GSE limits slated to drop (PLUS bonus question for mortgage experts)

[earlyretirement]

[quote=sdrealtor]Just to be clear. I never said immune and I dont hang out with a wealthy crowd. I hang out with well educated, professionals in their late 30″ to mid 50’s who have earned good money for many years and have always lived within their means. These folks didnt over extend themselves, have solid incomes, assets and family behind them. Too many of you seem to think everyone out there was irresponsible during the bubble. I know that I wasnt and that my friends and neighbors werent either. There are a lot more of us out there than any of you could imagine. The rich folks, well i run into them in my travels because of where I live. There are lots of them out there too.

Yes there are folks who got caught up in things and overextended them in my hoods. However they are far more the exception than the rule. There are just as many if not more conservative folks who sat all this out than there are over extended around here. Bear in mind I am specifically addressing NCC and the other submarkets are very different.[/quote]

I do agree with this statement sdrealtor that you made. I do agree that in that area, the incomes are higher, the education levels are higher and there are probably far fewer that over extended themselves vs. on the national scene.

You are right there are plenty of people that lived within their means over the past decade. I work with hundreds of investors and they all are in the camp you described. In fact, I’ve purchased over 500 properties for them in the past decade and they have all paid 100% cash for their properties.

And I do agree with you BG that the coastal areas will be less affected by the loan reduction limits but I do think nonetheless it will make a difference.

I think that San Diego will always be a more desirable market and will attract a wealthier crowd in the nicer neighborhoods.

While there are a lot of wealthy folks in that area, there are still plenty of people that lived beyond their means. Lots of folks even with good income streams were taking equity out of their homes, etc.

Just a look at the scary high number of Americans that have NEGATIVE equity on their homes speaks volumes and isn’t something you can argue with. By the end of this year, the percentage of Americans with negative equity could be upwards of 35% depending how much properties fall. That’s a staggering #.

So yeah there are a lot of wealthy people that didn’t over extend themselves but there are lots that did.

[sdrealtor]

Couldnt agree more.

[sdrealtor]

Couldnt agree more.

[sdrealtor]

Couldnt agree more.

[sdrealtor]

Couldnt agree more.

[sdrealtor]

Couldnt agree more.

[bearishgurl]

[quote=earlyretirement]…And I do agree with you BG that the coastal areas will be less affected by the loan reduction limits but I do think nonetheless it will make a difference.

I think that San Diego will always be a more desirable market and will attract a wealthier crowd in the nicer neighborhoods.

While there are a lot of wealthy folks in that area, there are still plenty of people that lived beyond their means. Lots of folks even with good income streams were taking equity out of their homes, etc.

Just a look at the scary high number of Americans that have NEGATIVE equity on their homes speaks volumes and isn’t something you can argue with. By the end of this year, the percentage of Americans with negative equity could be upwards of 35% depending how much properties fall. That’s a staggering #.

So yeah there are a lot of wealthy people that didn’t over extend themselves but there are lots that did.[/quote]

ER, I don’t see how there could be a “trickle down” effect of lowered values to La Playa San Diego (92106) or Del Mar Village because a homeowner in SantaLuz (92127) or Scripps Ranch San Diego (92131) lost their (valued at over $680K) property to foreclosure.

SantaLuz IS a custom area but situated in a less-desirable inland area and also heavily encumbered by CFD(s). Scripps Ranch is predominantly on tract (except for some fire rebuilds). No matter what improvements were made to a property there, when all is said and done, it IS a tract home situated in a tract area. That fact in itself sets a “ceiling” on values. Very few buyers will pay a premium for over-improvements on a tract.

Since you are living out of the area, why don’t you try this exercise before you visit? Take an urban zip code such as 92103 or 92106 and compare the current distress in it with a suburban or exurban zip code (such as the two above or their surrounds). Study ONLY SFR’s (condos have a much higher rate of underwater owners and walkaways).

I think you are mistaken on your assertion that most of the valuable coastal property is owned by “highly educated” people or even career people. Perhaps 50% of it is and even a higher percentage in sdr’s outlying NCC. But in the urban core, the valuable RE is mostly owned by the over-55 set. This demographic may or may not have a college education or even a complete HS education. They may be widows/widowers (remarried or not) and other heirs. Due to the familial pass-thru provisions of Prop 13, an heir often bought out other heirs so they could live in a low-tax property for life. If the last parent died 15+ years ago, it may have not cost them that much to buy their siblings out. If you were a 62 year-old female who inherited your parent’s 70+ year-old well-appointed, well-located valuable home in Mission Hills (92103) and also their tax base, would you mortgage it and screw up your entire future just because it is now 2004 and an easy-lending bubble floated thru the statosphere? I think not. Many of these people are on fixed incomes. Whatever their house is worth is on paper only to them, until they decide to sell or die, whichever occurs first.

