Mortgages look to be headed for drastic changes

[CA renter]

[quote=bearishgurl][quote=CA renter]Absolutely, there are much more affordable houses, even for poor people, in other areas. But what about the working poor right here in San Diego? Unless we want to pay secretaries, clerks, gardeners, maids, cashiers, auto mechanics, etc. $30, $40, $50+/hr, we need to have affordable housing here, too.[/quote]

CAR, if you mean affordable rental housing, we have that here in SD. We have Section 8 vouchers (long waiting list) as well as many units adjusted to the tenants income thru the County Housing Authority and other assistance programs.

http://www.co.san-diego.ca.us/sdhcd/renters/section_eight.html

http://www.sandiego.gov/housing/assistance.shtml

We also have most or all of an entire high rise (UR, correct me if I’m wrong on this) near dtn’s East Village with rents adjusted to tenant’s income. Most of these tenants are dtn workers in all of the occupations you listed.

SDR is correct in that if a tenant cannot afford coastal rents, then they should seek lower rents in East County (quite a bit lower in dtn El Cajon and Lakeside), a lesser-expensive county or state or even Tijuana (and many DO live in TJ and work in SD). A $400K house, even if located in Lemon Grove or Paradise Hills, is NOT a “starter home.” The same size/quality of home cost $70-$80K in parts of OK. If a worker doesn’t have the budget to live on the coast, they can’t live there.

Many years ago, when I had my rental units near NAVSTA 32nd St, it never ceased to amaze me that Navy spouses would move here from rural MO with no HS Diploma/GED and whine about the $625 rent I was asking (for a 2/1.5/1 car gar) and the ‘hood and then tour their military housing alternatives (they weren’t remodeled back then) and complain about those units/’hood and come back and rent from me (while on a waiting list for a presumably “better” mil housing complex). Their sponsors were E3’s/E4’s and these young women were SO PICKY yet had NO education and NO job skills to rent anything better for themselves. ALL wanted to live on the “coast,” lol. (This was long before exorbitant housing allowances were paid to married servicemen.)[/quote]

Yes, people can rent. OTOH, I strongly disagree with giving Prop 13 protection to landlords. They will claim that this benefits the renters, and in some cases, it does (long-time owners who value good tenants and don’t raise the rent to market rates). However, most LLs charge market rent if they can get it, so the Prop 13 protection is acutally padding their profits, not “keeping people from being taxed out of their homes.” IMHO, if they want Prop 13 protection, they should have to agree to rent control, where the rent increases are tied to property tax increases.

The application of Prop 13 protection to “investment” properties is one of the main reasons we have such a disproportionally low rate of owner-occupied housing in CA.

If it were up to me, we’d take away all “incentives” to invest in residential RE. That way, prices would be low enough that more people could afford to buy their own homes.

[CA renter]

[quote=bearishgurl]I don’t see land prices coming down in SD County. Firstly, we are running out of land (if we haven’t already run out). What is left are slivers of exurbs that will surely be encumbered by costly CFD’s, IF they are ever built on.

Secondly, am I missing something here? Why do first-time homebuyers expect to purchase BRAND-NEW construction? Where did this expectation come from? Even 1st time buyers in cheaper counties and states don’t expect to buy new construction. There is PLENTY of resale inventory in SD County on the market for a first-time buyer. A first time buyer with little down has to be able to ACCEPT what is in the resale inventory in their price range, rent or leave the county. It’s that simple.[/quote]

Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.

I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.

[CA renter]

[quote=bearishgurl]I don’t see land prices coming down in SD County. Firstly, we are running out of land (if we haven’t already run out). What is left are slivers of exurbs that will surely be encumbered by costly CFD’s, IF they are ever built on.

Secondly, am I missing something here? Why do first-time homebuyers expect to purchase BRAND-NEW construction? Where did this expectation come from? Even 1st time buyers in cheaper counties and states don’t expect to buy new construction. There is PLENTY of resale inventory in SD County on the market for a first-time buyer. A first time buyer with little down has to be able to ACCEPT what is in the resale inventory in their price range, rent or leave the county. It’s that simple.[/quote]

Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.

I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.

[CA renter]

[quote=bearishgurl]I don’t see land prices coming down in SD County. Firstly, we are running out of land (if we haven’t already run out). What is left are slivers of exurbs that will surely be encumbered by costly CFD’s, IF they are ever built on.

