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

[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.

[sdrealtor]

CAR
I love when you post statements like this because it speaks to your clear biases:

“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.”

You say “many” because you need to beleive that there are “many” of them out there. The reality is that there are “some” of them out there. The problem is that there are more buyers than “some”. That is why any premium property in NCC that ends up truly as a fire sale distressed property always gets bid up to retail if the market has a fair chance to bid on it.

First of all in most parts of the country homes dont even approach the prices you believe they are legislating to. Its as if you beleive they are sitting in DC on Wall St trying to prop up the NCC market.

Fortunately you are in a good place. Enjoy the view from there because that is what you are going to have unless you change your perspective.

[sdrealtor]

CAR
I love when you post statements like this because it speaks to your clear biases:

“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.”

You say “many” because you need to beleive that there are “many” of them out there. The reality is that there are “some” of them out there. The problem is that there are more buyers than “some”. That is why any premium property in NCC that ends up truly as a fire sale distressed property always gets bid up to retail if the market has a fair chance to bid on it.

First of all in most parts of the country homes dont even approach the prices you believe they are legislating to. Its as if you beleive they are sitting in DC on Wall St trying to prop up the NCC market.

Fortunately you are in a good place. Enjoy the view from there because that is what you are going to have unless you change your perspective.

[sdrealtor]

CAR
I love when you post statements like this because it speaks to your clear biases:

“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.”

You say “many” because you need to beleive that there are “many” of them out there. The reality is that there are “some” of them out there. The problem is that there are more buyers than “some”. That is why any premium property in NCC that ends up truly as a fire sale distressed property always gets bid up to retail if the market has a fair chance to bid on it.

First of all in most parts of the country homes dont even approach the prices you believe they are legislating to. Its as if you beleive they are sitting in DC on Wall St trying to prop up the NCC market.

Fortunately you are in a good place. Enjoy the view from there because that is what you are going to have unless you change your perspective.

[sdrealtor]

CAR
I love when you post statements like this because it speaks to your clear biases:

“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.”

You say “many” because you need to beleive that there are “many” of them out there. The reality is that there are “some” of them out there. The problem is that there are more buyers than “some”. That is why any premium property in NCC that ends up truly as a fire sale distressed property always gets bid up to retail if the market has a fair chance to bid on it.

First of all in most parts of the country homes dont even approach the prices you believe they are legislating to. Its as if you beleive they are sitting in DC on Wall St trying to prop up the NCC market.

Fortunately you are in a good place. Enjoy the view from there because that is what you are going to have unless you change your perspective.

[sdrealtor]

CAR
I love when you post statements like this because it speaks to your clear biases:

“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.”

You say “many” because you need to beleive that there are “many” of them out there. The reality is that there are “some” of them out there. The problem is that there are more buyers than “some”. That is why any premium property in NCC that ends up truly as a fire sale distressed property always gets bid up to retail if the market has a fair chance to bid on it.

First of all in most parts of the country homes dont even approach the prices you believe they are legislating to. Its as if you beleive they are sitting in DC on Wall St trying to prop up the NCC market.

Fortunately you are in a good place. Enjoy the view from there because that is what you are going to have unless you change your perspective.

[CA renter]

Of course the distressed sales get bid up to retail/market price if they are marketed properly. To me, that’s a given. The issue is whether or not that retail price is going up, down, or remaining stable.

I know you’re seeing what I’m seeing — this is the S-L-O-W-E-S-T spring selling season I’ve seen in over ten years. The official numbers might not tell that story…yet. There are more and better houses on the market today — and for better prices — than I’ve seen in many, many years. The oddest part (even to me) is that they are sitting. When you take these very low interest rates into consideration, this is a VERY telling sign, IMHO.

[CA renter]

Of course the distressed sales get bid up to retail/market price if they are marketed properly. To me, that’s a given. The issue is whether or not that retail price is going up, down, or remaining stable.

I know you’re seeing what I’m seeing — this is the S-L-O-W-E-S-T spring selling season I’ve seen in over ten years. The official numbers might not tell that story…yet. There are more and better houses on the market today — and for better prices — than I’ve seen in many, many years. The oddest part (even to me) is that they are sitting. When you take these very low interest rates into consideration, this is a VERY telling sign, IMHO.

[CA renter]

Of course the distressed sales get bid up to retail/market price if they are marketed properly. To me, that’s a given. The issue is whether or not that retail price is going up, down, or remaining stable.

I know you’re seeing what I’m seeing — this is the S-L-O-W-E-S-T spring selling season I’ve seen in over ten years. The official numbers might not tell that story…yet. There are more and better houses on the market today — and for better prices — than I’ve seen in many, many years. The oddest part (even to me) is that they are sitting. When you take these very low interest rates into consideration, this is a VERY telling sign, IMHO.