These are often the unusual custom properties we see marketed with a “wishful” price. If the marketing “experiment” doesn’t work, the listing is withdrawn. It’s not about seller-delusion because there is no distress here. No one wanted that particular property at that price at that time (with all the distressed properties around to choose from) and that’s okay for now. It’s a free country.

Custom properties vs. tracts are apples and oranges. Older and newer areas are apples and oranges. The buyers and owners in these respective areas are also apples and oranges as is their levels of “distress.”

In short, CA RE values and levels of distress vary widely from micromarket to micromarket. This will never change.

[bearishgurl]

[quote=earlyretirement]…And I do agree with you BG that the coastal areas will be less affected by the loan reduction limits but I do think nonetheless it will make a difference.

I think that San Diego will always be a more desirable market and will attract a wealthier crowd in the nicer neighborhoods.

While there are a lot of wealthy folks in that area, there are still plenty of people that lived beyond their means. Lots of folks even with good income streams were taking equity out of their homes, etc.

Just a look at the scary high number of Americans that have NEGATIVE equity on their homes speaks volumes and isn’t something you can argue with. By the end of this year, the percentage of Americans with negative equity could be upwards of 35% depending how much properties fall. That’s a staggering #.

So yeah there are a lot of wealthy people that didn’t over extend themselves but there are lots that did.[/quote]

ER, I don’t see how there could be a “trickle down” effect of lowered values to La Playa San Diego (92106) or Del Mar Village because a homeowner in SantaLuz (92127) or Scripps Ranch San Diego (92131) lost their (valued at over $680K) property to foreclosure.

SantaLuz IS a custom area but situated in a less-desirable inland area and also heavily encumbered by CFD(s). Scripps Ranch is predominantly on tract (except for some fire rebuilds). No matter what improvements were made to a property there, when all is said and done, it IS a tract home situated in a tract area. That fact in itself sets a “ceiling” on values. Very few buyers will pay a premium for over-improvements on a tract.

Since you are living out of the area, why don’t you try this exercise before you visit? Take an urban zip code such as 92103 or 92106 and compare the current distress in it with a suburban or exurban zip code (such as the two above or their surrounds). Study ONLY SFR’s (condos have a much higher rate of underwater owners and walkaways).

I think you are mistaken on your assertion that most of the valuable coastal property is owned by “highly educated” people or even career people. Perhaps 50% of it is and even a higher percentage in sdr’s outlying NCC. But in the urban core, the valuable RE is mostly owned by the over-55 set. This demographic may or may not have a college education or even a complete HS education. They may be widows/widowers (remarried or not) and other heirs. Due to the familial pass-thru provisions of Prop 13, an heir often bought out other heirs so they could live in a low-tax property for life. If the last parent died 15+ years ago, it may have not cost them that much to buy their siblings out. If you were a 62 year-old female who inherited your parent’s 70+ year-old well-appointed, well-located valuable home in Mission Hills (92103) and also their tax base, would you mortgage it and screw up your entire future just because it is now 2004 and an easy-lending bubble floated thru the statosphere? I think not. Many of these people are on fixed incomes. Whatever their house is worth is on paper only to them, until they decide to sell or die, whichever occurs first.

These are often the unusual custom properties we see marketed with a “wishful” price. If the marketing “experiment” doesn’t work, the listing is withdrawn. It’s not about seller-delusion because there is no distress here. No one wanted that particular property at that price at that time (with all the distressed properties around to choose from) and that’s okay for now. It’s a free country.

Custom properties vs. tracts are apples and oranges. Older and newer areas are apples and oranges. The buyers and owners in these respective areas are also apples and oranges as is their levels of “distress.”

In short, CA RE values and levels of distress vary widely from micromarket to micromarket. This will never change.

[bearishgurl]

[quote=earlyretirement]…And I do agree with you BG that the coastal areas will be less affected by the loan reduction limits but I do think nonetheless it will make a difference.

I think that San Diego will always be a more desirable market and will attract a wealthier crowd in the nicer neighborhoods.

While there are a lot of wealthy folks in that area, there are still plenty of people that lived beyond their means. Lots of folks even with good income streams were taking equity out of their homes, etc.

Just a look at the scary high number of Americans that have NEGATIVE equity on their homes speaks volumes and isn’t something you can argue with. By the end of this year, the percentage of Americans with negative equity could be upwards of 35% depending how much properties fall. That’s a staggering #.

