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gandalf.
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November 24, 2009 at 10:49 AM #486953November 24, 2009 at 11:03 AM #486109
sd_owner
ParticipantPowayseller made the right call indeed. What she (and many of us) did not expect was that the fed would take such great pains to prop up the housing market. Therefore, the magnitude of the decline has been much less than she predicted.
She is making the correct call again this time. At this time, it is fairly safe to say that, in terms of nominal home prices (i.e., before taking inflation into consideration), the downside risk is much smaller than the upside. The biggest risk is inflation. When that comes, asset (including homes) prices will start shooting up again.
November 24, 2009 at 11:03 AM #486276ParticipantPowayseller made the right call indeed. What she (and many of us) did not expect was that the fed would take such great pains to prop up the housing market. Therefore, the magnitude of the decline has been much less than she predicted.
She is making the correct call again this time. At this time, it is fairly safe to say that, in terms of nominal home prices (i.e., before taking inflation into consideration), the downside risk is much smaller than the upside. The biggest risk is inflation. When that comes, asset (including homes) prices will start shooting up again.
November 24, 2009 at 11:03 AM #486650ParticipantPowayseller made the right call indeed. What she (and many of us) did not expect was that the fed would take such great pains to prop up the housing market. Therefore, the magnitude of the decline has been much less than she predicted.
She is making the correct call again this time. At this time, it is fairly safe to say that, in terms of nominal home prices (i.e., before taking inflation into consideration), the downside risk is much smaller than the upside. The biggest risk is inflation. When that comes, asset (including homes) prices will start shooting up again.
November 24, 2009 at 11:03 AM #486736ParticipantPowayseller made the right call indeed. What she (and many of us) did not expect was that the fed would take such great pains to prop up the housing market. Therefore, the magnitude of the decline has been much less than she predicted.
She is making the correct call again this time. At this time, it is fairly safe to say that, in terms of nominal home prices (i.e., before taking inflation into consideration), the downside risk is much smaller than the upside. The biggest risk is inflation. When that comes, asset (including homes) prices will start shooting up again.
November 24, 2009 at 11:03 AM #486968ParticipantPowayseller made the right call indeed. What she (and many of us) did not expect was that the fed would take such great pains to prop up the housing market. Therefore, the magnitude of the decline has been much less than she predicted.
She is making the correct call again this time. At this time, it is fairly safe to say that, in terms of nominal home prices (i.e., before taking inflation into consideration), the downside risk is much smaller than the upside. The biggest risk is inflation. When that comes, asset (including homes) prices will start shooting up again.
November 24, 2009 at 11:10 AM #486114(former)FormerSanDiegan
Participant[quote=deadzone]
If any of you really belive this is over, or that the high-end won’t get hit, do you realize the Option ARM and Alt-A resets are due to hit in mass in 2010-2012? What % of these mortages do you think really got adjusted to fixed? How many of those adjusted will still go into default anyway? What more ammunition does the gov have to fend off this next foreclosure wave? Hard to lower interest rates any more than 0%.[/quote]
I agree that Option ARMS are toast.
But your typical Alt-A 5/1 ARMs are currently resetting to levels at or below their initial rate. In fact, the LIBOR would have to jump by nearly 3 percentage points from topday’s rates for the typical alt-A 5/1 ARMs to reset above 6%.November 24, 2009 at 11:10 AM #486281Participant[quote=deadzone]
If any of you really belive this is over, or that the high-end won’t get hit, do you realize the Option ARM and Alt-A resets are due to hit in mass in 2010-2012? What % of these mortages do you think really got adjusted to fixed? How many of those adjusted will still go into default anyway? What more ammunition does the gov have to fend off this next foreclosure wave? Hard to lower interest rates any more than 0%.[/quote]
I agree that Option ARMS are toast.
But your typical Alt-A 5/1 ARMs are currently resetting to levels at or below their initial rate. In fact, the LIBOR would have to jump by nearly 3 percentage points from topday’s rates for the typical alt-A 5/1 ARMs to reset above 6%.November 24, 2009 at 11:10 AM #486655Participant[quote=deadzone]
If any of you really belive this is over, or that the high-end won’t get hit, do you realize the Option ARM and Alt-A resets are due to hit in mass in 2010-2012? What % of these mortages do you think really got adjusted to fixed? How many of those adjusted will still go into default anyway? What more ammunition does the gov have to fend off this next foreclosure wave? Hard to lower interest rates any more than 0%.[/quote]
I agree that Option ARMS are toast.
But your typical Alt-A 5/1 ARMs are currently resetting to levels at or below their initial rate. In fact, the LIBOR would have to jump by nearly 3 percentage points from topday’s rates for the typical alt-A 5/1 ARMs to reset above 6%.November 24, 2009 at 11:10 AM #486741Participant[quote=deadzone]
If any of you really belive this is over, or that the high-end won’t get hit, do you realize the Option ARM and Alt-A resets are due to hit in mass in 2010-2012? What % of these mortages do you think really got adjusted to fixed? How many of those adjusted will still go into default anyway? What more ammunition does the gov have to fend off this next foreclosure wave? Hard to lower interest rates any more than 0%.[/quote]
I agree that Option ARMS are toast.
But your typical Alt-A 5/1 ARMs are currently resetting to levels at or below their initial rate. In fact, the LIBOR would have to jump by nearly 3 percentage points from topday’s rates for the typical alt-A 5/1 ARMs to reset above 6%.November 24, 2009 at 11:10 AM #486973Participant[quote=deadzone]
If any of you really belive this is over, or that the high-end won’t get hit, do you realize the Option ARM and Alt-A resets are due to hit in mass in 2010-2012? What % of these mortages do you think really got adjusted to fixed? How many of those adjusted will still go into default anyway? What more ammunition does the gov have to fend off this next foreclosure wave? Hard to lower interest rates any more than 0%.[/quote]
I agree that Option ARMS are toast.
But your typical Alt-A 5/1 ARMs are currently resetting to levels at or below their initial rate. In fact, the LIBOR would have to jump by nearly 3 percentage points from topday’s rates for the typical alt-A 5/1 ARMs to reset above 6%.November 24, 2009 at 12:20 PM #486139Anonymous
GuestAre you suggesting that the Alt-As won’t “recast” like the Option ARMs? Because when the reset hits, it’s not just the interest rate. Nearly all of these borrorers are now well under water (See WSJ front page today). This means due to their decreasing LTV, monthly payment will still go up regardless of interest rate.
November 24, 2009 at 12:20 PM #486306GuestAre you suggesting that the Alt-As won’t “recast” like the Option ARMs? Because when the reset hits, it’s not just the interest rate. Nearly all of these borrorers are now well under water (See WSJ front page today). This means due to their decreasing LTV, monthly payment will still go up regardless of interest rate.
November 24, 2009 at 12:20 PM #486680GuestAre you suggesting that the Alt-As won’t “recast” like the Option ARMs? Because when the reset hits, it’s not just the interest rate. Nearly all of these borrorers are now well under water (See WSJ front page today). This means due to their decreasing LTV, monthly payment will still go up regardless of interest rate.
November 24, 2009 at 12:20 PM #486766GuestAre you suggesting that the Alt-As won’t “recast” like the Option ARMs? Because when the reset hits, it’s not just the interest rate. Nearly all of these borrorers are now well under water (See WSJ front page today). This means due to their decreasing LTV, monthly payment will still go up regardless of interest rate.
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