Bailout won’t cure all that ails housing

[sdrealtor]

SD R,
I think we both went on record several months ago stating that there would be extraordinary efforts coming in the way of governmental interventions to prop up the RE market. Neither of us said it would save the market or turn it around but we were both pretty convinced it would slow the decline and spread out the pain over several years. I think we are seeing exactly what we expected. I was speaking with a high level mortgage exec last nite over a couple beers while watching the USC-OSU game, at least he was a high level executive. He said the declines in rates were simply the closing of the gap between the treasuries and mortgage rates to what we have traditionally seen. He thinks we have another .25 to .5% downward yet to come in the rates in the short term. At 5.5% on the 30 year fixed, we’ll see buyers continuing to step up as 500K loans are very doable for folks with 150K+ HH incomes. These are the folks buying the 4BR 2500 to 3000 sq ft newer homes that will never drop below 600K on the low side IMO.

If I was an entry level buyer in a hard hit area I’d be thinking long and hard about buying if I could actually find a home I liked. One of these days, we gotta grab lunch or something for a few giggles over all the fun we’ve had the last 2 years. It has been fun….hasn’t it?

Bob007,
We have already seen substantial declines on the coast. Not what we saw in the low areas which were always more bubblicious anyway and not what most around here want to see as its an area that is high on their wishlists but definitely substantial nonetheless.

The declines will continue but the worst pricewise has passed IMO. For example, my own home is down about 20% off peak and will probably go down another 10% off the peak number (or about 15% from where we are now). If I had to sell I’d rent my house before selling becaus eit would be cash flow positive in a big way. There are some weak hands in my hood but far more strong hands. Most people I know have 400K mortgages or less with household incomes of at least 150K with most substantially higher. Are these folks happy the price of their home has dropped? NO. Are they concerned about it? NO. My friends and neighbors regularly ask me what I think and I tell them. I get a few “that bad? Huh’s?” followed by who cares I pad 400K for my house and I love it here. We’re not going anywhere.

That’s my story and I’m sticking to it.

sdr

[NotCranky]

original sdr,

I’ve seen a few big list price capitulations in somewhat slow to stagnant areas, that subsequently went into escrow fast.Don’t know how heavy the bidding was. My instincts and educated guess is that it wasn’t particularly heavy in most cases.
A client also got a really good counter from a low-ball on a REO.The response was quick. These are a mix of turnkey and fixer properties , non-distressed, short sale, and REO. They are around and up to a few hundred grand above the median.I-8 corridor and East County.I guess you are seeing this happen in stronger sub- markets too?I Don’t know if there is any correlation to the bailout, but lower rates, if they have been a consequence,can not hurt.

You are probably seeing buyer’s who, for example, placed an offer for 500k 3 to 4 weeks ago with a 6.25% rate and got countered at around 520k more or less, with a rate under 6% available today? Many if not most buyers are going to see that as an equivalent opportunity and go to escrow when they would not have previously, especially if rates had gone up in the interim.

The mortgage broker who I talk most with says nothing but the rates have changed (as of last week). He warned that getting PMI on for lower down buyers could possibly be a problem going forward. Have you seen that?SDR?

I did get an add in my e-mail for stated loans. You probably got it too? I didn’t look into it. All stated probably has really high LTV’s and is not causing any increased activity.

I am not interpreting a bottom here or even a trend change. Even after good negotiating, properties in the price range and areas that I mostly focus on have more drops ahead for the most part.

Anyway, recalling that we have talked about a “gut felt” experience of when the market peaked, probably a blend of instinct and observation, I think we will similarly catch on to any durable end to the trend of price declines(keeping in mind sub-market variation, armageddon etc.).

[NotCranky]

original sdr,

I’ve seen a few big list price capitulations in somewhat slow to stagnant areas, that subsequently went into escrow fast.Don’t know how heavy the bidding was. My instincts and educated guess is that it wasn’t particularly heavy in most cases.
A client also got a really good counter from a low-ball on a REO.The response was quick. These are a mix of turnkey and fixer properties , non-distressed, short sale, and REO. They are around and up to a few hundred grand above the median.I-8 corridor and East County.I guess you are seeing this happen in stronger sub- markets too?I Don’t know if there is any correlation to the bailout, but lower rates, if they have been a consequence,can not hurt.

You are probably seeing buyer’s who, for example, placed an offer for 500k 3 to 4 weeks ago with a 6.25% rate and got countered at around 520k more or less, with a rate under 6% available today? Many if not most buyers are going to see that as an equivalent opportunity and go to escrow when they would not have previously, especially if rates had gone up in the interim.

The mortgage broker who I talk most with says nothing but the rates have changed (as of last week). He warned that getting PMI on for lower down buyers could possibly be a problem going forward. Have you seen that?SDR?

I did get an add in my e-mail for stated loans. You probably got it too? I didn’t look into it. All stated probably has really high LTV’s and is not causing any increased activity.

