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

[fun4vnay2]

I agree with sdrealtor.
People in this forum have been guessing/calling for 50% off from peak and other doomsday scenario.
I don’t see any of those things coming true..
Life is normal as usual so far and tough for me as I need a house.

[Anonymous]

50% off from peak is still a possibility, just delayed by government bailouts that are destined to fail long term.

Also, I don’t consider a 50% drop in home prices a “doomsday” scenario, just a natural correction.

[Anonymous]

50% off from peak is still a possibility, just delayed by government bailouts that are destined to fail long term.

Also, I don’t consider a 50% drop in home prices a “doomsday” scenario, just a natural correction.

[Anonymous]

50% off from peak is still a possibility, just delayed by government bailouts that are destined to fail long term.

Also, I don’t consider a 50% drop in home prices a “doomsday” scenario, just a natural correction.

[Anonymous]

50% off from peak is still a possibility, just delayed by government bailouts that are destined to fail long term.

Also, I don’t consider a 50% drop in home prices a “doomsday” scenario, just a natural correction.

[Anonymous]

50% off from peak is still a possibility, just delayed by government bailouts that are destined to fail long term.

Also, I don’t consider a 50% drop in home prices a “doomsday” scenario, just a natural correction.

[fun4vnay2]

I didn’t mean the 50% off a doomsday scenario but directed towards other discussions

I can say SD home prices are quite sticky down.
I need to resume my home search in few months.

[fun4vnay2]

I didn’t mean the 50% off a doomsday scenario but directed towards other discussions

I can say SD home prices are quite sticky down.
I need to resume my home search in few months.

[fun4vnay2]

I didn’t mean the 50% off a doomsday scenario but directed towards other discussions

I can say SD home prices are quite sticky down.
I need to resume my home search in few months.

[fun4vnay2]

I didn’t mean the 50% off a doomsday scenario but directed towards other discussions

I can say SD home prices are quite sticky down.
I need to resume my home search in few months.

[fun4vnay2]

I didn’t mean the 50% off a doomsday scenario but directed towards other discussions

I can say SD home prices are quite sticky down.
I need to resume my home search in few months.

[CA renter]

[quote=FormerSanDiegan][quote=CA renter]

Sdr, what you’re totally ignoring is the fact that price drops WERE moving into the “more deirable” neighborhoods. Prices don’t all move at once, they roll into and out of areas during the RE cycle. The ONLY reason prices didn’t drop as much in the higher-end areas is because the Fed and govt intervened when they saw that the housing bust wasn’t “contained” in the lower-end areas. [/quote]

I disagree. The primary factor in prices declining less (percentage-wise) in the high end was that they did not overinflate as much on the run-up.

If you look at Rich’s recent voiceofsandiego.org article (and many prior ones) you can see that lower end homes increased by nearly 200% in the bubble, whereas the high-end increased by about 125%. The high end was a smaller bubble.

The image I am referring to in Rich’s article is posted below for reference.

[img_assist|nid=14962|title=Toscano Data|desc=|link=node|align=left|width=434|height=326]

Original is here …

http://www.voiceofsandiego.org/toscano/article_569a8abe-706e-11e0-988f-001cc4c002e0.html%5B/quote%5D

That is certainly part of it, but there is no doubt in my mind that all the bailout measures were designed specifically to keep the higher-end homes prices propped up.

Why? Because a 50% drop on a $500K home (in O’side, let’s say) is $250K, but a 50% drop on a $1,000,000 home is $500K, so a much bigger loss per house.

People with those higher-end homes were taking HELOCs and cash-out refis with the best of them, and many of them are certainly not able to pay off their debts as agreed.

For those who think prices in the “more desirable” neighborhoods would be where they are without any of the interventions, why do you think they’ve been putting so much money and energy into propping up the housing market? The lower end was pretty close to rent parity even before all the bailouts happened, and very close to a natural bottom. What do you think they were trying to save, if not the higher-end?

Also, the bubble was fueled from the bottom-up. Without all the money from the lower end sales, there would have been far less money to put down on the move-up purchases. What we have now is a very wide divergence in prices, which usually marks the *middle* of a down/up trend. Turning points in the RE market (either up or down) tend to be marked by price convergence. We are far from any turning point, IMHO.

[CA renter]

[quote=FormerSanDiegan][quote=CA renter]

Sdr, what you’re totally ignoring is the fact that price drops WERE moving into the “more deirable” neighborhoods. Prices don’t all move at once, they roll into and out of areas during the RE cycle. The ONLY reason prices didn’t drop as much in the higher-end areas is because the Fed and govt intervened when they saw that the housing bust wasn’t “contained” in the lower-end areas. [/quote]

I disagree. The primary factor in prices declining less (percentage-wise) in the high end was that they did not overinflate as much on the run-up.

If you look at Rich’s recent voiceofsandiego.org article (and many prior ones) you can see that lower end homes increased by nearly 200% in the bubble, whereas the high-end increased by about 125%. The high end was a smaller bubble.

The image I am referring to in Rich’s article is posted below for reference.

[img_assist|nid=14962|title=Toscano Data|desc=|link=node|align=left|width=434|height=326]

Original is here …

http://www.voiceofsandiego.org/toscano/article_569a8abe-706e-11e0-988f-001cc4c002e0.html%5B/quote%5D

That is certainly part of it, but there is no doubt in my mind that all the bailout measures were designed specifically to keep the higher-end homes prices propped up.

