Housing won’t hit bottom ’til 2012

[Anonymous]

[quote=FormerSanDiegan]
If interest rates rise conmsiderably, it likely means that there is some sort of recovery. The important factors on these resets will be 1) how long do rates stay this low; and 2) when rates do go back up will they be doing so in a growth environment; 3) how underwater are the loans when the rates go up.

It’s amazing what a few years of low interest rates will do to knock down the principal in a loan.

The net effect of the “second wave” of resets is that the impact will be spread over a number of years (e.g. half a decade or more), as opposed to the intial wave, in which resets at 7-8% triggered defaults and most went bad over about a 12-month period.[/quote]

Are you serious? If interest rates rise considerably it is not a going to be because of a recovery. It will be because our foreign creditors have lost confidence and refuse to fund any more of our debt. That is already starting to happen, it is being covered up by the Feds purchasing programs.

Even if the economy improved, rising interest rates would still be disastrous. There are so many people out there who still have good jobs but are living on the edge due to their interest only and neg-am loans. I know and work with several people in this category. Just cause the economy improves doesn’t mean their salaries are all of a sudden going to jump. The payment shocks caused by rising interest rates will push many folks over the edge.

[CA renter]

[quote=deadzone][quote=FormerSanDiegan]
If interest rates rise conmsiderably, it likely means that there is some sort of recovery. The important factors on these resets will be 1) how long do rates stay this low; and 2) when rates do go back up will they be doing so in a growth environment; 3) how underwater are the loans when the rates go up.

It’s amazing what a few years of low interest rates will do to knock down the principal in a loan.

The net effect of the “second wave” of resets is that the impact will be spread over a number of years (e.g. half a decade or more), as opposed to the intial wave, in which resets at 7-8% triggered defaults and most went bad over about a 12-month period.[/quote]

Are you serious? If interest rates rise considerably it is not a going to be because of a recovery. It will be because our foreign creditors have lost confidence and refuse to fund any more of our debt. That is already starting to happen, it is being covered up by the Feds purchasing programs.

Even if the economy improved, rising interest rates would still be disastrous. There are so many people out there who still have good jobs but are living on the edge due to their interest only and neg-am loans. I know and work with several people in this category. Just cause the economy improves doesn’t mean their salaries are all of a sudden going to jump. The payment shocks caused by rising interest rates will push many folks over the edge.[/quote]

Agree with deadzone on this.

Back in 2007/2008, interest rates were beginning to skyrocket, and it sure wasn’t because the economy was doing so well. The only reason we are seeing these low rates is because the Fed/govt (taxpayers!) are guaranteeing so much of our debt.

If the Federal Reserve and govt were to step back tomorrow, and not guarantee or provide any additional loans, what do you think would happen to interest rates?

[CA renter]

[quote=deadzone][quote=FormerSanDiegan]
If interest rates rise conmsiderably, it likely means that there is some sort of recovery. The important factors on these resets will be 1) how long do rates stay this low; and 2) when rates do go back up will they be doing so in a growth environment; 3) how underwater are the loans when the rates go up.

It’s amazing what a few years of low interest rates will do to knock down the principal in a loan.

The net effect of the “second wave” of resets is that the impact will be spread over a number of years (e.g. half a decade or more), as opposed to the intial wave, in which resets at 7-8% triggered defaults and most went bad over about a 12-month period.[/quote]

Are you serious? If interest rates rise considerably it is not a going to be because of a recovery. It will be because our foreign creditors have lost confidence and refuse to fund any more of our debt. That is already starting to happen, it is being covered up by the Feds purchasing programs.

Even if the economy improved, rising interest rates would still be disastrous. There are so many people out there who still have good jobs but are living on the edge due to their interest only and neg-am loans. I know and work with several people in this category. Just cause the economy improves doesn’t mean their salaries are all of a sudden going to jump. The payment shocks caused by rising interest rates will push many folks over the edge.[/quote]

Agree with deadzone on this.

Back in 2007/2008, interest rates were beginning to skyrocket, and it sure wasn’t because the economy was doing so well. The only reason we are seeing these low rates is because the Fed/govt (taxpayers!) are guaranteeing so much of our debt.

If the Federal Reserve and govt were to step back tomorrow, and not guarantee or provide any additional loans, what do you think would happen to interest rates?

[CA renter]

[quote=deadzone][quote=FormerSanDiegan]
If interest rates rise conmsiderably, it likely means that there is some sort of recovery. The important factors on these resets will be 1) how long do rates stay this low; and 2) when rates do go back up will they be doing so in a growth environment; 3) how underwater are the loans when the rates go up.