I am not interpreting a bottom here or even a trend change. Even after good negotiating, properties in the price range and areas that I mostly focus on have more drops ahead for the most part.

Anyway, recalling that we have talked about a “gut felt” experience of when the market peaked, probably a blend of instinct and observation, I think we will similarly catch on to any durable end to the trend of price declines(keeping in mind sub-market variation, armageddon etc.).

[NotCranky]

original sdr,

I’ve seen a few big list price capitulations in somewhat slow to stagnant areas, that subsequently went into escrow fast.Don’t know how heavy the bidding was. My instincts and educated guess is that it wasn’t particularly heavy in most cases.
A client also got a really good counter from a low-ball on a REO.The response was quick. These are a mix of turnkey and fixer properties , non-distressed, short sale, and REO. They are around and up to a few hundred grand above the median.I-8 corridor and East County.I guess you are seeing this happen in stronger sub- markets too?I Don’t know if there is any correlation to the bailout, but lower rates, if they have been a consequence,can not hurt.

You are probably seeing buyer’s who, for example, placed an offer for 500k 3 to 4 weeks ago with a 6.25% rate and got countered at around 520k more or less, with a rate under 6% available today? Many if not most buyers are going to see that as an equivalent opportunity and go to escrow when they would not have previously, especially if rates had gone up in the interim.

The mortgage broker who I talk most with says nothing but the rates have changed (as of last week). He warned that getting PMI on for lower down buyers could possibly be a problem going forward. Have you seen that?SDR?

I did get an add in my e-mail for stated loans. You probably got it too? I didn’t look into it. All stated probably has really high LTV’s and is not causing any increased activity.

I am not interpreting a bottom here or even a trend change. Even after good negotiating, properties in the price range and areas that I mostly focus on have more drops ahead for the most part.

Anyway, recalling that we have talked about a “gut felt” experience of when the market peaked, probably a blend of instinct and observation, I think we will similarly catch on to any durable end to the trend of price declines(keeping in mind sub-market variation, armageddon etc.).

[NotCranky]

original sdr,

I’ve seen a few big list price capitulations in somewhat slow to stagnant areas, that subsequently went into escrow fast.Don’t know how heavy the bidding was. My instincts and educated guess is that it wasn’t particularly heavy in most cases.
A client also got a really good counter from a low-ball on a REO.The response was quick. These are a mix of turnkey and fixer properties , non-distressed, short sale, and REO. They are around and up to a few hundred grand above the median.I-8 corridor and East County.I guess you are seeing this happen in stronger sub- markets too?I Don’t know if there is any correlation to the bailout, but lower rates, if they have been a consequence,can not hurt.

You are probably seeing buyer’s who, for example, placed an offer for 500k 3 to 4 weeks ago with a 6.25% rate and got countered at around 520k more or less, with a rate under 6% available today? Many if not most buyers are going to see that as an equivalent opportunity and go to escrow when they would not have previously, especially if rates had gone up in the interim.

The mortgage broker who I talk most with says nothing but the rates have changed (as of last week). He warned that getting PMI on for lower down buyers could possibly be a problem going forward. Have you seen that?SDR?

I did get an add in my e-mail for stated loans. You probably got it too? I didn’t look into it. All stated probably has really high LTV’s and is not causing any increased activity.

I am not interpreting a bottom here or even a trend change. Even after good negotiating, properties in the price range and areas that I mostly focus on have more drops ahead for the most part.

Anyway, recalling that we have talked about a “gut felt” experience of when the market peaked, probably a blend of instinct and observation, I think we will similarly catch on to any durable end to the trend of price declines(keeping in mind sub-market variation, armageddon etc.).

[NotCranky]

original sdr,

I’ve seen a few big list price capitulations in somewhat slow to stagnant areas, that subsequently went into escrow fast.Don’t know how heavy the bidding was. My instincts and educated guess is that it wasn’t particularly heavy in most cases.
A client also got a really good counter from a low-ball on a REO.The response was quick. These are a mix of turnkey and fixer properties , non-distressed, short sale, and REO. They are around and up to a few hundred grand above the median.I-8 corridor and East County.I guess you are seeing this happen in stronger sub- markets too?I Don’t know if there is any correlation to the bailout, but lower rates, if they have been a consequence,can not hurt.

You are probably seeing buyer’s who, for example, placed an offer for 500k 3 to 4 weeks ago with a 6.25% rate and got countered at around 520k more or less, with a rate under 6% available today? Many if not most buyers are going to see that as an equivalent opportunity and go to escrow when they would not have previously, especially if rates had gone up in the interim.

The mortgage broker who I talk most with says nothing but the rates have changed (as of last week). He warned that getting PMI on for lower down buyers could possibly be a problem going forward. Have you seen that?SDR?

I did get an add in my e-mail for stated loans. You probably got it too? I didn’t look into it. All stated probably has really high LTV’s and is not causing any increased activity.

