BusinessWeek: Why housing could fall 25%

[kev374]

Good read from BusinessWeek predicting at least a 25-30% national decline (which means at least 35-50% here in CA)

http://www.businessweek.com/magazine/content/08_06/b4070040767516.htm

[robson]

“A Harris Interactive (HPOL) survey for Zillow.com in December found that 36% of homeowners thought their homes had increased in value over the past year, vs. 23% who thought they had decreased.”
The stupidity of the public never ceases to amaze. Is it due to simply being uninformed or denial?

[LAAFTERHOURS]

4s Renter

Lots from both sides. People are in denial bc they refuse to believe the news/ signs. Uninformed are the ones who havent taken the time to look at their rate/ loans since they got that sweet low deal in the past two years.

Every major news outlet is predicting 15% or more for 2008 with the end not in site for 2-3 years.. time for their people to remove their heads from the backside..

[cr]

”…and the Silver Lining
Prices are falling in Britain as well, and to some analysts, that’s just fine. On Jan. 28, The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think I’ve heard one main stream comment that declining prices are a good thing. I’m surprised the perma-bulls don’t start pointing to this. Although that would mean they would have to accept that prices are going to fall even further. Of course that means thinking beyond 3 months, which Wall Street, the FED, and our Government can’t do.

Oh the horror when a sub $100,000 HH income can afford a home again!

[kev374]

You must understand that people are in denial because the reality is too painful to accept. These people have either already spent their appreciation or have made grand plans – for instance cash in their equity and retire, take a few cruises, travel the world etc. For some the equity represents their entire retirement plans. For these people their home reprents the jackpot that they have won.

[kev374]

You must understand that people are in denial because the reality is too painful to accept. These people have either already spent their appreciation or have made grand plans – for instance cash in their equity and retire, take a few cruises, travel the world etc. For some the equity represents their entire retirement plans. For these people their home reprents the jackpot that they have won.

[kev374]

You must understand that people are in denial because the reality is too painful to accept. These people have either already spent their appreciation or have made grand plans – for instance cash in their equity and retire, take a few cruises, travel the world etc. For some the equity represents their entire retirement plans. For these people their home reprents the jackpot that they have won.

[kev374]

You must understand that people are in denial because the reality is too painful to accept. These people have either already spent their appreciation or have made grand plans – for instance cash in their equity and retire, take a few cruises, travel the world etc. For some the equity represents their entire retirement plans. For these people their home reprents the jackpot that they have won.

[kev374]

You must understand that people are in denial because the reality is too painful to accept. These people have either already spent their appreciation or have made grand plans – for instance cash in their equity and retire, take a few cruises, travel the world etc. For some the equity represents their entire retirement plans. For these people their home reprents the jackpot that they have won.

[cr]

”…and the Silver Lining
Prices are falling in Britain as well, and to some analysts, that’s just fine. On Jan. 28, The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think I’ve heard one main stream comment that declining prices are a good thing. I’m surprised the perma-bulls don’t start pointing to this. Although that would mean they would have to accept that prices are going to fall even further. Of course that means thinking beyond 3 months, which Wall Street, the FED, and our Government can’t do.

Oh the horror when a sub $100,000 HH income can afford a home again!

[cr]

”…and the Silver Lining
Prices are falling in Britain as well, and to some analysts, that’s just fine. On Jan. 28, The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think I’ve heard one main stream comment that declining prices are a good thing. I’m surprised the perma-bulls don’t start pointing to this. Although that would mean they would have to accept that prices are going to fall even further. Of course that means thinking beyond 3 months, which Wall Street, the FED, and our Government can’t do.

Oh the horror when a sub $100,000 HH income can afford a home again!

[cr]

”…and the Silver Lining
Prices are falling in Britain as well, and to some analysts, that’s just fine. On Jan. 28, The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think I’ve heard one main stream comment that declining prices are a good thing. I’m surprised the perma-bulls don’t start pointing to this. Although that would mean they would have to accept that prices are going to fall even further. Of course that means thinking beyond 3 months, which Wall Street, the FED, and our Government can’t do.

Oh the horror when a sub $100,000 HH income can afford a home again!

[cr]

”…and the Silver Lining
Prices are falling in Britain as well, and to some analysts, that’s just fine. On Jan. 28, The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think I’ve heard one main stream comment that declining prices are a good thing. I’m surprised the perma-bulls don’t start pointing to this. Although that would mean they would have to accept that prices are going to fall even further. Of course that means thinking beyond 3 months, which Wall Street, the FED, and our Government can’t do.

Oh the horror when a sub $100,000 HH income can afford a home again!

[LAAFTERHOURS]

4s Renter

Lots from both sides. People are in denial bc they refuse to believe the news/ signs. Uninformed are the ones who havent taken the time to look at their rate/ loans since they got that sweet low deal in the past two years.

Every major news outlet is predicting 15% or more for 2008 with the end not in site for 2-3 years.. time for their people to remove their heads from the backside..

[LAAFTERHOURS]

4s Renter

Lots from both sides. People are in denial bc they refuse to believe the news/ signs. Uninformed are the ones who havent taken the time to look at their rate/ loans since they got that sweet low deal in the past two years.

Every major news outlet is predicting 15% or more for 2008 with the end not in site for 2-3 years.. time for their people to remove their heads from the backside..

[LAAFTERHOURS]

4s Renter

Lots from both sides. People are in denial bc they refuse to believe the news/ signs. Uninformed are the ones who havent taken the time to look at their rate/ loans since they got that sweet low deal in the past two years.

Every major news outlet is predicting 15% or more for 2008 with the end not in site for 2-3 years.. time for their people to remove their heads from the backside..

[LAAFTERHOURS]

4s Renter

Lots from both sides. People are in denial bc they refuse to believe the news/ signs. Uninformed are the ones who havent taken the time to look at their rate/ loans since they got that sweet low deal in the past two years.

Every major news outlet is predicting 15% or more for 2008 with the end not in site for 2-3 years.. time for their people to remove their heads from the backside..

[robson]

“A Harris Interactive (HPOL) survey for Zillow.com in December found that 36% of homeowners thought their homes had increased in value over the past year, vs. 23% who thought they had decreased.”
The stupidity of the public never ceases to amaze. Is it due to simply being uninformed or denial?

[robson]

“A Harris Interactive (HPOL) survey for Zillow.com in December found that 36% of homeowners thought their homes had increased in value over the past year, vs. 23% who thought they had decreased.”
The stupidity of the public never ceases to amaze. Is it due to simply being uninformed or denial?

[robson]

“A Harris Interactive (HPOL) survey for Zillow.com in December found that 36% of homeowners thought their homes had increased in value over the past year, vs. 23% who thought they had decreased.”
The stupidity of the public never ceases to amaze. Is it due to simply being uninformed or denial?

[robson]

“A Harris Interactive (HPOL) survey for Zillow.com in December found that 36% of homeowners thought their homes had increased in value over the past year, vs. 23% who thought they had decreased.”
The stupidity of the public never ceases to amaze. Is it due to simply being uninformed or denial?

[jpinpb]

I owned a house in the previous boom. I tried to sell it in ’93. For a year it sat on the market, the length of the listing, w/not one offer. I didn’t ask anymore than I paid for it when I bought it a few years earlier.

I didn’t need a newspaper to tell me the market changed. I took it off the market and didn’t put it back on until many years later when the market picked up again.

These people are in serious denial. They need to wake up and smell the coffee. The flipping days are over. I say, if you can take riding it out, take it off the market and stop trying to sell something unsellable at a ridiculous price. All they’re doing is flooding the market w/inventory.

IMHO, there is less demand b/c of less qualified buyers. And those that are qualified (I’m one) are looking for a bargain. There are a lot of desperate people out there. More defaults and foreclosures on the way bringing down comps.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[jpinpb]

Gee. I guess I was lucky the last time around. It just seemed like for the last 30 years of watching real estate it goes up and comes down and goes back up again, etc. So I just naturally thought it would eventually in a few/several years go up again. 100 years !!!!

But they stopped making land 😉

I don’t feel in a hurry to buy now.

[HLS]

YES, you were “lucky” along with millions of others, but most people don’t see it as luck, but now an entitlement to easy street.

Just because there have been 9 cycles, doesn’t guarantee that there will be a 10th.

The psychology of people thinking that it has to happen can actually make it happen, but if that same psychology turns, it won’t happen. If psychology turns in the stock market, watch out below.

Houses are cheaper than they were 2 and 3 years ago. Mortgage rates are lower than they were 2 and 3 years ago,
actual payments are less than they were 2 and 3 years ago, SO where are the buyers ??

It’s a bargain now compared to 2 and 3 years ago, but the psychology has changed 180 degrees, and people who are smart are concerned, and those that aren’t concerned don’t understand what is happening.

Where are all the genius “investors” who went to seminars and bought books and tapes on RE investing ?
Since prices are cheaper now, the market should be booming, but it’s not.

The party is over, but some people are just arriving, thinking that they aren’t too late and there is more fun to come.

The band has packed up, the liquor bottles are empty, there is trash all over the place. There’s a mess that needs to be cleaned up.

Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.

[HLS]

YES, you were “lucky” along with millions of others, but most people don’t see it as luck, but now an entitlement to easy street.

Just because there have been 9 cycles, doesn’t guarantee that there will be a 10th.

The psychology of people thinking that it has to happen can actually make it happen, but if that same psychology turns, it won’t happen. If psychology turns in the stock market, watch out below.

Houses are cheaper than they were 2 and 3 years ago. Mortgage rates are lower than they were 2 and 3 years ago,
actual payments are less than they were 2 and 3 years ago, SO where are the buyers ??

It’s a bargain now compared to 2 and 3 years ago, but the psychology has changed 180 degrees, and people who are smart are concerned, and those that aren’t concerned don’t understand what is happening.

Where are all the genius “investors” who went to seminars and bought books and tapes on RE investing ?
Since prices are cheaper now, the market should be booming, but it’s not.

The party is over, but some people are just arriving, thinking that they aren’t too late and there is more fun to come.

The band has packed up, the liquor bottles are empty, there is trash all over the place. There’s a mess that needs to be cleaned up.

Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.

[HLS]

YES, you were “lucky” along with millions of others, but most people don’t see it as luck, but now an entitlement to easy street.

Just because there have been 9 cycles, doesn’t guarantee that there will be a 10th.

The psychology of people thinking that it has to happen can actually make it happen, but if that same psychology turns, it won’t happen. If psychology turns in the stock market, watch out below.

Houses are cheaper than they were 2 and 3 years ago. Mortgage rates are lower than they were 2 and 3 years ago,
actual payments are less than they were 2 and 3 years ago, SO where are the buyers ??

It’s a bargain now compared to 2 and 3 years ago, but the psychology has changed 180 degrees, and people who are smart are concerned, and those that aren’t concerned don’t understand what is happening.

Where are all the genius “investors” who went to seminars and bought books and tapes on RE investing ?
Since prices are cheaper now, the market should be booming, but it’s not.

The party is over, but some people are just arriving, thinking that they aren’t too late and there is more fun to come.

The band has packed up, the liquor bottles are empty, there is trash all over the place. There’s a mess that needs to be cleaned up.

Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.

[HLS]

YES, you were “lucky” along with millions of others, but most people don’t see it as luck, but now an entitlement to easy street.

Just because there have been 9 cycles, doesn’t guarantee that there will be a 10th.

The psychology of people thinking that it has to happen can actually make it happen, but if that same psychology turns, it won’t happen. If psychology turns in the stock market, watch out below.

Houses are cheaper than they were 2 and 3 years ago. Mortgage rates are lower than they were 2 and 3 years ago,
actual payments are less than they were 2 and 3 years ago, SO where are the buyers ??

It’s a bargain now compared to 2 and 3 years ago, but the psychology has changed 180 degrees, and people who are smart are concerned, and those that aren’t concerned don’t understand what is happening.

Where are all the genius “investors” who went to seminars and bought books and tapes on RE investing ?
Since prices are cheaper now, the market should be booming, but it’s not.

The party is over, but some people are just arriving, thinking that they aren’t too late and there is more fun to come.

The band has packed up, the liquor bottles are empty, there is trash all over the place. There’s a mess that needs to be cleaned up.

Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.

[HLS]

YES, you were “lucky” along with millions of others, but most people don’t see it as luck, but now an entitlement to easy street.

Just because there have been 9 cycles, doesn’t guarantee that there will be a 10th.

The psychology of people thinking that it has to happen can actually make it happen, but if that same psychology turns, it won’t happen. If psychology turns in the stock market, watch out below.

Houses are cheaper than they were 2 and 3 years ago. Mortgage rates are lower than they were 2 and 3 years ago,
actual payments are less than they were 2 and 3 years ago, SO where are the buyers ??

