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

[CA renter]

[quote=sdrealtor]CAR
I am seeing different things than you. I seeing good homes sitting on the market trying to push the price about 5% beyond where they should be. If they would just come to market they would clear but for a variety of reasons they dont.

I also dont see more posers today than in the past. People have lived on credit cards for as long as I can remember. UCG’s story is typical of what I’ve seen people do the last 30+ years of my life. Another thing you never seem to take into consideration is the MASSIVE wealth transfer that is just beginning. The wealth of our parents generation is just beginning to get passed to the boomers. I know what I and each of my 3 siblings are getting and my parents were never big wage earners. Just frugal people who lived within their means and always saved for the future. This whole shabang has much legs then you think.[/quote]

Yes, people have always taken advantage of credit to give them the appearance of a better life, at least until they have to pay off the debt. That being said, we were NEVER able to get hundreds of thousands of dollars before vs. the bubble, when people who wouldn’t normally qualify for $20K credit were able to get $200K in credit. There is a huge difference in the dollar amounts available to anyone who wanted to pretend they were rich. Some were able to carry it off for quite a while, due to the tremendous amount of money they were able to tap, courtesy of a house they never had to make payments on — they could just keep refinancing and pilling on more debt, and they used this new debt to pay off their old debt (as long as the music kept playing).

I’ve most certainly taken the “transfer of wealth” into consideration. That massive transfer of wealth means, in most cases, that wealth is being diluted, not concentrated. It’s going from one parent/couple to two or more kids, plus charities, etc. It’s not “new” wealth (which might have an inflationary effect), but wealth that has been there all along. In many (most?) cases, in order for the heirs to tap that wealth, they need to sell real estate, not buy it. I see this as deflationary, not inflationary.

[CA renter]

[quote=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.[/quote]

Forgot to address this point in your previous post.

One of the problems with just focusing on micro-markets (like Nirvana, NCC), is the fact that you don’t see how connected things are. This pattern of the lower-end areas falling first, then the govt intervention, then the upper-mid and higher-end levitating above it all is NOT exclusive to NCC. This pattern has been noted **all across the country** and even in other countries where their governments and central banks intervened in their housing markets when ours did. I guess that’s why I don’t believe “it’s different here.”

Sure, people will pay more to live here than in some other less desirable zips, states, and countries, but the “levitating higher end” is not a NCC thing, it’s happened everywhere, with only a few areas that have had other issues, like Detroit, seeing what appears to be a more muted effect from the bailout measures (they’re still higher than they would be, but they’ve fallen more than the better areas in more healthy states, etc.). The lower end was allowed to fall because some people claimed to believe that everything was “contained,” and because it all happened so quickly, they weren’t able to respond in time. They pooped their britches when they discovered that the defaults and price declines were rolling into “prime” mortgages and prime neighborhoods with as much gusto as they did the “sub-prime” mortgages and neighborhoods. That’s why we’ve seen trillions of dollars being shoved into the mortgage/bond/housing market. It’s not because they didn’t have anything better to do with that money.

[CA renter]

[quote=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.[/quote]

Forgot to address this point in your previous post.

One of the problems with just focusing on micro-markets (like Nirvana, NCC), is the fact that you don’t see how connected things are. This pattern of the lower-end areas falling first, then the govt intervention, then the upper-mid and higher-end levitating above it all is NOT exclusive to NCC. This pattern has been noted **all across the country** and even in other countries where their governments and central banks intervened in their housing markets when ours did. I guess that’s why I don’t believe “it’s different here.”

Sure, people will pay more to live here than in some other less desirable zips, states, and countries, but the “levitating higher end” is not a NCC thing, it’s happened everywhere, with only a few areas that have had other issues, like Detroit, seeing what appears to be a more muted effect from the bailout measures (they’re still higher than they would be, but they’ve fallen more than the better areas in more healthy states, etc.). The lower end was allowed to fall because some people claimed to believe that everything was “contained,” and because it all happened so quickly, they weren’t able to respond in time. They pooped their britches when they discovered that the defaults and price declines were rolling into “prime” mortgages and prime neighborhoods with as much gusto as they did the “sub-prime” mortgages and neighborhoods. That’s why we’ve seen trillions of dollars being shoved into the mortgage/bond/housing market. It’s not because they didn’t have anything better to do with that money.