Secondly, am I missing something here? Why do first-time homebuyers expect to purchase BRAND-NEW construction? Where did this expectation come from? Even 1st time buyers in cheaper counties and states don’t expect to buy new construction. There is PLENTY of resale inventory in SD County on the market for a first-time buyer. A first time buyer with little down has to be able to ACCEPT what is in the resale inventory in their price range, rent or leave the county. It’s that simple.[/quote]

Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.

I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.

[CA renter]

[quote=bearishgurl]I don’t see land prices coming down in SD County. Firstly, we are running out of land (if we haven’t already run out). What is left are slivers of exurbs that will surely be encumbered by costly CFD’s, IF they are ever built on.

Secondly, am I missing something here? Why do first-time homebuyers expect to purchase BRAND-NEW construction? Where did this expectation come from? Even 1st time buyers in cheaper counties and states don’t expect to buy new construction. There is PLENTY of resale inventory in SD County on the market for a first-time buyer. A first time buyer with little down has to be able to ACCEPT what is in the resale inventory in their price range, rent or leave the county. It’s that simple.[/quote]

Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.

I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.

[CA renter]

[quote=bearishgurl]I don’t see land prices coming down in SD County. Firstly, we are running out of land (if we haven’t already run out). What is left are slivers of exurbs that will surely be encumbered by costly CFD’s, IF they are ever built on.

Secondly, am I missing something here? Why do first-time homebuyers expect to purchase BRAND-NEW construction? Where did this expectation come from? Even 1st time buyers in cheaper counties and states don’t expect to buy new construction. There is PLENTY of resale inventory in SD County on the market for a first-time buyer. A first time buyer with little down has to be able to ACCEPT what is in the resale inventory in their price range, rent or leave the county. It’s that simple.[/quote]

Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.

I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.

[Arraya]

The Real Estate Industrial Complex
http://theautomaticearth.blogspot.com/2011/02/february-5-2011-real-estate-industrial.html
Fannie and Freddie got a “blank check” from Treasury Secretary Tim Geithner at the end of the financial crisis. This blank check allows the housing giants to lose as much money as they want, with the taxpayer footing the bill.

Fannie and Freddie use much of this money to buy mortgages from Wall Street at what may be grossly inflated prices. This is a super arrangement for the banks, because they get to unload all their terrible mortgages at prices that won’t produce losses. And it’s fine for Fannie and Freddie because, well, because they have the blank check. But of course there’s no free lunch. And in this scheme, the US taxpayer is, as usual, footing the bill.

In other words, Fannie and Freddie are now doing what the Treasury wanted the original “TARP” bailout to do–use taxpayer money to help banks clean toxic assets off their balance sheets. Unlike the original TARP, however–which justifiably outraged taxpayers–no one knows or cares about what Fannie or Freddie are doing.

So, it’s the perfect bailout.

[Arraya]

The Real Estate Industrial Complex
http://theautomaticearth.blogspot.com/2011/02/february-5-2011-real-estate-industrial.html
Fannie and Freddie got a “blank check” from Treasury Secretary Tim Geithner at the end of the financial crisis. This blank check allows the housing giants to lose as much money as they want, with the taxpayer footing the bill.

Fannie and Freddie use much of this money to buy mortgages from Wall Street at what may be grossly inflated prices. This is a super arrangement for the banks, because they get to unload all their terrible mortgages at prices that won’t produce losses. And it’s fine for Fannie and Freddie because, well, because they have the blank check. But of course there’s no free lunch. And in this scheme, the US taxpayer is, as usual, footing the bill.

In other words, Fannie and Freddie are now doing what the Treasury wanted the original “TARP” bailout to do–use taxpayer money to help banks clean toxic assets off their balance sheets. Unlike the original TARP, however–which justifiably outraged taxpayers–no one knows or cares about what Fannie or Freddie are doing.

So, it’s the perfect bailout.

[Arraya]

The Real Estate Industrial Complex
http://theautomaticearth.blogspot.com/2011/02/february-5-2011-real-estate-industrial.html
Fannie and Freddie got a “blank check” from Treasury Secretary Tim Geithner at the end of the financial crisis. This blank check allows the housing giants to lose as much money as they want, with the taxpayer footing the bill.

Fannie and Freddie use much of this money to buy mortgages from Wall Street at what may be grossly inflated prices. This is a super arrangement for the banks, because they get to unload all their terrible mortgages at prices that won’t produce losses. And it’s fine for Fannie and Freddie because, well, because they have the blank check. But of course there’s no free lunch. And in this scheme, the US taxpayer is, as usual, footing the bill.