It’s a bargain now compared to 2 and 3 years ago, but the psychology has changed 180 degrees, and people who are smart are concerned, and those that aren’t concerned don’t understand what is happening.

Where are all the genius “investors” who went to seminars and bought books and tapes on RE investing ?
Since prices are cheaper now, the market should be booming, but it’s not.

The party is over, but some people are just arriving, thinking that they aren’t too late and there is more fun to come.

The band has packed up, the liquor bottles are empty, there is trash all over the place. There’s a mess that needs to be cleaned up.

Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.

[jpinpb]

Gee. I guess I was lucky the last time around. It just seemed like for the last 30 years of watching real estate it goes up and comes down and goes back up again, etc. So I just naturally thought it would eventually in a few/several years go up again. 100 years !!!!

But they stopped making land 😉

I don’t feel in a hurry to buy now.

[jpinpb]

Gee. I guess I was lucky the last time around. It just seemed like for the last 30 years of watching real estate it goes up and comes down and goes back up again, etc. So I just naturally thought it would eventually in a few/several years go up again. 100 years !!!!

But they stopped making land 😉

I don’t feel in a hurry to buy now.

[jpinpb]

Gee. I guess I was lucky the last time around. It just seemed like for the last 30 years of watching real estate it goes up and comes down and goes back up again, etc. So I just naturally thought it would eventually in a few/several years go up again. 100 years !!!!

But they stopped making land 😉

I don’t feel in a hurry to buy now.

[jpinpb]

Gee. I guess I was lucky the last time around. It just seemed like for the last 30 years of watching real estate it goes up and comes down and goes back up again, etc. So I just naturally thought it would eventually in a few/several years go up again. 100 years !!!!

But they stopped making land 😉

I don’t feel in a hurry to buy now.

[NotCranky]

One comment I have seen on this blog often is that houses will alway correct beyond the trendline. Thes graph that robson posted above seems to prove that. However, there are a few examples of it taking 20 years to do so and after many up and down movements in which inflation adjusted price did not go below the trend line. I am talking about the periods from 1890 to 1918 and 1945 to 1965.The last two cycles follow the immediate overcorrection idea. Obviously, there is currently room for a huge correction regardless of crossing or not crossing the trendline.

[NotCranky]

One comment I have seen on this blog often is that houses will alway correct beyond the trendline. Thes graph that robson posted above seems to prove that. However, there are a few examples of it taking 20 years to do so and after many up and down movements in which inflation adjusted price did not go below the trend line. I am talking about the periods from 1890 to 1918 and 1945 to 1965.The last two cycles follow the immediate overcorrection idea. Obviously, there is currently room for a huge correction regardless of crossing or not crossing the trendline.

[NotCranky]

One comment I have seen on this blog often is that houses will alway correct beyond the trendline. Thes graph that robson posted above seems to prove that. However, there are a few examples of it taking 20 years to do so and after many up and down movements in which inflation adjusted price did not go below the trend line. I am talking about the periods from 1890 to 1918 and 1945 to 1965.The last two cycles follow the immediate overcorrection idea. Obviously, there is currently room for a huge correction regardless of crossing or not crossing the trendline.

[NotCranky]

One comment I have seen on this blog often is that houses will alway correct beyond the trendline. Thes graph that robson posted above seems to prove that. However, there are a few examples of it taking 20 years to do so and after many up and down movements in which inflation adjusted price did not go below the trend line. I am talking about the periods from 1890 to 1918 and 1945 to 1965.The last two cycles follow the immediate overcorrection idea. Obviously, there is currently room for a huge correction regardless of crossing or not crossing the trendline.

[NotCranky]

One comment I have seen on this blog often is that houses will alway correct beyond the trendline. Thes graph that robson posted above seems to prove that. However, there are a few examples of it taking 20 years to do so and after many up and down movements in which inflation adjusted price did not go below the trend line. I am talking about the periods from 1890 to 1918 and 1945 to 1965.The last two cycles follow the immediate overcorrection idea. Obviously, there is currently room for a huge correction regardless of crossing or not crossing the trendline.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

[sdrealtor]

agreed Russ.

BTW, I dotn think ti will take 25 years to shake out, 2 more years is more like IMO.

[paramount]

My realtor – a reasonable person – thinks by summer prices stabilize.

[kewp]

Well, I think once it becomes fashionable to stop paying your mortgage this will correct itself right quick.

[kewp]

Well, I think once it becomes fashionable to stop paying your mortgage this will correct itself right quick.

[kewp]

Well, I think once it becomes fashionable to stop paying your mortgage this will correct itself right quick.

[kewp]

Well, I think once it becomes fashionable to stop paying your mortgage this will correct itself right quick.

[kewp]

Well, I think once it becomes fashionable to stop paying your mortgage this will correct itself right quick.

[Navydoc]

“My realtor – a reasonable person – thinks by summer prices stabilize.”

I would only agree with this if they stabilize 35-40% lower than they are now. Affordability in an era without ludicrous financing keeps rearing its ugly head. There simply is no way prices are going to fall this quickly.

By the way, this is the best thread this forum has had for about a month now. Nice to see discussions like this again.

OT: Did you guys know that if you use Mozilla Firefox as your browser it gives you a spell-check on this forum? Awesome!

[robson]

Spell-check is always a plus, as is Firefox 🙂
Couple things-
Not sure how accurate the data is, as it is extremely old. I would have to guess it’s probably good to within at least +/- 10% though and that’s enough to get a feel for long term trends. Anyone read Irrational Exuberance? I’m planning on it.
As far as the inflation since 1990 goes, I don’t doubt that could play a role. However, 95% of people probably trust the inflation data/aren’t aware of any change in methodology, and this is the graph/data that will continue to show up in the MSM. I think the larger significance is that data/articles of this nature are now showing up regularly in newsweek and yahoo finance. If the general perception changes from “real estate always rises” to “It takes 95 years for real estate to rise,” then housing will have a problem worse than a credit crunch. It is 1 thing for no one to be able to buy a house. It is another for no one to want to buy a house.
I mean no offense and am sure he/she is a good person, but any reasonable realtor also thinks that making a living is a good thing, and it is likely their opinion reflects this.

[jpinpb]

Even if property value does not increase for 95 years, some people will buy a home not for investment purposes, but for tax purposes. Others will pass it on to their kids, grandkids. Some people don’t like to rent and want to do whatever they want in their own home w/no restrictions. There will still be buyers who are not necessarily investors.

[patientlywaiting]

If the property market does not begin to appreciate by 2010, then my bet is that it’ll stagnate for 25 years.

The reason is that today’s job market require that people move frequently. Fewer new families can stay put more than 5 years. The ones that can already own homes. Remember, the rate of homeownership is fairly high already.

There will be fewer and fewer new buyers if they think that they need a minimum of 5 years to break even after closing costs.

[patientlywaiting]

If the property market does not begin to appreciate by 2010, then my bet is that it’ll stagnate for 25 years.

The reason is that today’s job market require that people move frequently. Fewer new families can stay put more than 5 years. The ones that can already own homes. Remember, the rate of homeownership is fairly high already.

There will be fewer and fewer new buyers if they think that they need a minimum of 5 years to break even after closing costs.

[patientlywaiting]

If the property market does not begin to appreciate by 2010, then my bet is that it’ll stagnate for 25 years.

The reason is that today’s job market require that people move frequently. Fewer new families can stay put more than 5 years. The ones that can already own homes. Remember, the rate of homeownership is fairly high already.

There will be fewer and fewer new buyers if they think that they need a minimum of 5 years to break even after closing costs.

[patientlywaiting]

If the property market does not begin to appreciate by 2010, then my bet is that it’ll stagnate for 25 years.

The reason is that today’s job market require that people move frequently. Fewer new families can stay put more than 5 years. The ones that can already own homes. Remember, the rate of homeownership is fairly high already.

There will be fewer and fewer new buyers if they think that they need a minimum of 5 years to break even after closing costs.

[patientlywaiting]

If the property market does not begin to appreciate by 2010, then my bet is that it’ll stagnate for 25 years.

The reason is that today’s job market require that people move frequently. Fewer new families can stay put more than 5 years. The ones that can already own homes. Remember, the rate of homeownership is fairly high already.

There will be fewer and fewer new buyers if they think that they need a minimum of 5 years to break even after closing costs.

[jpinpb]

Even if property value does not increase for 95 years, some people will buy a home not for investment purposes, but for tax purposes. Others will pass it on to their kids, grandkids. Some people don’t like to rent and want to do whatever they want in their own home w/no restrictions. There will still be buyers who are not necessarily investors.

[jpinpb]

Even if property value does not increase for 95 years, some people will buy a home not for investment purposes, but for tax purposes. Others will pass it on to their kids, grandkids. Some people don’t like to rent and want to do whatever they want in their own home w/no restrictions. There will still be buyers who are not necessarily investors.

[jpinpb]

Even if property value does not increase for 95 years, some people will buy a home not for investment purposes, but for tax purposes. Others will pass it on to their kids, grandkids. Some people don’t like to rent and want to do whatever they want in their own home w/no restrictions. There will still be buyers who are not necessarily investors.

[jpinpb]

Even if property value does not increase for 95 years, some people will buy a home not for investment purposes, but for tax purposes. Others will pass it on to their kids, grandkids. Some people don’t like to rent and want to do whatever they want in their own home w/no restrictions. There will still be buyers who are not necessarily investors.

[robson]

Spell-check is always a plus, as is Firefox 🙂
Couple things-
Not sure how accurate the data is, as it is extremely old. I would have to guess it’s probably good to within at least +/- 10% though and that’s enough to get a feel for long term trends. Anyone read Irrational Exuberance? I’m planning on it.
As far as the inflation since 1990 goes, I don’t doubt that could play a role. However, 95% of people probably trust the inflation data/aren’t aware of any change in methodology, and this is the graph/data that will continue to show up in the MSM. I think the larger significance is that data/articles of this nature are now showing up regularly in newsweek and yahoo finance. If the general perception changes from “real estate always rises” to “It takes 95 years for real estate to rise,” then housing will have a problem worse than a credit crunch. It is 1 thing for no one to be able to buy a house. It is another for no one to want to buy a house.
I mean no offense and am sure he/she is a good person, but any reasonable realtor also thinks that making a living is a good thing, and it is likely their opinion reflects this.

[robson]

Spell-check is always a plus, as is Firefox 🙂
Couple things-
Not sure how accurate the data is, as it is extremely old. I would have to guess it’s probably good to within at least +/- 10% though and that’s enough to get a feel for long term trends. Anyone read Irrational Exuberance? I’m planning on it.
As far as the inflation since 1990 goes, I don’t doubt that could play a role. However, 95% of people probably trust the inflation data/aren’t aware of any change in methodology, and this is the graph/data that will continue to show up in the MSM. I think the larger significance is that data/articles of this nature are now showing up regularly in newsweek and yahoo finance. If the general perception changes from “real estate always rises” to “It takes 95 years for real estate to rise,” then housing will have a problem worse than a credit crunch. It is 1 thing for no one to be able to buy a house. It is another for no one to want to buy a house.
I mean no offense and am sure he/she is a good person, but any reasonable realtor also thinks that making a living is a good thing, and it is likely their opinion reflects this.

[robson]

Spell-check is always a plus, as is Firefox 🙂
Couple things-
Not sure how accurate the data is, as it is extremely old. I would have to guess it’s probably good to within at least +/- 10% though and that’s enough to get a feel for long term trends. Anyone read Irrational Exuberance? I’m planning on it.
As far as the inflation since 1990 goes, I don’t doubt that could play a role. However, 95% of people probably trust the inflation data/aren’t aware of any change in methodology, and this is the graph/data that will continue to show up in the MSM. I think the larger significance is that data/articles of this nature are now showing up regularly in newsweek and yahoo finance. If the general perception changes from “real estate always rises” to “It takes 95 years for real estate to rise,” then housing will have a problem worse than a credit crunch. It is 1 thing for no one to be able to buy a house. It is another for no one to want to buy a house.
I mean no offense and am sure he/she is a good person, but any reasonable realtor also thinks that making a living is a good thing, and it is likely their opinion reflects this.

[robson]

Spell-check is always a plus, as is Firefox 🙂
Couple things-
Not sure how accurate the data is, as it is extremely old. I would have to guess it’s probably good to within at least +/- 10% though and that’s enough to get a feel for long term trends. Anyone read Irrational Exuberance? I’m planning on it.
As far as the inflation since 1990 goes, I don’t doubt that could play a role. However, 95% of people probably trust the inflation data/aren’t aware of any change in methodology, and this is the graph/data that will continue to show up in the MSM. I think the larger significance is that data/articles of this nature are now showing up regularly in newsweek and yahoo finance. If the general perception changes from “real estate always rises” to “It takes 95 years for real estate to rise,” then housing will have a problem worse than a credit crunch. It is 1 thing for no one to be able to buy a house. It is another for no one to want to buy a house.
I mean no offense and am sure he/she is a good person, but any reasonable realtor also thinks that making a living is a good thing, and it is likely their opinion reflects this.