It’s amazing what a few years of low interest rates will do to knock down the principal in a loan.

The net effect of the “second wave” of resets is that the impact will be spread over a number of years (e.g. half a decade or more), as opposed to the intial wave, in which resets at 7-8% triggered defaults and most went bad over about a 12-month period.[/quote]

Are you serious? If interest rates rise considerably it is not a going to be because of a recovery. It will be because our foreign creditors have lost confidence and refuse to fund any more of our debt. That is already starting to happen, it is being covered up by the Feds purchasing programs.

Even if the economy improved, rising interest rates would still be disastrous. There are so many people out there who still have good jobs but are living on the edge due to their interest only and neg-am loans. I know and work with several people in this category. Just cause the economy improves doesn’t mean their salaries are all of a sudden going to jump. The payment shocks caused by rising interest rates will push many folks over the edge.[/quote]

Agree with deadzone on this.

Back in 2007/2008, interest rates were beginning to skyrocket, and it sure wasn’t because the economy was doing so well. The only reason we are seeing these low rates is because the Fed/govt (taxpayers!) are guaranteeing so much of our debt.

If the Federal Reserve and govt were to step back tomorrow, and not guarantee or provide any additional loans, what do you think would happen to interest rates?

[CA renter]

[quote=deadzone][quote=FormerSanDiegan]
If interest rates rise conmsiderably, it likely means that there is some sort of recovery. The important factors on these resets will be 1) how long do rates stay this low; and 2) when rates do go back up will they be doing so in a growth environment; 3) how underwater are the loans when the rates go up.

It’s amazing what a few years of low interest rates will do to knock down the principal in a loan.

The net effect of the “second wave” of resets is that the impact will be spread over a number of years (e.g. half a decade or more), as opposed to the intial wave, in which resets at 7-8% triggered defaults and most went bad over about a 12-month period.[/quote]

Are you serious? If interest rates rise considerably it is not a going to be because of a recovery. It will be because our foreign creditors have lost confidence and refuse to fund any more of our debt. That is already starting to happen, it is being covered up by the Feds purchasing programs.

Even if the economy improved, rising interest rates would still be disastrous. There are so many people out there who still have good jobs but are living on the edge due to their interest only and neg-am loans. I know and work with several people in this category. Just cause the economy improves doesn’t mean their salaries are all of a sudden going to jump. The payment shocks caused by rising interest rates will push many folks over the edge.[/quote]

Agree with deadzone on this.

Back in 2007/2008, interest rates were beginning to skyrocket, and it sure wasn’t because the economy was doing so well. The only reason we are seeing these low rates is because the Fed/govt (taxpayers!) are guaranteeing so much of our debt.

If the Federal Reserve and govt were to step back tomorrow, and not guarantee or provide any additional loans, what do you think would happen to interest rates?

[CA renter]

[quote=deadzone][quote=FormerSanDiegan]
If interest rates rise conmsiderably, it likely means that there is some sort of recovery. The important factors on these resets will be 1) how long do rates stay this low; and 2) when rates do go back up will they be doing so in a growth environment; 3) how underwater are the loans when the rates go up.

It’s amazing what a few years of low interest rates will do to knock down the principal in a loan.

The net effect of the “second wave” of resets is that the impact will be spread over a number of years (e.g. half a decade or more), as opposed to the intial wave, in which resets at 7-8% triggered defaults and most went bad over about a 12-month period.[/quote]

Are you serious? If interest rates rise considerably it is not a going to be because of a recovery. It will be because our foreign creditors have lost confidence and refuse to fund any more of our debt. That is already starting to happen, it is being covered up by the Feds purchasing programs.

Even if the economy improved, rising interest rates would still be disastrous. There are so many people out there who still have good jobs but are living on the edge due to their interest only and neg-am loans. I know and work with several people in this category. Just cause the economy improves doesn’t mean their salaries are all of a sudden going to jump. The payment shocks caused by rising interest rates will push many folks over the edge.[/quote]

Agree with deadzone on this.

Back in 2007/2008, interest rates were beginning to skyrocket, and it sure wasn’t because the economy was doing so well. The only reason we are seeing these low rates is because the Fed/govt (taxpayers!) are guaranteeing so much of our debt.

If the Federal Reserve and govt were to step back tomorrow, and not guarantee or provide any additional loans, what do you think would happen to interest rates?

[CA renter]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

We have been watching a few different zip codes, but they are all in areas that were propped up by govt/Fed intervention. Ideally, we want to buy so we don’t have to commute very far, so that limits our options to a large extent.