[CA renter]

Of course the distressed sales get bid up to retail/market price if they are marketed properly. To me, that’s a given. The issue is whether or not that retail price is going up, down, or remaining stable.

I know you’re seeing what I’m seeing — this is the S-L-O-W-E-S-T spring selling season I’ve seen in over ten years. The official numbers might not tell that story…yet. There are more and better houses on the market today — and for better prices — than I’ve seen in many, many years. The oddest part (even to me) is that they are sitting. When you take these very low interest rates into consideration, this is a VERY telling sign, IMHO.

[CA renter]

Of course the distressed sales get bid up to retail/market price if they are marketed properly. To me, that’s a given. The issue is whether or not that retail price is going up, down, or remaining stable.

I know you’re seeing what I’m seeing — this is the S-L-O-W-E-S-T spring selling season I’ve seen in over ten years. The official numbers might not tell that story…yet. There are more and better houses on the market today — and for better prices — than I’ve seen in many, many years. The oddest part (even to me) is that they are sitting. When you take these very low interest rates into consideration, this is a VERY telling sign, IMHO.

[CA renter]

[quote=sdrealtor]CAR
There are always posers in good times and bad. Are there more now than any other time? just dont dont see more.

The hedge fund gal is living in a house with her sencond husband in a house owed free and clear on Balboa Island in Newport Beach. She could have ZERO money and it wouldnt matter. you are grabbing at straws hoping upon hope.[/quote]

Forgot to answer your question here.

Yes, I think there are more poseurs now than there were 10 years ago. We’ve just lived through the largest credit bubble in history, where almost anyone was able to get access to hundreds of thousands of dollars, without having to show whether or not they were capable of paying it back. Lots of money was unleashed, and many, many people took advantage of the loose credit conditions to make themselves look “rich” (so many people actually believed that having access to all that credit made them rich).

Yes, I belive *many* people fell prey to the credit bubble, and we are nowhere near done purging the excesses that were a direct result of the entirely unsustainable credit bubble.

[CA renter]

[quote=sdrealtor]CAR
There are always posers in good times and bad. Are there more now than any other time? just dont dont see more.

The hedge fund gal is living in a house with her sencond husband in a house owed free and clear on Balboa Island in Newport Beach. She could have ZERO money and it wouldnt matter. you are grabbing at straws hoping upon hope.[/quote]

Forgot to answer your question here.

Yes, I think there are more poseurs now than there were 10 years ago. We’ve just lived through the largest credit bubble in history, where almost anyone was able to get access to hundreds of thousands of dollars, without having to show whether or not they were capable of paying it back. Lots of money was unleashed, and many, many people took advantage of the loose credit conditions to make themselves look “rich” (so many people actually believed that having access to all that credit made them rich).

Yes, I belive *many* people fell prey to the credit bubble, and we are nowhere near done purging the excesses that were a direct result of the entirely unsustainable credit bubble.

[CA renter]

[quote=sdrealtor]CAR
There are always posers in good times and bad. Are there more now than any other time? just dont dont see more.

The hedge fund gal is living in a house with her sencond husband in a house owed free and clear on Balboa Island in Newport Beach. She could have ZERO money and it wouldnt matter. you are grabbing at straws hoping upon hope.[/quote]

Forgot to answer your question here.

Yes, I think there are more poseurs now than there were 10 years ago. We’ve just lived through the largest credit bubble in history, where almost anyone was able to get access to hundreds of thousands of dollars, without having to show whether or not they were capable of paying it back. Lots of money was unleashed, and many, many people took advantage of the loose credit conditions to make themselves look “rich” (so many people actually believed that having access to all that credit made them rich).

Yes, I belive *many* people fell prey to the credit bubble, and we are nowhere near done purging the excesses that were a direct result of the entirely unsustainable credit bubble.

[CA renter]

[quote=sdrealtor]CAR
There are always posers in good times and bad. Are there more now than any other time? just dont dont see more.

The hedge fund gal is living in a house with her sencond husband in a house owed free and clear on Balboa Island in Newport Beach. She could have ZERO money and it wouldnt matter. you are grabbing at straws hoping upon hope.[/quote]

Forgot to answer your question here.

Yes, I think there are more poseurs now than there were 10 years ago. We’ve just lived through the largest credit bubble in history, where almost anyone was able to get access to hundreds of thousands of dollars, without having to show whether or not they were capable of paying it back. Lots of money was unleashed, and many, many people took advantage of the loose credit conditions to make themselves look “rich” (so many people actually believed that having access to all that credit made them rich).

Yes, I belive *many* people fell prey to the credit bubble, and we are nowhere near done purging the excesses that were a direct result of the entirely unsustainable credit bubble.

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