[Navydoc]

“My realtor – a reasonable person – thinks by summer prices stabilize.”

I would only agree with this if they stabilize 35-40% lower than they are now. Affordability in an era without ludicrous financing keeps rearing its ugly head. There simply is no way prices are going to fall this quickly.

By the way, this is the best thread this forum has had for about a month now. Nice to see discussions like this again.

OT: Did you guys know that if you use Mozilla Firefox as your browser it gives you a spell-check on this forum? Awesome!

[Navydoc]

“My realtor – a reasonable person – thinks by summer prices stabilize.”

I would only agree with this if they stabilize 35-40% lower than they are now. Affordability in an era without ludicrous financing keeps rearing its ugly head. There simply is no way prices are going to fall this quickly.

By the way, this is the best thread this forum has had for about a month now. Nice to see discussions like this again.

OT: Did you guys know that if you use Mozilla Firefox as your browser it gives you a spell-check on this forum? Awesome!

[Navydoc]

“My realtor – a reasonable person – thinks by summer prices stabilize.”

I would only agree with this if they stabilize 35-40% lower than they are now. Affordability in an era without ludicrous financing keeps rearing its ugly head. There simply is no way prices are going to fall this quickly.

By the way, this is the best thread this forum has had for about a month now. Nice to see discussions like this again.

OT: Did you guys know that if you use Mozilla Firefox as your browser it gives you a spell-check on this forum? Awesome!

[Navydoc]

“My realtor – a reasonable person – thinks by summer prices stabilize.”

I would only agree with this if they stabilize 35-40% lower than they are now. Affordability in an era without ludicrous financing keeps rearing its ugly head. There simply is no way prices are going to fall this quickly.

By the way, this is the best thread this forum has had for about a month now. Nice to see discussions like this again.

OT: Did you guys know that if you use Mozilla Firefox as your browser it gives you a spell-check on this forum? Awesome!

[paramount]

My realtor – a reasonable person – thinks by summer prices stabilize.

[paramount]

My realtor – a reasonable person – thinks by summer prices stabilize.

[paramount]

My realtor – a reasonable person – thinks by summer prices stabilize.

[paramount]

My realtor – a reasonable person – thinks by summer prices stabilize.

[sdrealtor]

agreed Russ.

BTW, I dotn think ti will take 25 years to shake out, 2 more years is more like IMO.

[sdrealtor]

agreed Russ.

BTW, I dotn think ti will take 25 years to shake out, 2 more years is more like IMO.

[sdrealtor]

agreed Russ.

BTW, I dotn think ti will take 25 years to shake out, 2 more years is more like IMO.

[sdrealtor]

agreed Russ.

BTW, I dotn think ti will take 25 years to shake out, 2 more years is more like IMO.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[kev374]

Are you of the belief this market will never recover?

Yes, in my opinion it’s highly unlikely that the market will ever recover within the next 25 years to the levels we have seen. This has been a great aberration that took the home price/income ratio to astronomical levels never seen in the history of the United States.

Facts:
– Income growth is negative due to global wage arbitrage

– Liquidity is gone, Fed just cannot keep inflating money

– Loose lending is no more and is not coming back!

– Cost of living is going up putting even more pressure on home affordability, contrary to what many think, inflation negatively impacts home prices not positively. If your groceries, oil, transporation, utilities, insurance etc. cost more then you have to live in a cheaper house! It is *income inflation* that positively affects home prices, not headline inflation which has a negative effect.

This bodes much worse for housing. Since housing affordability is closely tied to income, so this will impact the long term trend negatively.

And the argument that rich businessmen (local or foreign) with suitcases of cash are buying up all the houses in OC is just absolutely ridiculous!

[HLS]

KEV,
I’m not sure how old you are or how long you’ve been around So Cal RE, but you are right on.

The ONLY reason that the housing bubble inflated was that the govt “allowed” 100% stated income financing.
They allowed it because it was “good for the economy”
We would probably have gone into a depression after the dot com crash and 9-11 if rates hadn’t been lowered

It wasn’t Greenspan, and it wasn’t the low interest rates, it was NO DOWN payments to anyone with a pulse.

We are headed back to a situation where you need a 10% down payment, and low interest rates. When the prices get back down to reality the markets will stabilize.

The financing in 2002-2006 was stupid.
The house prices between 2002-2006 became stupid.

You cannot have stupid market prices without stupid financing, and the stupid financing is gone FOREVER.

[HLS]

KEV,
I’m not sure how old you are or how long you’ve been around So Cal RE, but you are right on.

The ONLY reason that the housing bubble inflated was that the govt “allowed” 100% stated income financing.
They allowed it because it was “good for the economy”
We would probably have gone into a depression after the dot com crash and 9-11 if rates hadn’t been lowered

It wasn’t Greenspan, and it wasn’t the low interest rates, it was NO DOWN payments to anyone with a pulse.

We are headed back to a situation where you need a 10% down payment, and low interest rates. When the prices get back down to reality the markets will stabilize.

The financing in 2002-2006 was stupid.
The house prices between 2002-2006 became stupid.

You cannot have stupid market prices without stupid financing, and the stupid financing is gone FOREVER.

[HLS]

KEV,
I’m not sure how old you are or how long you’ve been around So Cal RE, but you are right on.

The ONLY reason that the housing bubble inflated was that the govt “allowed” 100% stated income financing.
They allowed it because it was “good for the economy”
We would probably have gone into a depression after the dot com crash and 9-11 if rates hadn’t been lowered

It wasn’t Greenspan, and it wasn’t the low interest rates, it was NO DOWN payments to anyone with a pulse.

We are headed back to a situation where you need a 10% down payment, and low interest rates. When the prices get back down to reality the markets will stabilize.

The financing in 2002-2006 was stupid.
The house prices between 2002-2006 became stupid.

You cannot have stupid market prices without stupid financing, and the stupid financing is gone FOREVER.

[HLS]

KEV,
I’m not sure how old you are or how long you’ve been around So Cal RE, but you are right on.

The ONLY reason that the housing bubble inflated was that the govt “allowed” 100% stated income financing.
They allowed it because it was “good for the economy”
We would probably have gone into a depression after the dot com crash and 9-11 if rates hadn’t been lowered

It wasn’t Greenspan, and it wasn’t the low interest rates, it was NO DOWN payments to anyone with a pulse.

We are headed back to a situation where you need a 10% down payment, and low interest rates. When the prices get back down to reality the markets will stabilize.

The financing in 2002-2006 was stupid.
The house prices between 2002-2006 became stupid.

You cannot have stupid market prices without stupid financing, and the stupid financing is gone FOREVER.

[HLS]

KEV,
I’m not sure how old you are or how long you’ve been around So Cal RE, but you are right on.

The ONLY reason that the housing bubble inflated was that the govt “allowed” 100% stated income financing.
They allowed it because it was “good for the economy”
We would probably have gone into a depression after the dot com crash and 9-11 if rates hadn’t been lowered

It wasn’t Greenspan, and it wasn’t the low interest rates, it was NO DOWN payments to anyone with a pulse.

We are headed back to a situation where you need a 10% down payment, and low interest rates. When the prices get back down to reality the markets will stabilize.

The financing in 2002-2006 was stupid.
The house prices between 2002-2006 became stupid.

You cannot have stupid market prices without stupid financing, and the stupid financing is gone FOREVER.

[patientlywaiting]

Also consider the Baby Boomers who are retiring and facing enormous medical bills. They will have to sell and scale back.

There’s a WSJ article on “Why Baby Boomers May Bust the Housing Market.”
http://blogs.wsj.com/developments/2008/01/16/why-baby-boomers-may-bust-the-housing-market/

[patientlywaiting]

Also consider the Baby Boomers who are retiring and facing enormous medical bills. They will have to sell and scale back.

There’s a WSJ article on “Why Baby Boomers May Bust the Housing Market.”
http://blogs.wsj.com/developments/2008/01/16/why-baby-boomers-may-bust-the-housing-market/

[patientlywaiting]

Also consider the Baby Boomers who are retiring and facing enormous medical bills. They will have to sell and scale back.

There’s a WSJ article on “Why Baby Boomers May Bust the Housing Market.”
http://blogs.wsj.com/developments/2008/01/16/why-baby-boomers-may-bust-the-housing-market/

[patientlywaiting]

Also consider the Baby Boomers who are retiring and facing enormous medical bills. They will have to sell and scale back.

There’s a WSJ article on “Why Baby Boomers May Bust the Housing Market.”
http://blogs.wsj.com/developments/2008/01/16/why-baby-boomers-may-bust-the-housing-market/

[patientlywaiting]

Also consider the Baby Boomers who are retiring and facing enormous medical bills. They will have to sell and scale back.

There’s a WSJ article on “Why Baby Boomers May Bust the Housing Market.”
http://blogs.wsj.com/developments/2008/01/16/why-baby-boomers-may-bust-the-housing-market/

[jpinpb]

The real estate cycle is difficult for me to understand. HLS says the psychology of people has a hand in this. If that’s the case, then the lowering of interest rates and raising of jumbo loans and tax rebates should instill confidence in buyers and w/in the next few months, people may go shopping again, would stand to reason.

HLS says, “Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.”

Then what’s to stop that from continuing? The next group saves people and on and on.

I’m ok w/prices coming down b/c I would like to buy a house again. I didn’t want to do it w/trick loans, although now I’m kicking myself for not gambling, since it was free money and the gov. is willing to intervene to save people and banks.

It’s frustrating. I’m trying to do the right thing and not go in over my head and think of the future and the rules are being changed and no one is really playing fair.

Why wouldn’t we have another cycle? What are the reasons that wouldn’t happen. I don’t think we are entitled. I work hard to achieve goals.

Why is it ridiculous to think rich businessmen or foreigners are buying places in San Diego? Irvine company has done that w/apartments and our dollar is so weak compared to the Euro, foreigners can very easily buy places here.

Just scared b/c I don’t want a McMansion. I just want a little place I can call my own and it seems to be so out of reach no matter our hard I try.

If the interest rate is lowered and jumbo loan limit increased and government backing Fannie and Freddie Mac, then why say loose lending is no more. Sounds incredible that they would be so foolish to give money away again, but it almost seems like that’s where they’re heading.

I understand cost of living is going up. I already thought that would impact the economy when in the last several years the price per barrel of oil shot from 50 to $100. And yet, the price of homes continued to rise.

[HLS]

JP,
Affordability is needed to bring the reality back.

You need to understand markets and bubbles, regardless of the product involved. The bubble bursts, and people are in denial all the way down, basing their perception on the peak prices.

Houses were never really worth what they were selling for.
It was greed that kept many people from selling in 2004-05, they wanted more.

It was 100% financing that fueled the mania, nothing more.

There are over 18,500 properties for sale in SD county this week, and over 50,000 in Riverside.

In December, about 1500 sold, about 8% of what is listed for sale in SD. There are thousands of other houses that people would gladly sell today, if only they could get the unrealistic price that they have in their mind.

It looks like January sales are 50% REO/lender owned, meaning that the public is being totally unrealistic about their asking prices.

As of today, most people are completely in fantasyland about the real value of their house today. If they HAD to sell it, it’s probably worth 25%-30% than they think, and will probably be worth less next year.

Nobody HAS TO buy a house, people want to buy.
Some people HAVE TO sell a house, and can only get what it is worth in today’s market.

I’m in the mortgage business. I see the real messes that some people are in. I hear the horror stories.

Many people who want to buy today simply do not qualify.

If conforming loan limits do get raised, everybody already assumes that pricing will be the same as today’s conforming amount. I don’t know if that is true.

For people who do qualify, they may just get cheaper loans. People who don’t qualify, still won’t qualify for a $600K loan.

The govt is willing to try ANYTHING to keep the house of cards from collapsing. Their concern is the economy, not the homeowner.

When a lender says that they want to help the “homeowner” stay in their house, it’s a lie. They really want to keep from having another foreclosure that they will lose money on.

If they were truly trying to help the public, they would make people realize that the best thing for many people is to walk away, after 6 mos + of no payments, and saving up some money.

Instead of being in debt for $600K on a home worth $450K today, they can go rent for much less than their ownership payment, and probably buy a similar property back in several years for $300K.

That won’t be good for the economy.

[HLS]

JP,
Affordability is needed to bring the reality back.

You need to understand markets and bubbles, regardless of the product involved. The bubble bursts, and people are in denial all the way down, basing their perception on the peak prices.