[CA renter]

[quote=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.[/quote]

Forgot to address this point in your previous post.

One of the problems with just focusing on micro-markets (like Nirvana, NCC), is the fact that you don’t see how connected things are. This pattern of the lower-end areas falling first, then the govt intervention, then the upper-mid and higher-end levitating above it all is NOT exclusive to NCC. This pattern has been noted **all across the country** and even in other countries where their governments and central banks intervened in their housing markets when ours did. I guess that’s why I don’t believe “it’s different here.”

Sure, people will pay more to live here than in some other less desirable zips, states, and countries, but the “levitating higher end” is not a NCC thing, it’s happened everywhere, with only a few areas that have had other issues, like Detroit, seeing what appears to be a more muted effect from the bailout measures (they’re still higher than they would be, but they’ve fallen more than the better areas in more healthy states, etc.). The lower end was allowed to fall because some people claimed to believe that everything was “contained,” and because it all happened so quickly, they weren’t able to respond in time. They pooped their britches when they discovered that the defaults and price declines were rolling into “prime” mortgages and prime neighborhoods with as much gusto as they did the “sub-prime” mortgages and neighborhoods. That’s why we’ve seen trillions of dollars being shoved into the mortgage/bond/housing market. It’s not because they didn’t have anything better to do with that money.

[CA renter]

[quote=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.[/quote]

Forgot to address this point in your previous post.

One of the problems with just focusing on micro-markets (like Nirvana, NCC), is the fact that you don’t see how connected things are. This pattern of the lower-end areas falling first, then the govt intervention, then the upper-mid and higher-end levitating above it all is NOT exclusive to NCC. This pattern has been noted **all across the country** and even in other countries where their governments and central banks intervened in their housing markets when ours did. I guess that’s why I don’t believe “it’s different here.”

Sure, people will pay more to live here than in some other less desirable zips, states, and countries, but the “levitating higher end” is not a NCC thing, it’s happened everywhere, with only a few areas that have had other issues, like Detroit, seeing what appears to be a more muted effect from the bailout measures (they’re still higher than they would be, but they’ve fallen more than the better areas in more healthy states, etc.). The lower end was allowed to fall because some people claimed to believe that everything was “contained,” and because it all happened so quickly, they weren’t able to respond in time. They pooped their britches when they discovered that the defaults and price declines were rolling into “prime” mortgages and prime neighborhoods with as much gusto as they did the “sub-prime” mortgages and neighborhoods. That’s why we’ve seen trillions of dollars being shoved into the mortgage/bond/housing market. It’s not because they didn’t have anything better to do with that money.

[CA renter]

[quote=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.[/quote]

Forgot to address this point in your previous post.

One of the problems with just focusing on micro-markets (like Nirvana, NCC), is the fact that you don’t see how connected things are. This pattern of the lower-end areas falling first, then the govt intervention, then the upper-mid and higher-end levitating above it all is NOT exclusive to NCC. This pattern has been noted **all across the country** and even in other countries where their governments and central banks intervened in their housing markets when ours did. I guess that’s why I don’t believe “it’s different here.”

Sure, people will pay more to live here than in some other less desirable zips, states, and countries, but the “levitating higher end” is not a NCC thing, it’s happened everywhere, with only a few areas that have had other issues, like Detroit, seeing what appears to be a more muted effect from the bailout measures (they’re still higher than they would be, but they’ve fallen more than the better areas in more healthy states, etc.). The lower end was allowed to fall because some people claimed to believe that everything was “contained,” and because it all happened so quickly, they weren’t able to respond in time. They pooped their britches when they discovered that the defaults and price declines were rolling into “prime” mortgages and prime neighborhoods with as much gusto as they did the “sub-prime” mortgages and neighborhoods. That’s why we’ve seen trillions of dollars being shoved into the mortgage/bond/housing market. It’s not because they didn’t have anything better to do with that money.

[sdrealtor]

“I’ve most certainly taken the “transfer of wealth” into consideration. That massive transfer of wealth means, in most cases, that wealth is being diluted, not concentrated. It’s going from one parent/couple to two or more kids, plus charities, etc. It’s not “new” wealth (which might have an inflationary effect), but wealth that has been there all along. In many (most?) cases, in order for the heirs to tap that wealth, they need to sell real estate, not buy it. I see this as deflationary, not inflationary.”