I am not interpreting a bottom here or even a trend change. Even after good negotiating, properties in the price range and areas that I mostly focus on have more drops ahead for the most part.

Anyway, recalling that we have talked about a “gut felt” experience of when the market peaked, probably a blend of instinct and observation, I think we will similarly catch on to any durable end to the trend of price declines(keeping in mind sub-market variation, armageddon etc.).

[TheBreeze]

[quote=SD Realtor]
These bailouts are going to keep happening and IMO will not do anything to cure the problem, yet they may indeed simply lengthen the decline and decrease the slope of the decline. Furthermore I am getting more and more convinced that we aint seen nothing yet with respect to the feds keeping the financing spigot open for homebuyers. [/quote]

What more can the gubmint do? They’ve already nationalized Fannie and Freddie. That’s pretty huge.

I agree thought that the bottom keeps getting pushed out with all this taxpayer money flying around. However, if we start to see job losses among the relatively high earners, then Uncle Sam won’t be able to prop up prices any longer. If San Diego can somehow avoid a recession, then the worst of the declines may indeed be over.

[TheBreeze]

[quote=SD Realtor]
These bailouts are going to keep happening and IMO will not do anything to cure the problem, yet they may indeed simply lengthen the decline and decrease the slope of the decline. Furthermore I am getting more and more convinced that we aint seen nothing yet with respect to the feds keeping the financing spigot open for homebuyers. [/quote]

What more can the gubmint do? They’ve already nationalized Fannie and Freddie. That’s pretty huge.

I agree thought that the bottom keeps getting pushed out with all this taxpayer money flying around. However, if we start to see job losses among the relatively high earners, then Uncle Sam won’t be able to prop up prices any longer. If San Diego can somehow avoid a recession, then the worst of the declines may indeed be over.

[TheBreeze]

[quote=SD Realtor]
These bailouts are going to keep happening and IMO will not do anything to cure the problem, yet they may indeed simply lengthen the decline and decrease the slope of the decline. Furthermore I am getting more and more convinced that we aint seen nothing yet with respect to the feds keeping the financing spigot open for homebuyers. [/quote]

What more can the gubmint do? They’ve already nationalized Fannie and Freddie. That’s pretty huge.

I agree thought that the bottom keeps getting pushed out with all this taxpayer money flying around. However, if we start to see job losses among the relatively high earners, then Uncle Sam won’t be able to prop up prices any longer. If San Diego can somehow avoid a recession, then the worst of the declines may indeed be over.

[TheBreeze]

[quote=SD Realtor]
These bailouts are going to keep happening and IMO will not do anything to cure the problem, yet they may indeed simply lengthen the decline and decrease the slope of the decline. Furthermore I am getting more and more convinced that we aint seen nothing yet with respect to the feds keeping the financing spigot open for homebuyers. [/quote]

What more can the gubmint do? They’ve already nationalized Fannie and Freddie. That’s pretty huge.

I agree thought that the bottom keeps getting pushed out with all this taxpayer money flying around. However, if we start to see job losses among the relatively high earners, then Uncle Sam won’t be able to prop up prices any longer. If San Diego can somehow avoid a recession, then the worst of the declines may indeed be over.

[TheBreeze]

[quote=SD Realtor]
These bailouts are going to keep happening and IMO will not do anything to cure the problem, yet they may indeed simply lengthen the decline and decrease the slope of the decline. Furthermore I am getting more and more convinced that we aint seen nothing yet with respect to the feds keeping the financing spigot open for homebuyers. [/quote]

What more can the gubmint do? They’ve already nationalized Fannie and Freddie. That’s pretty huge.

I agree thought that the bottom keeps getting pushed out with all this taxpayer money flying around. However, if we start to see job losses among the relatively high earners, then Uncle Sam won’t be able to prop up prices any longer. If San Diego can somehow avoid a recession, then the worst of the declines may indeed be over.

[sdrealtor]

What else can the gubmint do? I think we just saw more this morning.

As for the high earners in San Diego, they dont typically work for large local employers. SD has never been home to major corps like other large metros are. This makes it a more piecemeal process for high wage earners to succumb.

[sdrealtor]

What else can the gubmint do? I think we just saw more this morning.

As for the high earners in San Diego, they dont typically work for large local employers. SD has never been home to major corps like other large metros are. This makes it a more piecemeal process for high wage earners to succumb.

[sdrealtor]

What else can the gubmint do? I think we just saw more this morning.

As for the high earners in San Diego, they dont typically work for large local employers. SD has never been home to major corps like other large metros are. This makes it a more piecemeal process for high wage earners to succumb.

[sdrealtor]

What else can the gubmint do? I think we just saw more this morning.

As for the high earners in San Diego, they dont typically work for large local employers. SD has never been home to major corps like other large metros are. This makes it a more piecemeal process for high wage earners to succumb.

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