Houses were never really worth what they were selling for.
It was greed that kept many people from selling in 2004-05, they wanted more.

It was 100% financing that fueled the mania, nothing more.

There are over 18,500 properties for sale in SD county this week, and over 50,000 in Riverside.

In December, about 1500 sold, about 8% of what is listed for sale in SD. There are thousands of other houses that people would gladly sell today, if only they could get the unrealistic price that they have in their mind.

It looks like January sales are 50% REO/lender owned, meaning that the public is being totally unrealistic about their asking prices.

As of today, most people are completely in fantasyland about the real value of their house today. If they HAD to sell it, it’s probably worth 25%-30% than they think, and will probably be worth less next year.

Nobody HAS TO buy a house, people want to buy.
Some people HAVE TO sell a house, and can only get what it is worth in today’s market.

I’m in the mortgage business. I see the real messes that some people are in. I hear the horror stories.

Many people who want to buy today simply do not qualify.

If conforming loan limits do get raised, everybody already assumes that pricing will be the same as today’s conforming amount. I don’t know if that is true.

For people who do qualify, they may just get cheaper loans. People who don’t qualify, still won’t qualify for a $600K loan.

The govt is willing to try ANYTHING to keep the house of cards from collapsing. Their concern is the economy, not the homeowner.

When a lender says that they want to help the “homeowner” stay in their house, it’s a lie. They really want to keep from having another foreclosure that they will lose money on.

If they were truly trying to help the public, they would make people realize that the best thing for many people is to walk away, after 6 mos + of no payments, and saving up some money.

Instead of being in debt for $600K on a home worth $450K today, they can go rent for much less than their ownership payment, and probably buy a similar property back in several years for $300K.

That won’t be good for the economy.

[HLS]

JP,
Affordability is needed to bring the reality back.

You need to understand markets and bubbles, regardless of the product involved. The bubble bursts, and people are in denial all the way down, basing their perception on the peak prices.

Houses were never really worth what they were selling for.
It was greed that kept many people from selling in 2004-05, they wanted more.

It was 100% financing that fueled the mania, nothing more.

There are over 18,500 properties for sale in SD county this week, and over 50,000 in Riverside.

In December, about 1500 sold, about 8% of what is listed for sale in SD. There are thousands of other houses that people would gladly sell today, if only they could get the unrealistic price that they have in their mind.

It looks like January sales are 50% REO/lender owned, meaning that the public is being totally unrealistic about their asking prices.

As of today, most people are completely in fantasyland about the real value of their house today. If they HAD to sell it, it’s probably worth 25%-30% than they think, and will probably be worth less next year.

Nobody HAS TO buy a house, people want to buy.
Some people HAVE TO sell a house, and can only get what it is worth in today’s market.

I’m in the mortgage business. I see the real messes that some people are in. I hear the horror stories.

Many people who want to buy today simply do not qualify.

If conforming loan limits do get raised, everybody already assumes that pricing will be the same as today’s conforming amount. I don’t know if that is true.

For people who do qualify, they may just get cheaper loans. People who don’t qualify, still won’t qualify for a $600K loan.

The govt is willing to try ANYTHING to keep the house of cards from collapsing. Their concern is the economy, not the homeowner.

When a lender says that they want to help the “homeowner” stay in their house, it’s a lie. They really want to keep from having another foreclosure that they will lose money on.

If they were truly trying to help the public, they would make people realize that the best thing for many people is to walk away, after 6 mos + of no payments, and saving up some money.

Instead of being in debt for $600K on a home worth $450K today, they can go rent for much less than their ownership payment, and probably buy a similar property back in several years for $300K.

That won’t be good for the economy.

[HLS]

JP,
Affordability is needed to bring the reality back.

You need to understand markets and bubbles, regardless of the product involved. The bubble bursts, and people are in denial all the way down, basing their perception on the peak prices.

Houses were never really worth what they were selling for.
It was greed that kept many people from selling in 2004-05, they wanted more.

It was 100% financing that fueled the mania, nothing more.

There are over 18,500 properties for sale in SD county this week, and over 50,000 in Riverside.

In December, about 1500 sold, about 8% of what is listed for sale in SD. There are thousands of other houses that people would gladly sell today, if only they could get the unrealistic price that they have in their mind.

It looks like January sales are 50% REO/lender owned, meaning that the public is being totally unrealistic about their asking prices.

As of today, most people are completely in fantasyland about the real value of their house today. If they HAD to sell it, it’s probably worth 25%-30% than they think, and will probably be worth less next year.

Nobody HAS TO buy a house, people want to buy.
Some people HAVE TO sell a house, and can only get what it is worth in today’s market.

I’m in the mortgage business. I see the real messes that some people are in. I hear the horror stories.

Many people who want to buy today simply do not qualify.

If conforming loan limits do get raised, everybody already assumes that pricing will be the same as today’s conforming amount. I don’t know if that is true.

For people who do qualify, they may just get cheaper loans. People who don’t qualify, still won’t qualify for a $600K loan.

The govt is willing to try ANYTHING to keep the house of cards from collapsing. Their concern is the economy, not the homeowner.

When a lender says that they want to help the “homeowner” stay in their house, it’s a lie. They really want to keep from having another foreclosure that they will lose money on.

If they were truly trying to help the public, they would make people realize that the best thing for many people is to walk away, after 6 mos + of no payments, and saving up some money.

Instead of being in debt for $600K on a home worth $450K today, they can go rent for much less than their ownership payment, and probably buy a similar property back in several years for $300K.

That won’t be good for the economy.

[HLS]

JP,
Affordability is needed to bring the reality back.

You need to understand markets and bubbles, regardless of the product involved. The bubble bursts, and people are in denial all the way down, basing their perception on the peak prices.

Houses were never really worth what they were selling for.
It was greed that kept many people from selling in 2004-05, they wanted more.

It was 100% financing that fueled the mania, nothing more.

There are over 18,500 properties for sale in SD county this week, and over 50,000 in Riverside.

In December, about 1500 sold, about 8% of what is listed for sale in SD. There are thousands of other houses that people would gladly sell today, if only they could get the unrealistic price that they have in their mind.

It looks like January sales are 50% REO/lender owned, meaning that the public is being totally unrealistic about their asking prices.

As of today, most people are completely in fantasyland about the real value of their house today. If they HAD to sell it, it’s probably worth 25%-30% than they think, and will probably be worth less next year.

Nobody HAS TO buy a house, people want to buy.
Some people HAVE TO sell a house, and can only get what it is worth in today’s market.

I’m in the mortgage business. I see the real messes that some people are in. I hear the horror stories.

Many people who want to buy today simply do not qualify.

If conforming loan limits do get raised, everybody already assumes that pricing will be the same as today’s conforming amount. I don’t know if that is true.

For people who do qualify, they may just get cheaper loans. People who don’t qualify, still won’t qualify for a $600K loan.

The govt is willing to try ANYTHING to keep the house of cards from collapsing. Their concern is the economy, not the homeowner.

When a lender says that they want to help the “homeowner” stay in their house, it’s a lie. They really want to keep from having another foreclosure that they will lose money on.

If they were truly trying to help the public, they would make people realize that the best thing for many people is to walk away, after 6 mos + of no payments, and saving up some money.

Instead of being in debt for $600K on a home worth $450K today, they can go rent for much less than their ownership payment, and probably buy a similar property back in several years for $300K.

That won’t be good for the economy.

[jpinpb]

The real estate cycle is difficult for me to understand. HLS says the psychology of people has a hand in this. If that’s the case, then the lowering of interest rates and raising of jumbo loans and tax rebates should instill confidence in buyers and w/in the next few months, people may go shopping again, would stand to reason.

HLS says, “Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.”

Then what’s to stop that from continuing? The next group saves people and on and on.

I’m ok w/prices coming down b/c I would like to buy a house again. I didn’t want to do it w/trick loans, although now I’m kicking myself for not gambling, since it was free money and the gov. is willing to intervene to save people and banks.

It’s frustrating. I’m trying to do the right thing and not go in over my head and think of the future and the rules are being changed and no one is really playing fair.

Why wouldn’t we have another cycle? What are the reasons that wouldn’t happen. I don’t think we are entitled. I work hard to achieve goals.

Why is it ridiculous to think rich businessmen or foreigners are buying places in San Diego? Irvine company has done that w/apartments and our dollar is so weak compared to the Euro, foreigners can very easily buy places here.

Just scared b/c I don’t want a McMansion. I just want a little place I can call my own and it seems to be so out of reach no matter our hard I try.

If the interest rate is lowered and jumbo loan limit increased and government backing Fannie and Freddie Mac, then why say loose lending is no more. Sounds incredible that they would be so foolish to give money away again, but it almost seems like that’s where they’re heading.

I understand cost of living is going up. I already thought that would impact the economy when in the last several years the price per barrel of oil shot from 50 to $100. And yet, the price of homes continued to rise.

[jpinpb]

The real estate cycle is difficult for me to understand. HLS says the psychology of people has a hand in this. If that’s the case, then the lowering of interest rates and raising of jumbo loans and tax rebates should instill confidence in buyers and w/in the next few months, people may go shopping again, would stand to reason.

HLS says, “Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.”

Then what’s to stop that from continuing? The next group saves people and on and on.

I’m ok w/prices coming down b/c I would like to buy a house again. I didn’t want to do it w/trick loans, although now I’m kicking myself for not gambling, since it was free money and the gov. is willing to intervene to save people and banks.

It’s frustrating. I’m trying to do the right thing and not go in over my head and think of the future and the rules are being changed and no one is really playing fair.

Why wouldn’t we have another cycle? What are the reasons that wouldn’t happen. I don’t think we are entitled. I work hard to achieve goals.

Why is it ridiculous to think rich businessmen or foreigners are buying places in San Diego? Irvine company has done that w/apartments and our dollar is so weak compared to the Euro, foreigners can very easily buy places here.

Just scared b/c I don’t want a McMansion. I just want a little place I can call my own and it seems to be so out of reach no matter our hard I try.

If the interest rate is lowered and jumbo loan limit increased and government backing Fannie and Freddie Mac, then why say loose lending is no more. Sounds incredible that they would be so foolish to give money away again, but it almost seems like that’s where they’re heading.

I understand cost of living is going up. I already thought that would impact the economy when in the last several years the price per barrel of oil shot from 50 to $100. And yet, the price of homes continued to rise.

[jpinpb]

The real estate cycle is difficult for me to understand. HLS says the psychology of people has a hand in this. If that’s the case, then the lowering of interest rates and raising of jumbo loans and tax rebates should instill confidence in buyers and w/in the next few months, people may go shopping again, would stand to reason.

HLS says, “Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.”

Then what’s to stop that from continuing? The next group saves people and on and on.

I’m ok w/prices coming down b/c I would like to buy a house again. I didn’t want to do it w/trick loans, although now I’m kicking myself for not gambling, since it was free money and the gov. is willing to intervene to save people and banks.

It’s frustrating. I’m trying to do the right thing and not go in over my head and think of the future and the rules are being changed and no one is really playing fair.

Why wouldn’t we have another cycle? What are the reasons that wouldn’t happen. I don’t think we are entitled. I work hard to achieve goals.

Why is it ridiculous to think rich businessmen or foreigners are buying places in San Diego? Irvine company has done that w/apartments and our dollar is so weak compared to the Euro, foreigners can very easily buy places here.

Just scared b/c I don’t want a McMansion. I just want a little place I can call my own and it seems to be so out of reach no matter our hard I try.

If the interest rate is lowered and jumbo loan limit increased and government backing Fannie and Freddie Mac, then why say loose lending is no more. Sounds incredible that they would be so foolish to give money away again, but it almost seems like that’s where they’re heading.

I understand cost of living is going up. I already thought that would impact the economy when in the last several years the price per barrel of oil shot from 50 to $100. And yet, the price of homes continued to rise.

[jpinpb]

The real estate cycle is difficult for me to understand. HLS says the psychology of people has a hand in this. If that’s the case, then the lowering of interest rates and raising of jumbo loans and tax rebates should instill confidence in buyers and w/in the next few months, people may go shopping again, would stand to reason.

HLS says, “Anybody who buys a house today is helping to clean up that mess and saving somebody else the trouble.”

Then what’s to stop that from continuing? The next group saves people and on and on.

I’m ok w/prices coming down b/c I would like to buy a house again. I didn’t want to do it w/trick loans, although now I’m kicking myself for not gambling, since it was free money and the gov. is willing to intervene to save people and banks.

It’s frustrating. I’m trying to do the right thing and not go in over my head and think of the future and the rules are being changed and no one is really playing fair.

Why wouldn’t we have another cycle? What are the reasons that wouldn’t happen. I don’t think we are entitled. I work hard to achieve goals.

