current rate of change in the pricing and when considering what the next 3 years will bring in resetting ARMs we certainly have enough time for the pricing to recede that far. Whether it will or not is something nobody can know. Remember, in 1998 nobody on this planet could have foreseen how high the pricing was going to get by 2005 and anyone who says differently is a liar.

I need another beer.

[Bugs]

The warnings of the -50% correction off peak pricing was always pretty conservative because it only assumed pricing would recede back to, but not pass, the long term trendline. That trendline represents the baseline between the highs and the lows along the way. In order for that trendline to continue to hold as it has over the last 60 years the correction has to pass that baseline and overcorrect. Meaning, home prices in the region have to venture into underpriced terrority relative to the underlying economic fundamentals.

Will the 60-year trendline eventually prove itself to continue on? Nobody can know for sure, although a lot of people will be guessing on it.

Median household income can’t swing the median priced house, but it should be able to swing the average 3/2 townhome/condo or the starter house in a halfway reasonable neighborhood outside the GH-etto.

$60,000 / 3 = $20,000 / 12 = $1,666/month. Call the maintenance costs a wash with the tax writeoff for a 3-person household and it still comes down to a starter home mortgage of about $225,000, which points to a $250,000 sale price with a 90% loan and when including the property tax rates.

That’s at a 6% mortgage interest rate. By the time these lenders book enough losses for the overall price structure to decline that far, I think the prevailing interest rates will be at least 8%, in which case that drops the amount of the loan to about $190,000, meaning a $210,000 point of entry. A return to 10% mortgage interest rates is not completely beyond the realm of reason if you consider how many investors will end up losing their shirts on their past bets.

What with the removal-by-default of the marginal buyers who got ahead of themselves this time, the pool of qualified buyers next time may be small enough to further undercut our inventory. Remember the boomer generation that is retiring during this same time frame and how few of them have the means to retire in place.

At the current rate of change in the pricing and when considering what the next 3 years will bring in resetting ARMs we certainly have enough time for the pricing to recede that far. Whether it will or not is something nobody can know. Remember, in 1998 nobody on this planet could have foreseen how high the pricing was going to get by 2005 and anyone who says differently is a liar.

I need another beer.

[Bugs]

The warnings of the -50% correction off peak pricing was always pretty conservative because it only assumed pricing would recede back to, but not pass, the long term trendline. That trendline represents the baseline between the highs and the lows along the way. In order for that trendline to continue to hold as it has over the last 60 years the correction has to pass that baseline and overcorrect. Meaning, home prices in the region have to venture into underpriced terrority relative to the underlying economic fundamentals.

Will the 60-year trendline eventually prove itself to continue on? Nobody can know for sure, although a lot of people will be guessing on it.

Median household income can’t swing the median priced house, but it should be able to swing the average 3/2 townhome/condo or the starter house in a halfway reasonable neighborhood outside the GH-etto.

$60,000 / 3 = $20,000 / 12 = $1,666/month. Call the maintenance costs a wash with the tax writeoff for a 3-person household and it still comes down to a starter home mortgage of about $225,000, which points to a $250,000 sale price with a 90% loan and when including the property tax rates.

That’s at a 6% mortgage interest rate. By the time these lenders book enough losses for the overall price structure to decline that far, I think the prevailing interest rates will be at least 8%, in which case that drops the amount of the loan to about $190,000, meaning a $210,000 point of entry. A return to 10% mortgage interest rates is not completely beyond the realm of reason if you consider how many investors will end up losing their shirts on their past bets.

What with the removal-by-default of the marginal buyers who got ahead of themselves this time, the pool of qualified buyers next time may be small enough to further undercut our inventory. Remember the boomer generation that is retiring during this same time frame and how few of them have the means to retire in place.

At the current rate of change in the pricing and when considering what the next 3 years will bring in resetting ARMs we certainly have enough time for the pricing to recede that far. Whether it will or not is something nobody can know. Remember, in 1998 nobody on this planet could have foreseen how high the pricing was going to get by 2005 and anyone who says differently is a liar.

I need another beer.

[Bugs]

Incidentally, the $80,000 houshold income, as would be represented at the 75th percentile in our region, could swing a mortgage of $310,000, leading to the $345,000 median housing price. That is, of course, assuming no move-up equity and the aforementioned 6% mortgage interest rate. At an 8% interest rate the PITI payment drops to support a $260,000 mortgage and the sale price (median) drops to $290,000. Should the sky fall and we end up with 10% interest rates again that mortgage drops to ~$215,000 and a sale price of ~$240,000.

[Bugs]

Incidentally, the $80,000 houshold income, as would be represented at the 75th percentile in our region, could swing a mortgage of $310,000, leading to the $345,000 median housing price. That is, of course, assuming no move-up equity and the aforementioned 6% mortgage interest rate. At an 8% interest rate the PITI payment drops to support a $260,000 mortgage and the sale price (median) drops to $290,000. Should the sky fall and we end up with 10% interest rates again that mortgage drops to ~$215,000 and a sale price of ~$240,000.

[Bugs]

Incidentally, the $80,000 houshold income, as would be represented at the 75th percentile in our region, could swing a mortgage of $310,000, leading to the $345,000 median housing price. That is, of course, assuming no move-up equity and the aforementioned 6% mortgage interest rate. At an 8% interest rate the PITI payment drops to support a $260,000 mortgage and the sale price (median) drops to $290,000. Should the sky fall and we end up with 10% interest rates again that mortgage drops to ~$215,000 and a sale price of ~$240,000.

[Bugs]

Incidentally, the $80,000 houshold income, as would be represented at the 75th percentile in our region, could swing a mortgage of $310,000, leading to the $345,000 median housing price. That is, of course, assuming no move-up equity and the aforementioned 6% mortgage interest rate. At an 8% interest rate the PITI payment drops to support a $260,000 mortgage and the sale price (median) drops to $290,000. Should the sky fall and we end up with 10% interest rates again that mortgage drops to ~$215,000 and a sale price of ~$240,000.

[Bugs]

Incidentally, the $80,000 houshold income, as would be represented at the 75th percentile in our region, could swing a mortgage of $310,000, leading to the $345,000 median housing price. That is, of course, assuming no move-up equity and the aforementioned 6% mortgage interest rate. At an 8% interest rate the PITI payment drops to support a $260,000 mortgage and the sale price (median) drops to $290,000. Should the sky fall and we end up with 10% interest rates again that mortgage drops to ~$215,000 and a sale price of ~$240,000.

[NotCranky]

Kewp, I don’t really know that much about Radelowes project so I shouldn’t have said it. However, if anything gets built construction has not come to a complete halt whether it is profitable or not.

[NotCranky]

Kewp, I don’t really know that much about Radelowes project so I shouldn’t have said it. However, if anything gets built construction has not come to a complete halt whether it is profitable or not.

[NotCranky]

Kewp, I don’t really know that much about Radelowes project so I shouldn’t have said it. However, if anything gets built construction has not come to a complete halt whether it is profitable or not.

[NotCranky]

Kewp, I don’t really know that much about Radelowes project so I shouldn’t have said it. However, if anything gets built construction has not come to a complete halt whether it is profitable or not.

[Author]

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