So yeah there are a lot of wealthy people that didn’t over extend themselves but there are lots that did.[/quote]

ER, I don’t see how there could be a “trickle down” effect of lowered values to La Playa San Diego (92106) or Del Mar Village because a homeowner in SantaLuz (92127) or Scripps Ranch San Diego (92131) lost their (valued at over $680K) property to foreclosure.

SantaLuz IS a custom area but situated in a less-desirable inland area and also heavily encumbered by CFD(s). Scripps Ranch is predominantly on tract (except for some fire rebuilds). No matter what improvements were made to a property there, when all is said and done, it IS a tract home situated in a tract area. That fact in itself sets a “ceiling” on values. Very few buyers will pay a premium for over-improvements on a tract.

Since you are living out of the area, why don’t you try this exercise before you visit? Take an urban zip code such as 92103 or 92106 and compare the current distress in it with a suburban or exurban zip code (such as the two above or their surrounds). Study ONLY SFR’s (condos have a much higher rate of underwater owners and walkaways).

I think you are mistaken on your assertion that most of the valuable coastal property is owned by “highly educated” people or even career people. Perhaps 50% of it is and even a higher percentage in sdr’s outlying NCC. But in the urban core, the valuable RE is mostly owned by the over-55 set. This demographic may or may not have a college education or even a complete HS education. They may be widows/widowers (remarried or not) and other heirs. Due to the familial pass-thru provisions of Prop 13, an heir often bought out other heirs so they could live in a low-tax property for life. If the last parent died 15+ years ago, it may have not cost them that much to buy their siblings out. If you were a 62 year-old female who inherited your parent’s 70+ year-old well-appointed, well-located valuable home in Mission Hills (92103) and also their tax base, would you mortgage it and screw up your entire future just because it is now 2004 and an easy-lending bubble floated thru the statosphere? I think not. Many of these people are on fixed incomes. Whatever their house is worth is on paper only to them, until they decide to sell or die, whichever occurs first.

These are often the unusual custom properties we see marketed with a “wishful” price. If the marketing “experiment” doesn’t work, the listing is withdrawn. It’s not about seller-delusion because there is no distress here. No one wanted that particular property at that price at that time (with all the distressed properties around to choose from) and that’s okay for now. It’s a free country.

Custom properties vs. tracts are apples and oranges. Older and newer areas are apples and oranges. The buyers and owners in these respective areas are also apples and oranges as is their levels of “distress.”

In short, CA RE values and levels of distress vary widely from micromarket to micromarket. This will never change.

[bearishgurl]

[quote=earlyretirement]…And I do agree with you BG that the coastal areas will be less affected by the loan reduction limits but I do think nonetheless it will make a difference.

I think that San Diego will always be a more desirable market and will attract a wealthier crowd in the nicer neighborhoods.

While there are a lot of wealthy folks in that area, there are still plenty of people that lived beyond their means. Lots of folks even with good income streams were taking equity out of their homes, etc.

Just a look at the scary high number of Americans that have NEGATIVE equity on their homes speaks volumes and isn’t something you can argue with. By the end of this year, the percentage of Americans with negative equity could be upwards of 35% depending how much properties fall. That’s a staggering #.

So yeah there are a lot of wealthy people that didn’t over extend themselves but there are lots that did.[/quote]

ER, I don’t see how there could be a “trickle down” effect of lowered values to La Playa San Diego (92106) or Del Mar Village because a homeowner in SantaLuz (92127) or Scripps Ranch San Diego (92131) lost their (valued at over $680K) property to foreclosure.

SantaLuz IS a custom area but situated in a less-desirable inland area and also heavily encumbered by CFD(s). Scripps Ranch is predominantly on tract (except for some fire rebuilds). No matter what improvements were made to a property there, when all is said and done, it IS a tract home situated in a tract area. That fact in itself sets a “ceiling” on values. Very few buyers will pay a premium for over-improvements on a tract.

Since you are living out of the area, why don’t you try this exercise before you visit? Take an urban zip code such as 92103 or 92106 and compare the current distress in it with a suburban or exurban zip code (such as the two above or their surrounds). Study ONLY SFR’s (condos have a much higher rate of underwater owners and walkaways).

I think you are mistaken on your assertion that most of the valuable coastal property is owned by “highly educated” people or even career people. Perhaps 50% of it is and even a higher percentage in sdr’s outlying NCC. But in the urban core, the valuable RE is mostly owned by the over-55 set. This demographic may or may not have a college education or even a complete HS education. They may be widows/widowers (remarried or not) and other heirs. Due to the familial pass-thru provisions of Prop 13, an heir often bought out other heirs so they could live in a low-tax property for life. If the last parent died 15+ years ago, it may have not cost them that much to buy their siblings out. If you were a 62 year-old female who inherited your parent’s 70+ year-old well-appointed, well-located valuable home in Mission Hills (92103) and also their tax base, would you mortgage it and screw up your entire future just because it is now 2004 and an easy-lending bubble floated thru the statosphere? I think not. Many of these people are on fixed incomes. Whatever their house is worth is on paper only to them, until they decide to sell or die, whichever occurs first.