Why is it ridiculous to think rich businessmen or foreigners are buying places in San Diego? Irvine company has done that w/apartments and our dollar is so weak compared to the Euro, foreigners can very easily buy places here.

Just scared b/c I don’t want a McMansion. I just want a little place I can call my own and it seems to be so out of reach no matter our hard I try.

If the interest rate is lowered and jumbo loan limit increased and government backing Fannie and Freddie Mac, then why say loose lending is no more. Sounds incredible that they would be so foolish to give money away again, but it almost seems like that’s where they’re heading.

I understand cost of living is going up. I already thought that would impact the economy when in the last several years the price per barrel of oil shot from 50 to $100. And yet, the price of homes continued to rise.

[kev374]

Are you of the belief this market will never recover?

Yes, in my opinion it’s highly unlikely that the market will ever recover within the next 25 years to the levels we have seen. This has been a great aberration that took the home price/income ratio to astronomical levels never seen in the history of the United States.

Facts:
– Income growth is negative due to global wage arbitrage

– Liquidity is gone, Fed just cannot keep inflating money

– Loose lending is no more and is not coming back!

– Cost of living is going up putting even more pressure on home affordability, contrary to what many think, inflation negatively impacts home prices not positively. If your groceries, oil, transporation, utilities, insurance etc. cost more then you have to live in a cheaper house! It is *income inflation* that positively affects home prices, not headline inflation which has a negative effect.

This bodes much worse for housing. Since housing affordability is closely tied to income, so this will impact the long term trend negatively.

And the argument that rich businessmen (local or foreign) with suitcases of cash are buying up all the houses in OC is just absolutely ridiculous!

[kev374]

Are you of the belief this market will never recover?

Yes, in my opinion it’s highly unlikely that the market will ever recover within the next 25 years to the levels we have seen. This has been a great aberration that took the home price/income ratio to astronomical levels never seen in the history of the United States.

Facts:
– Income growth is negative due to global wage arbitrage

– Liquidity is gone, Fed just cannot keep inflating money

– Loose lending is no more and is not coming back!

– Cost of living is going up putting even more pressure on home affordability, contrary to what many think, inflation negatively impacts home prices not positively. If your groceries, oil, transporation, utilities, insurance etc. cost more then you have to live in a cheaper house! It is *income inflation* that positively affects home prices, not headline inflation which has a negative effect.

This bodes much worse for housing. Since housing affordability is closely tied to income, so this will impact the long term trend negatively.

And the argument that rich businessmen (local or foreign) with suitcases of cash are buying up all the houses in OC is just absolutely ridiculous!

[kev374]

Are you of the belief this market will never recover?

Yes, in my opinion it’s highly unlikely that the market will ever recover within the next 25 years to the levels we have seen. This has been a great aberration that took the home price/income ratio to astronomical levels never seen in the history of the United States.

Facts:
– Income growth is negative due to global wage arbitrage

– Liquidity is gone, Fed just cannot keep inflating money

– Loose lending is no more and is not coming back!

– Cost of living is going up putting even more pressure on home affordability, contrary to what many think, inflation negatively impacts home prices not positively. If your groceries, oil, transporation, utilities, insurance etc. cost more then you have to live in a cheaper house! It is *income inflation* that positively affects home prices, not headline inflation which has a negative effect.

This bodes much worse for housing. Since housing affordability is closely tied to income, so this will impact the long term trend negatively.

And the argument that rich businessmen (local or foreign) with suitcases of cash are buying up all the houses in OC is just absolutely ridiculous!

[kev374]

Are you of the belief this market will never recover?

Yes, in my opinion it’s highly unlikely that the market will ever recover within the next 25 years to the levels we have seen. This has been a great aberration that took the home price/income ratio to astronomical levels never seen in the history of the United States.

Facts:
– Income growth is negative due to global wage arbitrage

– Liquidity is gone, Fed just cannot keep inflating money

– Loose lending is no more and is not coming back!

– Cost of living is going up putting even more pressure on home affordability, contrary to what many think, inflation negatively impacts home prices not positively. If your groceries, oil, transporation, utilities, insurance etc. cost more then you have to live in a cheaper house! It is *income inflation* that positively affects home prices, not headline inflation which has a negative effect.

This bodes much worse for housing. Since housing affordability is closely tied to income, so this will impact the long term trend negatively.

And the argument that rich businessmen (local or foreign) with suitcases of cash are buying up all the houses in OC is just absolutely ridiculous!

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[jpinpb]

I owned a house in the previous boom. I tried to sell it in ’93. For a year it sat on the market, the length of the listing, w/not one offer. I didn’t ask anymore than I paid for it when I bought it a few years earlier.

I didn’t need a newspaper to tell me the market changed. I took it off the market and didn’t put it back on until many years later when the market picked up again.

These people are in serious denial. They need to wake up and smell the coffee. The flipping days are over. I say, if you can take riding it out, take it off the market and stop trying to sell something unsellable at a ridiculous price. All they’re doing is flooding the market w/inventory.

IMHO, there is less demand b/c of less qualified buyers. And those that are qualified (I’m one) are looking for a bargain. There are a lot of desperate people out there. More defaults and foreclosures on the way bringing down comps.

[jpinpb]

I owned a house in the previous boom. I tried to sell it in ’93. For a year it sat on the market, the length of the listing, w/not one offer. I didn’t ask anymore than I paid for it when I bought it a few years earlier.

I didn’t need a newspaper to tell me the market changed. I took it off the market and didn’t put it back on until many years later when the market picked up again.

These people are in serious denial. They need to wake up and smell the coffee. The flipping days are over. I say, if you can take riding it out, take it off the market and stop trying to sell something unsellable at a ridiculous price. All they’re doing is flooding the market w/inventory.

IMHO, there is less demand b/c of less qualified buyers. And those that are qualified (I’m one) are looking for a bargain. There are a lot of desperate people out there. More defaults and foreclosures on the way bringing down comps.

[jpinpb]

I owned a house in the previous boom. I tried to sell it in ’93. For a year it sat on the market, the length of the listing, w/not one offer. I didn’t ask anymore than I paid for it when I bought it a few years earlier.

I didn’t need a newspaper to tell me the market changed. I took it off the market and didn’t put it back on until many years later when the market picked up again.

These people are in serious denial. They need to wake up and smell the coffee. The flipping days are over. I say, if you can take riding it out, take it off the market and stop trying to sell something unsellable at a ridiculous price. All they’re doing is flooding the market w/inventory.

IMHO, there is less demand b/c of less qualified buyers. And those that are qualified (I’m one) are looking for a bargain. There are a lot of desperate people out there. More defaults and foreclosures on the way bringing down comps.

[jpinpb]

I owned a house in the previous boom. I tried to sell it in ’93. For a year it sat on the market, the length of the listing, w/not one offer. I didn’t ask anymore than I paid for it when I bought it a few years earlier.

I didn’t need a newspaper to tell me the market changed. I took it off the market and didn’t put it back on until many years later when the market picked up again.

These people are in serious denial. They need to wake up and smell the coffee. The flipping days are over. I say, if you can take riding it out, take it off the market and stop trying to sell something unsellable at a ridiculous price. All they’re doing is flooding the market w/inventory.

IMHO, there is less demand b/c of less qualified buyers. And those that are qualified (I’m one) are looking for a bargain. There are a lot of desperate people out there. More defaults and foreclosures on the way bringing down comps.

[jpinpb]

That was a great article. I enjoyed reading it. I think the best part was the way they ended it: “The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think some newspapers here have to adopt that attitude.

[jpinpb]

That was a great article. I enjoyed reading it. I think the best part was the way they ended it: “The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think some newspapers here have to adopt that attitude.

[jpinpb]

That was a great article. I enjoyed reading it. I think the best part was the way they ended it: “The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think some newspapers here have to adopt that attitude.

[jpinpb]

That was a great article. I enjoyed reading it. I think the best part was the way they ended it: “The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think some newspapers here have to adopt that attitude.

[jpinpb]

That was a great article. I enjoyed reading it. I think the best part was the way they ended it: “The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think some newspapers here have to adopt that attitude.

[jpinpb]

I would think that the biggest impact on this real estate cycle is employment, at least in So. Cal.

We had Bill Clinton pass the no capital gains tax on $250k for individuals and $500k for couples and rates were decreased. That was the shot in the arm.

Then we had the tech boom and dotcom jobs. When that bubble burst, we had job losses. Manufacturing, outsourcing, tech, telephone sales, etc. etc. We already compete w/those who will work for less from neighboring countries.

Then what really pushed the real estate boom was the free money, I agree. It was the domino effect from that b/c it created jobs overnight: realtors, brokers, loan officers, appraisers and the endless list of construction jobs. All these jobs paid pretty well and that trinkled back into the economy in the retail sector, Home Depot, Lowes, into restaurants. People homes went up in value. The increase was equivalent and correlated to how low the interest rate was, the teaser rate, to be exact.

This false equity was taken out by people and cars were purchased and credit cards were paid off (and run back up again) and trips were taken and trillions were pumped back into the economy.

I understand all this. With the slowing of real estate, the factor that will really hurt the most is the job losses. Service and tourism related jobs don’t pay that well. Good paying jobs require retraining/schooling – time.

The stock market bubble burst quickly. You can sell stocks immediately. Even though some were reluctant and held on until the company went under. Real estate takes time to sell, dragging this out further.

Yet economists are predicting by the end of 2008 the market will stablize. I don’t know what to think anymore or who to believe. My head is spinning.

[jpinpb]

I would think that the biggest impact on this real estate cycle is employment, at least in So. Cal.

We had Bill Clinton pass the no capital gains tax on $250k for individuals and $500k for couples and rates were decreased. That was the shot in the arm.

Then we had the tech boom and dotcom jobs. When that bubble burst, we had job losses. Manufacturing, outsourcing, tech, telephone sales, etc. etc. We already compete w/those who will work for less from neighboring countries.

Then what really pushed the real estate boom was the free money, I agree. It was the domino effect from that b/c it created jobs overnight: realtors, brokers, loan officers, appraisers and the endless list of construction jobs. All these jobs paid pretty well and that trinkled back into the economy in the retail sector, Home Depot, Lowes, into restaurants. People homes went up in value. The increase was equivalent and correlated to how low the interest rate was, the teaser rate, to be exact.

This false equity was taken out by people and cars were purchased and credit cards were paid off (and run back up again) and trips were taken and trillions were pumped back into the economy.

I understand all this. With the slowing of real estate, the factor that will really hurt the most is the job losses. Service and tourism related jobs don’t pay that well. Good paying jobs require retraining/schooling – time.

The stock market bubble burst quickly. You can sell stocks immediately. Even though some were reluctant and held on until the company went under. Real estate takes time to sell, dragging this out further.

Yet economists are predicting by the end of 2008 the market will stablize. I don’t know what to think anymore or who to believe. My head is spinning.

[jpinpb]

I would think that the biggest impact on this real estate cycle is employment, at least in So. Cal.

We had Bill Clinton pass the no capital gains tax on $250k for individuals and $500k for couples and rates were decreased. That was the shot in the arm.

Then we had the tech boom and dotcom jobs. When that bubble burst, we had job losses. Manufacturing, outsourcing, tech, telephone sales, etc. etc. We already compete w/those who will work for less from neighboring countries.

Then what really pushed the real estate boom was the free money, I agree. It was the domino effect from that b/c it created jobs overnight: realtors, brokers, loan officers, appraisers and the endless list of construction jobs. All these jobs paid pretty well and that trinkled back into the economy in the retail sector, Home Depot, Lowes, into restaurants. People homes went up in value. The increase was equivalent and correlated to how low the interest rate was, the teaser rate, to be exact.

This false equity was taken out by people and cars were purchased and credit cards were paid off (and run back up again) and trips were taken and trillions were pumped back into the economy.

I understand all this. With the slowing of real estate, the factor that will really hurt the most is the job losses. Service and tourism related jobs don’t pay that well. Good paying jobs require retraining/schooling – time.

The stock market bubble burst quickly. You can sell stocks immediately. Even though some were reluctant and held on until the company went under. Real estate takes time to sell, dragging this out further.

Yet economists are predicting by the end of 2008 the market will stablize. I don’t know what to think anymore or who to believe. My head is spinning.

[jpinpb]

I would think that the biggest impact on this real estate cycle is employment, at least in So. Cal.

We had Bill Clinton pass the no capital gains tax on $250k for individuals and $500k for couples and rates were decreased. That was the shot in the arm.

Then we had the tech boom and dotcom jobs. When that bubble burst, we had job losses. Manufacturing, outsourcing, tech, telephone sales, etc. etc. We already compete w/those who will work for less from neighboring countries.