Our rental is perfect for us, which is a bit of a problem, because there is little/no incentive for us to buy an inferior home/area for more money (which is still the case for us right now). In a way, there is a downside to having a nice rental and good landlords — you never want to leave. 😉

[CA renter]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

We have been watching a few different zip codes, but they are all in areas that were propped up by govt/Fed intervention. Ideally, we want to buy so we don’t have to commute very far, so that limits our options to a large extent.

Our rental is perfect for us, which is a bit of a problem, because there is little/no incentive for us to buy an inferior home/area for more money (which is still the case for us right now). In a way, there is a downside to having a nice rental and good landlords — you never want to leave. 😉

[CA renter]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

We have been watching a few different zip codes, but they are all in areas that were propped up by govt/Fed intervention. Ideally, we want to buy so we don’t have to commute very far, so that limits our options to a large extent.

Our rental is perfect for us, which is a bit of a problem, because there is little/no incentive for us to buy an inferior home/area for more money (which is still the case for us right now). In a way, there is a downside to having a nice rental and good landlords — you never want to leave. 😉

[CA renter]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

We have been watching a few different zip codes, but they are all in areas that were propped up by govt/Fed intervention. Ideally, we want to buy so we don’t have to commute very far, so that limits our options to a large extent.

Our rental is perfect for us, which is a bit of a problem, because there is little/no incentive for us to buy an inferior home/area for more money (which is still the case for us right now). In a way, there is a downside to having a nice rental and good landlords — you never want to leave. 😉

[CA renter]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

We have been watching a few different zip codes, but they are all in areas that were propped up by govt/Fed intervention. Ideally, we want to buy so we don’t have to commute very far, so that limits our options to a large extent.

Our rental is perfect for us, which is a bit of a problem, because there is little/no incentive for us to buy an inferior home/area for more money (which is still the case for us right now). In a way, there is a downside to having a nice rental and good landlords — you never want to leave. 😉

[pemeliza]

Looks like the bond rout is finally on. Not good for real estate, which I own, but I am very happy to see the clowns holding long term treasuries finally taking a few hits for a change.

sdrealtor, as far as your coastal deal that is 150k+ below market, remember that today’s screaming deal is tomorrows comp. I have seen this happen now time and time again. In a market where no buyer wants to pay as much as the last guy, these kind of “killer deals” eventually have a way of bringing down prices. Until the buyer psychology shifts I see this trend continuing. The recent moon launch in interest rates isn’t going to help much with the psychology especially at the mid to high end where buyers are less likely to “panic” and lock in before rates go higher.

[pemeliza]

Looks like the bond rout is finally on. Not good for real estate, which I own, but I am very happy to see the clowns holding long term treasuries finally taking a few hits for a change.

sdrealtor, as far as your coastal deal that is 150k+ below market, remember that today’s screaming deal is tomorrows comp. I have seen this happen now time and time again. In a market where no buyer wants to pay as much as the last guy, these kind of “killer deals” eventually have a way of bringing down prices. Until the buyer psychology shifts I see this trend continuing. The recent moon launch in interest rates isn’t going to help much with the psychology especially at the mid to high end where buyers are less likely to “panic” and lock in before rates go higher.

[pemeliza]

Looks like the bond rout is finally on. Not good for real estate, which I own, but I am very happy to see the clowns holding long term treasuries finally taking a few hits for a change.

sdrealtor, as far as your coastal deal that is 150k+ below market, remember that today’s screaming deal is tomorrows comp. I have seen this happen now time and time again. In a market where no buyer wants to pay as much as the last guy, these kind of “killer deals” eventually have a way of bringing down prices. Until the buyer psychology shifts I see this trend continuing. The recent moon launch in interest rates isn’t going to help much with the psychology especially at the mid to high end where buyers are less likely to “panic” and lock in before rates go higher.

[pemeliza]

Looks like the bond rout is finally on. Not good for real estate, which I own, but I am very happy to see the clowns holding long term treasuries finally taking a few hits for a change.

sdrealtor, as far as your coastal deal that is 150k+ below market, remember that today’s screaming deal is tomorrows comp. I have seen this happen now time and time again. In a market where no buyer wants to pay as much as the last guy, these kind of “killer deals” eventually have a way of bringing down prices. Until the buyer psychology shifts I see this trend continuing. The recent moon launch in interest rates isn’t going to help much with the psychology especially at the mid to high end where buyers are less likely to “panic” and lock in before rates go higher.

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