In other words, Fannie and Freddie are now doing what the Treasury wanted the original “TARP” bailout to do–use taxpayer money to help banks clean toxic assets off their balance sheets. Unlike the original TARP, however–which justifiably outraged taxpayers–no one knows or cares about what Fannie or Freddie are doing.

So, it’s the perfect bailout.

[Arraya]

The Real Estate Industrial Complex
http://theautomaticearth.blogspot.com/2011/02/february-5-2011-real-estate-industrial.html
Fannie and Freddie got a “blank check” from Treasury Secretary Tim Geithner at the end of the financial crisis. This blank check allows the housing giants to lose as much money as they want, with the taxpayer footing the bill.

Fannie and Freddie use much of this money to buy mortgages from Wall Street at what may be grossly inflated prices. This is a super arrangement for the banks, because they get to unload all their terrible mortgages at prices that won’t produce losses. And it’s fine for Fannie and Freddie because, well, because they have the blank check. But of course there’s no free lunch. And in this scheme, the US taxpayer is, as usual, footing the bill.

In other words, Fannie and Freddie are now doing what the Treasury wanted the original “TARP” bailout to do–use taxpayer money to help banks clean toxic assets off their balance sheets. Unlike the original TARP, however–which justifiably outraged taxpayers–no one knows or cares about what Fannie or Freddie are doing.

So, it’s the perfect bailout.

[Arraya]

The Real Estate Industrial Complex
http://theautomaticearth.blogspot.com/2011/02/february-5-2011-real-estate-industrial.html
Fannie and Freddie got a “blank check” from Treasury Secretary Tim Geithner at the end of the financial crisis. This blank check allows the housing giants to lose as much money as they want, with the taxpayer footing the bill.

Fannie and Freddie use much of this money to buy mortgages from Wall Street at what may be grossly inflated prices. This is a super arrangement for the banks, because they get to unload all their terrible mortgages at prices that won’t produce losses. And it’s fine for Fannie and Freddie because, well, because they have the blank check. But of course there’s no free lunch. And in this scheme, the US taxpayer is, as usual, footing the bill.

In other words, Fannie and Freddie are now doing what the Treasury wanted the original “TARP” bailout to do–use taxpayer money to help banks clean toxic assets off their balance sheets. Unlike the original TARP, however–which justifiably outraged taxpayers–no one knows or cares about what Fannie or Freddie are doing.

So, it’s the perfect bailout.

[bearishgurl]

[quote=CA renter]Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.[/quote]

Assuming arguendo that what you say is true, CAR, and this available land is not an estuary, a wildlife sanctuary, part of a military installation, an old dump, or rocky hills, do you think we need to pipe in MORE water to build yet MORE exurbs? Do you think it is prudent to encourage MORE urban sprawl when there is PLENTY of resale housing available to buy? Should we create MORE CFD’s so we can charge all these new buyers MELLO ROOS for 30-40 years when all our services are being cut back and we may be unable to staff these areas with police and fire services, etc? Do you think our city and county offices and especially courthouses should be able to serve thousands more people when they are already so overwhelmed that they can’t even report to the DMV in a timely manner that a traffic ticket was actually dismissed?

I think not. Now, when building is virtually at a standstill, it’s time to stop and rethink this whole idea of why SD needs to be able to accommodate everyone who wants to be here with NEW CONSTRUCTION for them to move into! Talk about depressing the market further. Isn’t there already several months worth of resale inventory on the market at present?

[quote=CA renter]I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.[/quote]

I stated above that first time buyers with little down (meaning <20%) must accept what is avail in the resale market, rent or move away. If a first-time buyer has =>20% down and can qualify for a larger mortgage, then by all means, they should buy what they are qualified for, new or resale. Whether or not a first-time buyer has spent “several years in college” really has nothing to do with their qualifications. Their downpayment amount, regular and continuing income and credit rating have everything to do with it.

It is not cost-effective for a builder to build a stripped-down “starter home” on an inferior exurb lot that costs the same and pay original permitting fees that cost the same no matter what they build on it. Think about it.

[bearishgurl]

[quote=CA renter]Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.[/quote]

Assuming arguendo that what you say is true, CAR, and this available land is not an estuary, a wildlife sanctuary, part of a military installation, an old dump, or rocky hills, do you think we need to pipe in MORE water to build yet MORE exurbs? Do you think it is prudent to encourage MORE urban sprawl when there is PLENTY of resale housing available to buy? Should we create MORE CFD’s so we can charge all these new buyers MELLO ROOS for 30-40 years when all our services are being cut back and we may be unable to staff these areas with police and fire services, etc? Do you think our city and county offices and especially courthouses should be able to serve thousands more people when they are already so overwhelmed that they can’t even report to the DMV in a timely manner that a traffic ticket was actually dismissed?