Then what really pushed the real estate boom was the free money, I agree. It was the domino effect from that b/c it created jobs overnight: realtors, brokers, loan officers, appraisers and the endless list of construction jobs. All these jobs paid pretty well and that trinkled back into the economy in the retail sector, Home Depot, Lowes, into restaurants. People homes went up in value. The increase was equivalent and correlated to how low the interest rate was, the teaser rate, to be exact.

This false equity was taken out by people and cars were purchased and credit cards were paid off (and run back up again) and trips were taken and trillions were pumped back into the economy.

I understand all this. With the slowing of real estate, the factor that will really hurt the most is the job losses. Service and tourism related jobs don’t pay that well. Good paying jobs require retraining/schooling – time.

The stock market bubble burst quickly. You can sell stocks immediately. Even though some were reluctant and held on until the company went under. Real estate takes time to sell, dragging this out further.

Yet economists are predicting by the end of 2008 the market will stablize. I don’t know what to think anymore or who to believe. My head is spinning.

[jpinpb]

I would think that the biggest impact on this real estate cycle is employment, at least in So. Cal.

We had Bill Clinton pass the no capital gains tax on $250k for individuals and $500k for couples and rates were decreased. That was the shot in the arm.

Then we had the tech boom and dotcom jobs. When that bubble burst, we had job losses. Manufacturing, outsourcing, tech, telephone sales, etc. etc. We already compete w/those who will work for less from neighboring countries.

Then what really pushed the real estate boom was the free money, I agree. It was the domino effect from that b/c it created jobs overnight: realtors, brokers, loan officers, appraisers and the endless list of construction jobs. All these jobs paid pretty well and that trinkled back into the economy in the retail sector, Home Depot, Lowes, into restaurants. People homes went up in value. The increase was equivalent and correlated to how low the interest rate was, the teaser rate, to be exact.

This false equity was taken out by people and cars were purchased and credit cards were paid off (and run back up again) and trips were taken and trillions were pumped back into the economy.

I understand all this. With the slowing of real estate, the factor that will really hurt the most is the job losses. Service and tourism related jobs don’t pay that well. Good paying jobs require retraining/schooling – time.

The stock market bubble burst quickly. You can sell stocks immediately. Even though some were reluctant and held on until the company went under. Real estate takes time to sell, dragging this out further.

Yet economists are predicting by the end of 2008 the market will stablize. I don’t know what to think anymore or who to believe. My head is spinning.

[jpinpb]

I’ve actually seen some places go back on the market w/a price increase. This is incomprehensible to me. It’s defying all logic. I’m so confused.

[jpinpb]

I’ve actually seen some places go back on the market w/a price increase. This is incomprehensible to me. It’s defying all logic. I’m so confused.

[jpinpb]

I’ve actually seen some places go back on the market w/a price increase. This is incomprehensible to me. It’s defying all logic. I’m so confused.

[jpinpb]

I’ve actually seen some places go back on the market w/a price increase. This is incomprehensible to me. It’s defying all logic. I’m so confused.

[jpinpb]

I’ve actually seen some places go back on the market w/a price increase. This is incomprehensible to me. It’s defying all logic. I’m so confused.

[jpinpb]

HLS – I have to agree that affordability is a factor. But that is also why none of this makes sense to me. The median priced home in San Diego, they say now, is $440k. I think it may be off. Whatever. The median income is something like $50k. To be fair, we’ll say the average household is a couple, so that bumps it up, one earning more, so we should say about $85k? But if we say it’s a married couple, chances are they have a kid – maybe two – added expense.

Is the median income net or gross?

Most people don’t have 5% to slap down on a house, plus the 6% realtor commission, plus closing costs, if any. We’re looking at $22k + 26 = $48k+.
Almost 50k needed to get a place.

If a house is $440k and say they were lucky to get a loan today w/zero down @ 5.5%, the payment is 2,498, adding to that prop. tax of 366, plus insurance, I’m not sure, $100 – hoping there is no HOA, we’re at $2,964. Let’s say 3k easy math.

When we add to that utilities (gas, electric, phone – cable if they’re splurging) then add food and clothing, gasoline. Shall we add car payments. Very few people know or want to drive a car into the ground. I’ve done this in my life many times, but most people don’t. Most people want a new car. The lowest car payment I’ve seen for a new car is about $150 a month. Shall we times 2 for the couple.
We’ve got to be at around $2,500 by now, thereabouts, being very conservative.

What if they have a student loan or credit card payments?

This leaves very little room at the end of the month for much else.

So how the hell are these people doing it?

Consumer spending amounts to 2/3 of our economy.

How or what incentive is there to save when interest rate keeps going down.

This whole economy is not making sense. If you do the right thing, and save and don’t go in over your head, you’re screwed and never get ahead. Catch-22.

So frustrated. Thanks for your wise words.

[HLS]

JP, stop paying attention to the “median” it’s a meaningless, misleading statistic.

People with median incomes may have no interest in living in a median priced neighborhood.
San Diego is currently in the top 10 of unaffordable cities, based on income and cost of housing ownership.

You shouldn’t have a mortgage for more than 4x-5x your gross income, depending on your other debts.

When you know how to use cash and leverage, you will never be screwed by having money.

Lenders start with your credit score. They put you into a box whether you deserve to be there or not. One late minimum credit card payment (even $20 and an hones mistake) can whack your score 30 or 40 points. Doesn’t make you a bad person, but to FNMA you just became a bigger risk if you score falls below 680.

Realtor commissions are paid by the seller through the selling price. Nobody is getting 5.50% 100% loans today, except for one possible program which may not exist anymore.

You need that down payment, you also need additional financial reserves, and you better hope that you don’t lose your job.

Why does buying a house have to equate to getting ahead ?

It’s not in the Declaration of Independence that people are entitled to afford a house.

In Europe, for generations, people have rented. They have smaller apts/homes, but many have higher standards of living, including education, culture and travel/vacations, and they work less and enjoy life more. They never own a home.

America has been duped by marketing and Wall Street.
Many people have been weaned on propaganda from the govt and the media about what is the right thing to do throughout your life, except you do it with your money, if you have any. The American dream = owning a home ?
That’s MARKETING.

Even homeless people need $5 for Starbucks now, the 50c coffee isn’t good enough anymore. We’ve become a sick society, based upon the greater fool theory.

Why don’t people buy Rolls Royces or fly first class ?
Usually because they can’t afford it; but when people couldn’t really afford to buy houses, they went ahead and bought them anyway, and now there is outrage because they are losing what they never should have bought in the first place, that they cannot afford, and the govt wants to save them ??

We NEED a huge economic correction harder than the 1930’s depression to get the country back on track.

Maybe it will happen, maybe it won’t. Those that are prepared will survive just fine.

Thank the administration for the few good boom years of the decade, there is a price to pay for the excess, corruption and greed, and the average worker will carry afair part of this burden.

Be a happy renter instead of a miserable homeowner until you are ready and can afford what you are comfortable with.

You can borrow more money than is wise for a house as a % of your income. Just because you can get approved for 55%-60% of your gross income for your debts, doesn’t mean that you have to do it.

[jpinpb]

I have some family in Italy. They own their own homes. Generally passed down through the family. They never sell.

I don’t own a home for the very reason that I could not afford one. I hope to one day afford one. I don’t have much of a choice but wait, save, limit my debt, hope prices come down to something reasonable, hope I don’t have to move out of state.

I already missed the no money down, interest only train. It made no sense. I was pressure by friends, family, realtors, and lenders. I did not want to gamble w/an interest rate that could change, even when they said I could always refinance, I kept thinking whatifs, if there is pre-payment penalty, if the value comes down even 5%, etc.

When the subprime mess hit the fan, I felt like I did the right thing. But now government coming to the rescue, I feel like I was punished for doing the right thing.

I do agree w/you that a correction is in order. Just b/c I think that or you think that, doesn’t mean it’s going to happen. I know it’s not in the Declaration that people are entitled to afford a house, but it’s nice after working hard, you can come home and say, “I’m working hard for this. It’ll be mine.” I mean, ever since people came to America, the pioneers bought land, built their cabins. It just seems like a reward for all the hard work.

I’ve owned a house before and it is a good feeling, something tangible. And I’m not even a consumer or materialistic at all. I don’t give into that. Yet, something about having your own place, though.

[NotCranky]

oops

[denverite]

I thought there was a significant qoute in the article.

“”I know you’re not supposed to say I told you so,’ but I’m at the age where I can do it: Homeownership was oversold,” says 67-year-old House Finance Committee Chairman Barney Frank (D-Mass.). ”

What, a powerful liberal Democrat, conceding this? … perhaps we won’t be subsidizing the RE bubble after all.

On a slightly different note, the News Hour held a town hall metting that consisted of San Diego bankers, mortgage brokers, realtors, speculators, counselors, and a few home owner/foreclosed individuals. I was disappointed when Gwen Ifill (softball on all subjects) provided the moderator role, but did catch the last 2/3’s of the segment. No one even mentioned the home valuation as the problem. A Pigg point of view should have been there to straighten them out. They really danced anround anything of substance, however, one participant did say that he was starting to see some PANIC in SD. I hope this is a portent of things to come.

[denverite]

I thought there was a significant qoute in the article.

“”I know you’re not supposed to say I told you so,’ but I’m at the age where I can do it: Homeownership was oversold,” says 67-year-old House Finance Committee Chairman Barney Frank (D-Mass.). ”

What, a powerful liberal Democrat, conceding this? … perhaps we won’t be subsidizing the RE bubble after all.

On a slightly different note, the News Hour held a town hall metting that consisted of San Diego bankers, mortgage brokers, realtors, speculators, counselors, and a few home owner/foreclosed individuals. I was disappointed when Gwen Ifill (softball on all subjects) provided the moderator role, but did catch the last 2/3’s of the segment. No one even mentioned the home valuation as the problem. A Pigg point of view should have been there to straighten them out. They really danced anround anything of substance, however, one participant did say that he was starting to see some PANIC in SD. I hope this is a portent of things to come.

[denverite]

I thought there was a significant qoute in the article.

“”I know you’re not supposed to say I told you so,’ but I’m at the age where I can do it: Homeownership was oversold,” says 67-year-old House Finance Committee Chairman Barney Frank (D-Mass.). ”

What, a powerful liberal Democrat, conceding this? … perhaps we won’t be subsidizing the RE bubble after all.

On a slightly different note, the News Hour held a town hall metting that consisted of San Diego bankers, mortgage brokers, realtors, speculators, counselors, and a few home owner/foreclosed individuals. I was disappointed when Gwen Ifill (softball on all subjects) provided the moderator role, but did catch the last 2/3’s of the segment. No one even mentioned the home valuation as the problem. A Pigg point of view should have been there to straighten them out. They really danced anround anything of substance, however, one participant did say that he was starting to see some PANIC in SD. I hope this is a portent of things to come.

[denverite]

I thought there was a significant qoute in the article.

“”I know you’re not supposed to say I told you so,’ but I’m at the age where I can do it: Homeownership was oversold,” says 67-year-old House Finance Committee Chairman Barney Frank (D-Mass.). ”

What, a powerful liberal Democrat, conceding this? … perhaps we won’t be subsidizing the RE bubble after all.

On a slightly different note, the News Hour held a town hall metting that consisted of San Diego bankers, mortgage brokers, realtors, speculators, counselors, and a few home owner/foreclosed individuals. I was disappointed when Gwen Ifill (softball on all subjects) provided the moderator role, but did catch the last 2/3’s of the segment. No one even mentioned the home valuation as the problem. A Pigg point of view should have been there to straighten them out. They really danced anround anything of substance, however, one participant did say that he was starting to see some PANIC in SD. I hope this is a portent of things to come.

[denverite]

I thought there was a significant qoute in the article.

“”I know you’re not supposed to say I told you so,’ but I’m at the age where I can do it: Homeownership was oversold,” says 67-year-old House Finance Committee Chairman Barney Frank (D-Mass.). ”

What, a powerful liberal Democrat, conceding this? … perhaps we won’t be subsidizing the RE bubble after all.

On a slightly different note, the News Hour held a town hall metting that consisted of San Diego bankers, mortgage brokers, realtors, speculators, counselors, and a few home owner/foreclosed individuals. I was disappointed when Gwen Ifill (softball on all subjects) provided the moderator role, but did catch the last 2/3’s of the segment. No one even mentioned the home valuation as the problem. A Pigg point of view should have been there to straighten them out. They really danced anround anything of substance, however, one participant did say that he was starting to see some PANIC in SD. I hope this is a portent of things to come.

[NotCranky]

oops

[NotCranky]

oops

[NotCranky]

oops

[NotCranky]

oops

[jpinpb]

I have some family in Italy. They own their own homes. Generally passed down through the family. They never sell.