Why? Because a 50% drop on a $500K home (in O’side, let’s say) is $250K, but a 50% drop on a $1,000,000 home is $500K, so a much bigger loss per house.

People with those higher-end homes were taking HELOCs and cash-out refis with the best of them, and many of them are certainly not able to pay off their debts as agreed.

For those who think prices in the “more desirable” neighborhoods would be where they are without any of the interventions, why do you think they’ve been putting so much money and energy into propping up the housing market? The lower end was pretty close to rent parity even before all the bailouts happened, and very close to a natural bottom. What do you think they were trying to save, if not the higher-end?

Also, the bubble was fueled from the bottom-up. Without all the money from the lower end sales, there would have been far less money to put down on the move-up purchases. What we have now is a very wide divergence in prices, which usually marks the *middle* of a down/up trend. Turning points in the RE market (either up or down) tend to be marked by price convergence. We are far from any turning point, IMHO.

[CA renter]

[quote=FormerSanDiegan][quote=CA renter]

Sdr, what you’re totally ignoring is the fact that price drops WERE moving into the “more deirable” neighborhoods. Prices don’t all move at once, they roll into and out of areas during the RE cycle. The ONLY reason prices didn’t drop as much in the higher-end areas is because the Fed and govt intervened when they saw that the housing bust wasn’t “contained” in the lower-end areas. [/quote]

I disagree. The primary factor in prices declining less (percentage-wise) in the high end was that they did not overinflate as much on the run-up.

If you look at Rich’s recent voiceofsandiego.org article (and many prior ones) you can see that lower end homes increased by nearly 200% in the bubble, whereas the high-end increased by about 125%. The high end was a smaller bubble.

The image I am referring to in Rich’s article is posted below for reference.

[img_assist|nid=14962|title=Toscano Data|desc=|link=node|align=left|width=434|height=326]

Original is here …

http://www.voiceofsandiego.org/toscano/article_569a8abe-706e-11e0-988f-001cc4c002e0.html%5B/quote%5D

That is certainly part of it, but there is no doubt in my mind that all the bailout measures were designed specifically to keep the higher-end homes prices propped up.

Why? Because a 50% drop on a $500K home (in O’side, let’s say) is $250K, but a 50% drop on a $1,000,000 home is $500K, so a much bigger loss per house.

People with those higher-end homes were taking HELOCs and cash-out refis with the best of them, and many of them are certainly not able to pay off their debts as agreed.

For those who think prices in the “more desirable” neighborhoods would be where they are without any of the interventions, why do you think they’ve been putting so much money and energy into propping up the housing market? The lower end was pretty close to rent parity even before all the bailouts happened, and very close to a natural bottom. What do you think they were trying to save, if not the higher-end?

Also, the bubble was fueled from the bottom-up. Without all the money from the lower end sales, there would have been far less money to put down on the move-up purchases. What we have now is a very wide divergence in prices, which usually marks the *middle* of a down/up trend. Turning points in the RE market (either up or down) tend to be marked by price convergence. We are far from any turning point, IMHO.

[CA renter]

[quote=FormerSanDiegan][quote=CA renter]

Sdr, what you’re totally ignoring is the fact that price drops WERE moving into the “more deirable” neighborhoods. Prices don’t all move at once, they roll into and out of areas during the RE cycle. The ONLY reason prices didn’t drop as much in the higher-end areas is because the Fed and govt intervened when they saw that the housing bust wasn’t “contained” in the lower-end areas. [/quote]

I disagree. The primary factor in prices declining less (percentage-wise) in the high end was that they did not overinflate as much on the run-up.

If you look at Rich’s recent voiceofsandiego.org article (and many prior ones) you can see that lower end homes increased by nearly 200% in the bubble, whereas the high-end increased by about 125%. The high end was a smaller bubble.

The image I am referring to in Rich’s article is posted below for reference.

[img_assist|nid=14962|title=Toscano Data|desc=|link=node|align=left|width=434|height=326]

Original is here …

http://www.voiceofsandiego.org/toscano/article_569a8abe-706e-11e0-988f-001cc4c002e0.html%5B/quote%5D

That is certainly part of it, but there is no doubt in my mind that all the bailout measures were designed specifically to keep the higher-end homes prices propped up.

Why? Because a 50% drop on a $500K home (in O’side, let’s say) is $250K, but a 50% drop on a $1,000,000 home is $500K, so a much bigger loss per house.

People with those higher-end homes were taking HELOCs and cash-out refis with the best of them, and many of them are certainly not able to pay off their debts as agreed.

For those who think prices in the “more desirable” neighborhoods would be where they are without any of the interventions, why do you think they’ve been putting so much money and energy into propping up the housing market? The lower end was pretty close to rent parity even before all the bailouts happened, and very close to a natural bottom. What do you think they were trying to save, if not the higher-end?

Also, the bubble was fueled from the bottom-up. Without all the money from the lower end sales, there would have been far less money to put down on the move-up purchases. What we have now is a very wide divergence in prices, which usually marks the *middle* of a down/up trend. Turning points in the RE market (either up or down) tend to be marked by price convergence. We are far from any turning point, IMHO.

[Author]

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