These are often the unusual custom properties we see marketed with a “wishful” price. If the marketing “experiment” doesn’t work, the listing is withdrawn. It’s not about seller-delusion because there is no distress here. No one wanted that particular property at that price at that time (with all the distressed properties around to choose from) and that’s okay for now. It’s a free country.

Custom properties vs. tracts are apples and oranges. Older and newer areas are apples and oranges. The buyers and owners in these respective areas are also apples and oranges as is their levels of “distress.”

In short, CA RE values and levels of distress vary widely from micromarket to micromarket. This will never change.

[bearishgurl]

[quote=earlyretirement]…And I do agree with you BG that the coastal areas will be less affected by the loan reduction limits but I do think nonetheless it will make a difference.

I think that San Diego will always be a more desirable market and will attract a wealthier crowd in the nicer neighborhoods.

While there are a lot of wealthy folks in that area, there are still plenty of people that lived beyond their means. Lots of folks even with good income streams were taking equity out of their homes, etc.

Just a look at the scary high number of Americans that have NEGATIVE equity on their homes speaks volumes and isn’t something you can argue with. By the end of this year, the percentage of Americans with negative equity could be upwards of 35% depending how much properties fall. That’s a staggering #.

So yeah there are a lot of wealthy people that didn’t over extend themselves but there are lots that did.[/quote]

ER, I don’t see how there could be a “trickle down” effect of lowered values to La Playa San Diego (92106) or Del Mar Village because a homeowner in SantaLuz (92127) or Scripps Ranch San Diego (92131) lost their (valued at over $680K) property to foreclosure.

SantaLuz IS a custom area but situated in a less-desirable inland area and also heavily encumbered by CFD(s). Scripps Ranch is predominantly on tract (except for some fire rebuilds). No matter what improvements were made to a property there, when all is said and done, it IS a tract home situated in a tract area. That fact in itself sets a “ceiling” on values. Very few buyers will pay a premium for over-improvements on a tract.

Since you are living out of the area, why don’t you try this exercise before you visit? Take an urban zip code such as 92103 or 92106 and compare the current distress in it with a suburban or exurban zip code (such as the two above or their surrounds). Study ONLY SFR’s (condos have a much higher rate of underwater owners and walkaways).

I think you are mistaken on your assertion that most of the valuable coastal property is owned by “highly educated” people or even career people. Perhaps 50% of it is and even a higher percentage in sdr’s outlying NCC. But in the urban core, the valuable RE is mostly owned by the over-55 set. This demographic may or may not have a college education or even a complete HS education. They may be widows/widowers (remarried or not) and other heirs. Due to the familial pass-thru provisions of Prop 13, an heir often bought out other heirs so they could live in a low-tax property for life. If the last parent died 15+ years ago, it may have not cost them that much to buy their siblings out. If you were a 62 year-old female who inherited your parent’s 70+ year-old well-appointed, well-located valuable home in Mission Hills (92103) and also their tax base, would you mortgage it and screw up your entire future just because it is now 2004 and an easy-lending bubble floated thru the statosphere? I think not. Many of these people are on fixed incomes. Whatever their house is worth is on paper only to them, until they decide to sell or die, whichever occurs first.

These are often the unusual custom properties we see marketed with a “wishful” price. If the marketing “experiment” doesn’t work, the listing is withdrawn. It’s not about seller-delusion because there is no distress here. No one wanted that particular property at that price at that time (with all the distressed properties around to choose from) and that’s okay for now. It’s a free country.

Custom properties vs. tracts are apples and oranges. Older and newer areas are apples and oranges. The buyers and owners in these respective areas are also apples and oranges as is their levels of “distress.”

In short, CA RE values and levels of distress vary widely from micromarket to micromarket. This will never change.

[Anonymous]

Premium areas will be affected by this change simply by the fact that there is now a smaller pool of people who are able to get the loans. Result is less demand, prices will be affected negatively to some degree.

[Anonymous]

Premium areas will be affected by this change simply by the fact that there is now a smaller pool of people who are able to get the loans. Result is less demand, prices will be affected negatively to some degree.

[Anonymous]

Premium areas will be affected by this change simply by the fact that there is now a smaller pool of people who are able to get the loans. Result is less demand, prices will be affected negatively to some degree.

[Anonymous]

Premium areas will be affected by this change simply by the fact that there is now a smaller pool of people who are able to get the loans. Result is less demand, prices will be affected negatively to some degree.

[Author]

Posts