I don’t own a home for the very reason that I could not afford one. I hope to one day afford one. I don’t have much of a choice but wait, save, limit my debt, hope prices come down to something reasonable, hope I don’t have to move out of state.

I already missed the no money down, interest only train. It made no sense. I was pressure by friends, family, realtors, and lenders. I did not want to gamble w/an interest rate that could change, even when they said I could always refinance, I kept thinking whatifs, if there is pre-payment penalty, if the value comes down even 5%, etc.

When the subprime mess hit the fan, I felt like I did the right thing. But now government coming to the rescue, I feel like I was punished for doing the right thing.

I do agree w/you that a correction is in order. Just b/c I think that or you think that, doesn’t mean it’s going to happen. I know it’s not in the Declaration that people are entitled to afford a house, but it’s nice after working hard, you can come home and say, “I’m working hard for this. It’ll be mine.” I mean, ever since people came to America, the pioneers bought land, built their cabins. It just seems like a reward for all the hard work.

I’ve owned a house before and it is a good feeling, something tangible. And I’m not even a consumer or materialistic at all. I don’t give into that. Yet, something about having your own place, though.

[jpinpb]

I have some family in Italy. They own their own homes. Generally passed down through the family. They never sell.

I don’t own a home for the very reason that I could not afford one. I hope to one day afford one. I don’t have much of a choice but wait, save, limit my debt, hope prices come down to something reasonable, hope I don’t have to move out of state.

I already missed the no money down, interest only train. It made no sense. I was pressure by friends, family, realtors, and lenders. I did not want to gamble w/an interest rate that could change, even when they said I could always refinance, I kept thinking whatifs, if there is pre-payment penalty, if the value comes down even 5%, etc.

When the subprime mess hit the fan, I felt like I did the right thing. But now government coming to the rescue, I feel like I was punished for doing the right thing.

I do agree w/you that a correction is in order. Just b/c I think that or you think that, doesn’t mean it’s going to happen. I know it’s not in the Declaration that people are entitled to afford a house, but it’s nice after working hard, you can come home and say, “I’m working hard for this. It’ll be mine.” I mean, ever since people came to America, the pioneers bought land, built their cabins. It just seems like a reward for all the hard work.

I’ve owned a house before and it is a good feeling, something tangible. And I’m not even a consumer or materialistic at all. I don’t give into that. Yet, something about having your own place, though.

[jpinpb]

I have some family in Italy. They own their own homes. Generally passed down through the family. They never sell.

I don’t own a home for the very reason that I could not afford one. I hope to one day afford one. I don’t have much of a choice but wait, save, limit my debt, hope prices come down to something reasonable, hope I don’t have to move out of state.

I already missed the no money down, interest only train. It made no sense. I was pressure by friends, family, realtors, and lenders. I did not want to gamble w/an interest rate that could change, even when they said I could always refinance, I kept thinking whatifs, if there is pre-payment penalty, if the value comes down even 5%, etc.

When the subprime mess hit the fan, I felt like I did the right thing. But now government coming to the rescue, I feel like I was punished for doing the right thing.

I do agree w/you that a correction is in order. Just b/c I think that or you think that, doesn’t mean it’s going to happen. I know it’s not in the Declaration that people are entitled to afford a house, but it’s nice after working hard, you can come home and say, “I’m working hard for this. It’ll be mine.” I mean, ever since people came to America, the pioneers bought land, built their cabins. It just seems like a reward for all the hard work.

I’ve owned a house before and it is a good feeling, something tangible. And I’m not even a consumer or materialistic at all. I don’t give into that. Yet, something about having your own place, though.

[jpinpb]

I have some family in Italy. They own their own homes. Generally passed down through the family. They never sell.

I don’t own a home for the very reason that I could not afford one. I hope to one day afford one. I don’t have much of a choice but wait, save, limit my debt, hope prices come down to something reasonable, hope I don’t have to move out of state.

I already missed the no money down, interest only train. It made no sense. I was pressure by friends, family, realtors, and lenders. I did not want to gamble w/an interest rate that could change, even when they said I could always refinance, I kept thinking whatifs, if there is pre-payment penalty, if the value comes down even 5%, etc.

When the subprime mess hit the fan, I felt like I did the right thing. But now government coming to the rescue, I feel like I was punished for doing the right thing.

I do agree w/you that a correction is in order. Just b/c I think that or you think that, doesn’t mean it’s going to happen. I know it’s not in the Declaration that people are entitled to afford a house, but it’s nice after working hard, you can come home and say, “I’m working hard for this. It’ll be mine.” I mean, ever since people came to America, the pioneers bought land, built their cabins. It just seems like a reward for all the hard work.

I’ve owned a house before and it is a good feeling, something tangible. And I’m not even a consumer or materialistic at all. I don’t give into that. Yet, something about having your own place, though.

[HLS]

JP, stop paying attention to the “median” it’s a meaningless, misleading statistic.

People with median incomes may have no interest in living in a median priced neighborhood.
San Diego is currently in the top 10 of unaffordable cities, based on income and cost of housing ownership.

You shouldn’t have a mortgage for more than 4x-5x your gross income, depending on your other debts.

When you know how to use cash and leverage, you will never be screwed by having money.

Lenders start with your credit score. They put you into a box whether you deserve to be there or not. One late minimum credit card payment (even $20 and an hones mistake) can whack your score 30 or 40 points. Doesn’t make you a bad person, but to FNMA you just became a bigger risk if you score falls below 680.

Realtor commissions are paid by the seller through the selling price. Nobody is getting 5.50% 100% loans today, except for one possible program which may not exist anymore.

You need that down payment, you also need additional financial reserves, and you better hope that you don’t lose your job.

Why does buying a house have to equate to getting ahead ?

It’s not in the Declaration of Independence that people are entitled to afford a house.

In Europe, for generations, people have rented. They have smaller apts/homes, but many have higher standards of living, including education, culture and travel/vacations, and they work less and enjoy life more. They never own a home.

America has been duped by marketing and Wall Street.
Many people have been weaned on propaganda from the govt and the media about what is the right thing to do throughout your life, except you do it with your money, if you have any. The American dream = owning a home ?
That’s MARKETING.

Even homeless people need $5 for Starbucks now, the 50c coffee isn’t good enough anymore. We’ve become a sick society, based upon the greater fool theory.

Why don’t people buy Rolls Royces or fly first class ?
Usually because they can’t afford it; but when people couldn’t really afford to buy houses, they went ahead and bought them anyway, and now there is outrage because they are losing what they never should have bought in the first place, that they cannot afford, and the govt wants to save them ??

We NEED a huge economic correction harder than the 1930’s depression to get the country back on track.

Maybe it will happen, maybe it won’t. Those that are prepared will survive just fine.

Thank the administration for the few good boom years of the decade, there is a price to pay for the excess, corruption and greed, and the average worker will carry afair part of this burden.

Be a happy renter instead of a miserable homeowner until you are ready and can afford what you are comfortable with.

You can borrow more money than is wise for a house as a % of your income. Just because you can get approved for 55%-60% of your gross income for your debts, doesn’t mean that you have to do it.

[HLS]

JP, stop paying attention to the “median” it’s a meaningless, misleading statistic.

People with median incomes may have no interest in living in a median priced neighborhood.
San Diego is currently in the top 10 of unaffordable cities, based on income and cost of housing ownership.

You shouldn’t have a mortgage for more than 4x-5x your gross income, depending on your other debts.

When you know how to use cash and leverage, you will never be screwed by having money.

Lenders start with your credit score. They put you into a box whether you deserve to be there or not. One late minimum credit card payment (even $20 and an hones mistake) can whack your score 30 or 40 points. Doesn’t make you a bad person, but to FNMA you just became a bigger risk if you score falls below 680.

Realtor commissions are paid by the seller through the selling price. Nobody is getting 5.50% 100% loans today, except for one possible program which may not exist anymore.

You need that down payment, you also need additional financial reserves, and you better hope that you don’t lose your job.

Why does buying a house have to equate to getting ahead ?

It’s not in the Declaration of Independence that people are entitled to afford a house.

In Europe, for generations, people have rented. They have smaller apts/homes, but many have higher standards of living, including education, culture and travel/vacations, and they work less and enjoy life more. They never own a home.

America has been duped by marketing and Wall Street.
Many people have been weaned on propaganda from the govt and the media about what is the right thing to do throughout your life, except you do it with your money, if you have any. The American dream = owning a home ?
That’s MARKETING.

Even homeless people need $5 for Starbucks now, the 50c coffee isn’t good enough anymore. We’ve become a sick society, based upon the greater fool theory.

Why don’t people buy Rolls Royces or fly first class ?
Usually because they can’t afford it; but when people couldn’t really afford to buy houses, they went ahead and bought them anyway, and now there is outrage because they are losing what they never should have bought in the first place, that they cannot afford, and the govt wants to save them ??

We NEED a huge economic correction harder than the 1930’s depression to get the country back on track.

Maybe it will happen, maybe it won’t. Those that are prepared will survive just fine.

Thank the administration for the few good boom years of the decade, there is a price to pay for the excess, corruption and greed, and the average worker will carry afair part of this burden.

Be a happy renter instead of a miserable homeowner until you are ready and can afford what you are comfortable with.

You can borrow more money than is wise for a house as a % of your income. Just because you can get approved for 55%-60% of your gross income for your debts, doesn’t mean that you have to do it.

[HLS]

JP, stop paying attention to the “median” it’s a meaningless, misleading statistic.

People with median incomes may have no interest in living in a median priced neighborhood.
San Diego is currently in the top 10 of unaffordable cities, based on income and cost of housing ownership.

You shouldn’t have a mortgage for more than 4x-5x your gross income, depending on your other debts.

When you know how to use cash and leverage, you will never be screwed by having money.

Lenders start with your credit score. They put you into a box whether you deserve to be there or not. One late minimum credit card payment (even $20 and an hones mistake) can whack your score 30 or 40 points. Doesn’t make you a bad person, but to FNMA you just became a bigger risk if you score falls below 680.

Realtor commissions are paid by the seller through the selling price. Nobody is getting 5.50% 100% loans today, except for one possible program which may not exist anymore.

You need that down payment, you also need additional financial reserves, and you better hope that you don’t lose your job.

Why does buying a house have to equate to getting ahead ?

It’s not in the Declaration of Independence that people are entitled to afford a house.

In Europe, for generations, people have rented. They have smaller apts/homes, but many have higher standards of living, including education, culture and travel/vacations, and they work less and enjoy life more. They never own a home.

America has been duped by marketing and Wall Street.
Many people have been weaned on propaganda from the govt and the media about what is the right thing to do throughout your life, except you do it with your money, if you have any. The American dream = owning a home ?
That’s MARKETING.

Even homeless people need $5 for Starbucks now, the 50c coffee isn’t good enough anymore. We’ve become a sick society, based upon the greater fool theory.

Why don’t people buy Rolls Royces or fly first class ?
Usually because they can’t afford it; but when people couldn’t really afford to buy houses, they went ahead and bought them anyway, and now there is outrage because they are losing what they never should have bought in the first place, that they cannot afford, and the govt wants to save them ??

We NEED a huge economic correction harder than the 1930’s depression to get the country back on track.

Maybe it will happen, maybe it won’t. Those that are prepared will survive just fine.

Thank the administration for the few good boom years of the decade, there is a price to pay for the excess, corruption and greed, and the average worker will carry afair part of this burden.

Be a happy renter instead of a miserable homeowner until you are ready and can afford what you are comfortable with.

You can borrow more money than is wise for a house as a % of your income. Just because you can get approved for 55%-60% of your gross income for your debts, doesn’t mean that you have to do it.

[HLS]

JP, stop paying attention to the “median” it’s a meaningless, misleading statistic.

People with median incomes may have no interest in living in a median priced neighborhood.
San Diego is currently in the top 10 of unaffordable cities, based on income and cost of housing ownership.

You shouldn’t have a mortgage for more than 4x-5x your gross income, depending on your other debts.

When you know how to use cash and leverage, you will never be screwed by having money.

Lenders start with your credit score. They put you into a box whether you deserve to be there or not. One late minimum credit card payment (even $20 and an hones mistake) can whack your score 30 or 40 points. Doesn’t make you a bad person, but to FNMA you just became a bigger risk if you score falls below 680.

Realtor commissions are paid by the seller through the selling price. Nobody is getting 5.50% 100% loans today, except for one possible program which may not exist anymore.

You need that down payment, you also need additional financial reserves, and you better hope that you don’t lose your job.

Why does buying a house have to equate to getting ahead ?

It’s not in the Declaration of Independence that people are entitled to afford a house.