Two points, boomers will spend that money at a mcu greater clip than the greatest generation ever did. Second, looking at my Mom and my relatives none of them own real estate anymore. They are all living in nursing homes, assited living and lifecare communities. They also all have LTC insurance that foots the entire bill for those in nursing homes or assisted living. I know this isnt the way everyone is but among upper middle class folks in metroplitian areas it seems to be more the rule than the exception. They lived carefully all their lives and preapred for this just like I am doing.

[sdrealtor]

“I’ve most certainly taken the “transfer of wealth” into consideration. That massive transfer of wealth means, in most cases, that wealth is being diluted, not concentrated. It’s going from one parent/couple to two or more kids, plus charities, etc. It’s not “new” wealth (which might have an inflationary effect), but wealth that has been there all along. In many (most?) cases, in order for the heirs to tap that wealth, they need to sell real estate, not buy it. I see this as deflationary, not inflationary.”

Two points, boomers will spend that money at a mcu greater clip than the greatest generation ever did. Second, looking at my Mom and my relatives none of them own real estate anymore. They are all living in nursing homes, assited living and lifecare communities. They also all have LTC insurance that foots the entire bill for those in nursing homes or assisted living. I know this isnt the way everyone is but among upper middle class folks in metroplitian areas it seems to be more the rule than the exception. They lived carefully all their lives and preapred for this just like I am doing.

[sdrealtor]

“I’ve most certainly taken the “transfer of wealth” into consideration. That massive transfer of wealth means, in most cases, that wealth is being diluted, not concentrated. It’s going from one parent/couple to two or more kids, plus charities, etc. It’s not “new” wealth (which might have an inflationary effect), but wealth that has been there all along. In many (most?) cases, in order for the heirs to tap that wealth, they need to sell real estate, not buy it. I see this as deflationary, not inflationary.”

Two points, boomers will spend that money at a mcu greater clip than the greatest generation ever did. Second, looking at my Mom and my relatives none of them own real estate anymore. They are all living in nursing homes, assited living and lifecare communities. They also all have LTC insurance that foots the entire bill for those in nursing homes or assisted living. I know this isnt the way everyone is but among upper middle class folks in metroplitian areas it seems to be more the rule than the exception. They lived carefully all their lives and preapred for this just like I am doing.

[sdrealtor]

“I’ve most certainly taken the “transfer of wealth” into consideration. That massive transfer of wealth means, in most cases, that wealth is being diluted, not concentrated. It’s going from one parent/couple to two or more kids, plus charities, etc. It’s not “new” wealth (which might have an inflationary effect), but wealth that has been there all along. In many (most?) cases, in order for the heirs to tap that wealth, they need to sell real estate, not buy it. I see this as deflationary, not inflationary.”

Two points, boomers will spend that money at a mcu greater clip than the greatest generation ever did. Second, looking at my Mom and my relatives none of them own real estate anymore. They are all living in nursing homes, assited living and lifecare communities. They also all have LTC insurance that foots the entire bill for those in nursing homes or assisted living. I know this isnt the way everyone is but among upper middle class folks in metroplitian areas it seems to be more the rule than the exception. They lived carefully all their lives and preapred for this just like I am doing.

[sdrealtor]

“I’ve most certainly taken the “transfer of wealth” into consideration. That massive transfer of wealth means, in most cases, that wealth is being diluted, not concentrated. It’s going from one parent/couple to two or more kids, plus charities, etc. It’s not “new” wealth (which might have an inflationary effect), but wealth that has been there all along. In many (most?) cases, in order for the heirs to tap that wealth, they need to sell real estate, not buy it. I see this as deflationary, not inflationary.”

Two points, boomers will spend that money at a mcu greater clip than the greatest generation ever did. Second, looking at my Mom and my relatives none of them own real estate anymore. They are all living in nursing homes, assited living and lifecare communities. They also all have LTC insurance that foots the entire bill for those in nursing homes or assisted living. I know this isnt the way everyone is but among upper middle class folks in metroplitian areas it seems to be more the rule than the exception. They lived carefully all their lives and preapred for this just like I am doing.

[sdrealtor]

Go to FLA and tell me the high end is levitating.

[sdrealtor]

Go to FLA and tell me the high end is levitating.

[sdrealtor]

Go to FLA and tell me the high end is levitating.

[sdrealtor]

Go to FLA and tell me the high end is levitating.

[Author]

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