I think not. Now, when building is virtually at a standstill, it’s time to stop and rethink this whole idea of why SD needs to be able to accommodate everyone who wants to be here with NEW CONSTRUCTION for them to move into! Talk about depressing the market further. Isn’t there already several months worth of resale inventory on the market at present?

[quote=CA renter]I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.[/quote]

I stated above that first time buyers with little down (meaning <20%) must accept what is avail in the resale market, rent or move away. If a first-time buyer has =>20% down and can qualify for a larger mortgage, then by all means, they should buy what they are qualified for, new or resale. Whether or not a first-time buyer has spent “several years in college” really has nothing to do with their qualifications. Their downpayment amount, regular and continuing income and credit rating have everything to do with it.

It is not cost-effective for a builder to build a stripped-down “starter home” on an inferior exurb lot that costs the same and pay original permitting fees that cost the same no matter what they build on it. Think about it.

[bearishgurl]

[quote=CA renter]Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.[/quote]

Assuming arguendo that what you say is true, CAR, and this available land is not an estuary, a wildlife sanctuary, part of a military installation, an old dump, or rocky hills, do you think we need to pipe in MORE water to build yet MORE exurbs? Do you think it is prudent to encourage MORE urban sprawl when there is PLENTY of resale housing available to buy? Should we create MORE CFD’s so we can charge all these new buyers MELLO ROOS for 30-40 years when all our services are being cut back and we may be unable to staff these areas with police and fire services, etc? Do you think our city and county offices and especially courthouses should be able to serve thousands more people when they are already so overwhelmed that they can’t even report to the DMV in a timely manner that a traffic ticket was actually dismissed?

I think not. Now, when building is virtually at a standstill, it’s time to stop and rethink this whole idea of why SD needs to be able to accommodate everyone who wants to be here with NEW CONSTRUCTION for them to move into! Talk about depressing the market further. Isn’t there already several months worth of resale inventory on the market at present?

[quote=CA renter]I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.[/quote]

I stated above that first time buyers with little down (meaning <20%) must accept what is avail in the resale market, rent or move away. If a first-time buyer has =>20% down and can qualify for a larger mortgage, then by all means, they should buy what they are qualified for, new or resale. Whether or not a first-time buyer has spent “several years in college” really has nothing to do with their qualifications. Their downpayment amount, regular and continuing income and credit rating have everything to do with it.

It is not cost-effective for a builder to build a stripped-down “starter home” on an inferior exurb lot that costs the same and pay original permitting fees that cost the same no matter what they build on it. Think about it.

[bearishgurl]

[quote=CA renter]Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.

We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.

There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.[/quote]

Assuming arguendo that what you say is true, CAR, and this available land is not an estuary, a wildlife sanctuary, part of a military installation, an old dump, or rocky hills, do you think we need to pipe in MORE water to build yet MORE exurbs? Do you think it is prudent to encourage MORE urban sprawl when there is PLENTY of resale housing available to buy? Should we create MORE CFD’s so we can charge all these new buyers MELLO ROOS for 30-40 years when all our services are being cut back and we may be unable to staff these areas with police and fire services, etc? Do you think our city and county offices and especially courthouses should be able to serve thousands more people when they are already so overwhelmed that they can’t even report to the DMV in a timely manner that a traffic ticket was actually dismissed?

I think not. Now, when building is virtually at a standstill, it’s time to stop and rethink this whole idea of why SD needs to be able to accommodate everyone who wants to be here with NEW CONSTRUCTION for them to move into! Talk about depressing the market further. Isn’t there already several months worth of resale inventory on the market at present?

[quote=CA renter]I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.[/quote]

I stated above that first time buyers with little down (meaning <20%) must accept what is avail in the resale market, rent or move away. If a first-time buyer has =>20% down and can qualify for a larger mortgage, then by all means, they should buy what they are qualified for, new or resale. Whether or not a first-time buyer has spent “several years in college” really has nothing to do with their qualifications. Their downpayment amount, regular and continuing income and credit rating have everything to do with it.

It is not cost-effective for a builder to build a stripped-down “starter home” on an inferior exurb lot that costs the same and pay original permitting fees that cost the same no matter what they build on it. Think about it.

[Author]

Posts