In Europe, for generations, people have rented. They have smaller apts/homes, but many have higher standards of living, including education, culture and travel/vacations, and they work less and enjoy life more. They never own a home.

America has been duped by marketing and Wall Street.
Many people have been weaned on propaganda from the govt and the media about what is the right thing to do throughout your life, except you do it with your money, if you have any. The American dream = owning a home ?
That’s MARKETING.

Even homeless people need $5 for Starbucks now, the 50c coffee isn’t good enough anymore. We’ve become a sick society, based upon the greater fool theory.

Why don’t people buy Rolls Royces or fly first class ?
Usually because they can’t afford it; but when people couldn’t really afford to buy houses, they went ahead and bought them anyway, and now there is outrage because they are losing what they never should have bought in the first place, that they cannot afford, and the govt wants to save them ??

We NEED a huge economic correction harder than the 1930’s depression to get the country back on track.

Maybe it will happen, maybe it won’t. Those that are prepared will survive just fine.

Thank the administration for the few good boom years of the decade, there is a price to pay for the excess, corruption and greed, and the average worker will carry afair part of this burden.

Be a happy renter instead of a miserable homeowner until you are ready and can afford what you are comfortable with.

You can borrow more money than is wise for a house as a % of your income. Just because you can get approved for 55%-60% of your gross income for your debts, doesn’t mean that you have to do it.

[jpinpb]

HLS – I have to agree that affordability is a factor. But that is also why none of this makes sense to me. The median priced home in San Diego, they say now, is $440k. I think it may be off. Whatever. The median income is something like $50k. To be fair, we’ll say the average household is a couple, so that bumps it up, one earning more, so we should say about $85k? But if we say it’s a married couple, chances are they have a kid – maybe two – added expense.

Is the median income net or gross?

Most people don’t have 5% to slap down on a house, plus the 6% realtor commission, plus closing costs, if any. We’re looking at $22k + 26 = $48k+.
Almost 50k needed to get a place.

If a house is $440k and say they were lucky to get a loan today w/zero down @ 5.5%, the payment is 2,498, adding to that prop. tax of 366, plus insurance, I’m not sure, $100 – hoping there is no HOA, we’re at $2,964. Let’s say 3k easy math.

When we add to that utilities (gas, electric, phone – cable if they’re splurging) then add food and clothing, gasoline. Shall we add car payments. Very few people know or want to drive a car into the ground. I’ve done this in my life many times, but most people don’t. Most people want a new car. The lowest car payment I’ve seen for a new car is about $150 a month. Shall we times 2 for the couple.
We’ve got to be at around $2,500 by now, thereabouts, being very conservative.

What if they have a student loan or credit card payments?

This leaves very little room at the end of the month for much else.

So how the hell are these people doing it?

Consumer spending amounts to 2/3 of our economy.

How or what incentive is there to save when interest rate keeps going down.

This whole economy is not making sense. If you do the right thing, and save and don’t go in over your head, you’re screwed and never get ahead. Catch-22.

So frustrated. Thanks for your wise words.

[jpinpb]

HLS – I have to agree that affordability is a factor. But that is also why none of this makes sense to me. The median priced home in San Diego, they say now, is $440k. I think it may be off. Whatever. The median income is something like $50k. To be fair, we’ll say the average household is a couple, so that bumps it up, one earning more, so we should say about $85k? But if we say it’s a married couple, chances are they have a kid – maybe two – added expense.

Is the median income net or gross?

Most people don’t have 5% to slap down on a house, plus the 6% realtor commission, plus closing costs, if any. We’re looking at $22k + 26 = $48k+.
Almost 50k needed to get a place.

If a house is $440k and say they were lucky to get a loan today w/zero down @ 5.5%, the payment is 2,498, adding to that prop. tax of 366, plus insurance, I’m not sure, $100 – hoping there is no HOA, we’re at $2,964. Let’s say 3k easy math.

When we add to that utilities (gas, electric, phone – cable if they’re splurging) then add food and clothing, gasoline. Shall we add car payments. Very few people know or want to drive a car into the ground. I’ve done this in my life many times, but most people don’t. Most people want a new car. The lowest car payment I’ve seen for a new car is about $150 a month. Shall we times 2 for the couple.
We’ve got to be at around $2,500 by now, thereabouts, being very conservative.

What if they have a student loan or credit card payments?

This leaves very little room at the end of the month for much else.

So how the hell are these people doing it?

Consumer spending amounts to 2/3 of our economy.

How or what incentive is there to save when interest rate keeps going down.

This whole economy is not making sense. If you do the right thing, and save and don’t go in over your head, you’re screwed and never get ahead. Catch-22.

So frustrated. Thanks for your wise words.

[jpinpb]

HLS – I have to agree that affordability is a factor. But that is also why none of this makes sense to me. The median priced home in San Diego, they say now, is $440k. I think it may be off. Whatever. The median income is something like $50k. To be fair, we’ll say the average household is a couple, so that bumps it up, one earning more, so we should say about $85k? But if we say it’s a married couple, chances are they have a kid – maybe two – added expense.

Is the median income net or gross?

Most people don’t have 5% to slap down on a house, plus the 6% realtor commission, plus closing costs, if any. We’re looking at $22k + 26 = $48k+.
Almost 50k needed to get a place.

If a house is $440k and say they were lucky to get a loan today w/zero down @ 5.5%, the payment is 2,498, adding to that prop. tax of 366, plus insurance, I’m not sure, $100 – hoping there is no HOA, we’re at $2,964. Let’s say 3k easy math.

When we add to that utilities (gas, electric, phone – cable if they’re splurging) then add food and clothing, gasoline. Shall we add car payments. Very few people know or want to drive a car into the ground. I’ve done this in my life many times, but most people don’t. Most people want a new car. The lowest car payment I’ve seen for a new car is about $150 a month. Shall we times 2 for the couple.
We’ve got to be at around $2,500 by now, thereabouts, being very conservative.

What if they have a student loan or credit card payments?

This leaves very little room at the end of the month for much else.

So how the hell are these people doing it?

Consumer spending amounts to 2/3 of our economy.

How or what incentive is there to save when interest rate keeps going down.

This whole economy is not making sense. If you do the right thing, and save and don’t go in over your head, you’re screwed and never get ahead. Catch-22.

So frustrated. Thanks for your wise words.

[jpinpb]

HLS – I have to agree that affordability is a factor. But that is also why none of this makes sense to me. The median priced home in San Diego, they say now, is $440k. I think it may be off. Whatever. The median income is something like $50k. To be fair, we’ll say the average household is a couple, so that bumps it up, one earning more, so we should say about $85k? But if we say it’s a married couple, chances are they have a kid – maybe two – added expense.

Is the median income net or gross?

Most people don’t have 5% to slap down on a house, plus the 6% realtor commission, plus closing costs, if any. We’re looking at $22k + 26 = $48k+.
Almost 50k needed to get a place.

If a house is $440k and say they were lucky to get a loan today w/zero down @ 5.5%, the payment is 2,498, adding to that prop. tax of 366, plus insurance, I’m not sure, $100 – hoping there is no HOA, we’re at $2,964. Let’s say 3k easy math.

When we add to that utilities (gas, electric, phone – cable if they’re splurging) then add food and clothing, gasoline. Shall we add car payments. Very few people know or want to drive a car into the ground. I’ve done this in my life many times, but most people don’t. Most people want a new car. The lowest car payment I’ve seen for a new car is about $150 a month. Shall we times 2 for the couple.
We’ve got to be at around $2,500 by now, thereabouts, being very conservative.

What if they have a student loan or credit card payments?

This leaves very little room at the end of the month for much else.

So how the hell are these people doing it?

Consumer spending amounts to 2/3 of our economy.

How or what incentive is there to save when interest rate keeps going down.

This whole economy is not making sense. If you do the right thing, and save and don’t go in over your head, you’re screwed and never get ahead. Catch-22.

So frustrated. Thanks for your wise words.

[gold_dredger_phd]

One reason that the public is confused is because if a lie is repeated over and over again, like in the liberal, anti-capitalist media, then it gets taken as gospel. Goebbels was right, if you repeat a lie, often enough, loud enough, then people will believe you.
I was shocked by this 10 years ago when a friend of mine, at that time, was expressing his viewpoint that the reason there was no peace in the Middle East was because of Israel. That’s the way it plays in Europe because of their media and it is shocking.

[robson]

There are WMDs in IRAQ! Sorry, i had to. I used to find it funny, but it has become increasingly sad that the most bipartisan issue in America today is hatred of the media. Every liberal considers it too conservative and vice versa. To me, that means it’s pretty well represented with subjective opinions all around.
Anyway, I’m curious whether you consider the lie to be that prices always rise, or that we are headed for a recession. Either way, I would attribute the proliferation of those stories to the fact that airing those topics gains the most viewers and thus, the most $. Kind of ironic that capitalism drives the media to air anti-capitalist sentiment.

[robson]

There are WMDs in IRAQ! Sorry, i had to. I used to find it funny, but it has become increasingly sad that the most bipartisan issue in America today is hatred of the media. Every liberal considers it too conservative and vice versa. To me, that means it’s pretty well represented with subjective opinions all around.
Anyway, I’m curious whether you consider the lie to be that prices always rise, or that we are headed for a recession. Either way, I would attribute the proliferation of those stories to the fact that airing those topics gains the most viewers and thus, the most $. Kind of ironic that capitalism drives the media to air anti-capitalist sentiment.

[robson]

There are WMDs in IRAQ! Sorry, i had to. I used to find it funny, but it has become increasingly sad that the most bipartisan issue in America today is hatred of the media. Every liberal considers it too conservative and vice versa. To me, that means it’s pretty well represented with subjective opinions all around.
Anyway, I’m curious whether you consider the lie to be that prices always rise, or that we are headed for a recession. Either way, I would attribute the proliferation of those stories to the fact that airing those topics gains the most viewers and thus, the most $. Kind of ironic that capitalism drives the media to air anti-capitalist sentiment.

[robson]

There are WMDs in IRAQ! Sorry, i had to. I used to find it funny, but it has become increasingly sad that the most bipartisan issue in America today is hatred of the media. Every liberal considers it too conservative and vice versa. To me, that means it’s pretty well represented with subjective opinions all around.
Anyway, I’m curious whether you consider the lie to be that prices always rise, or that we are headed for a recession. Either way, I would attribute the proliferation of those stories to the fact that airing those topics gains the most viewers and thus, the most $. Kind of ironic that capitalism drives the media to air anti-capitalist sentiment.

[robson]

There are WMDs in IRAQ! Sorry, i had to. I used to find it funny, but it has become increasingly sad that the most bipartisan issue in America today is hatred of the media. Every liberal considers it too conservative and vice versa. To me, that means it’s pretty well represented with subjective opinions all around.
Anyway, I’m curious whether you consider the lie to be that prices always rise, or that we are headed for a recession. Either way, I would attribute the proliferation of those stories to the fact that airing those topics gains the most viewers and thus, the most $. Kind of ironic that capitalism drives the media to air anti-capitalist sentiment.

[gold_dredger_phd]

One reason that the public is confused is because if a lie is repeated over and over again, like in the liberal, anti-capitalist media, then it gets taken as gospel. Goebbels was right, if you repeat a lie, often enough, loud enough, then people will believe you.
I was shocked by this 10 years ago when a friend of mine, at that time, was expressing his viewpoint that the reason there was no peace in the Middle East was because of Israel. That’s the way it plays in Europe because of their media and it is shocking.

[gold_dredger_phd]

One reason that the public is confused is because if a lie is repeated over and over again, like in the liberal, anti-capitalist media, then it gets taken as gospel. Goebbels was right, if you repeat a lie, often enough, loud enough, then people will believe you.
I was shocked by this 10 years ago when a friend of mine, at that time, was expressing his viewpoint that the reason there was no peace in the Middle East was because of Israel. That’s the way it plays in Europe because of their media and it is shocking.

[gold_dredger_phd]

One reason that the public is confused is because if a lie is repeated over and over again, like in the liberal, anti-capitalist media, then it gets taken as gospel. Goebbels was right, if you repeat a lie, often enough, loud enough, then people will believe you.
I was shocked by this 10 years ago when a friend of mine, at that time, was expressing his viewpoint that the reason there was no peace in the Middle East was because of Israel. That’s the way it plays in Europe because of their media and it is shocking.

[gold_dredger_phd]

One reason that the public is confused is because if a lie is repeated over and over again, like in the liberal, anti-capitalist media, then it gets taken as gospel. Goebbels was right, if you repeat a lie, often enough, loud enough, then people will believe you.
I was shocked by this 10 years ago when a friend of mine, at that time, was expressing his viewpoint that the reason there was no peace in the Middle East was because of Israel. That’s the way it plays in Europe because of their media and it is shocking.

[Author]

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