- This topic has 36 replies, 12 voices, and was last updated 17 years, 10 months ago by
powayseller.
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August 26, 2006 at 11:41 AM #33387August 26, 2006 at 11:55 AM #33390
Anonymous
GuestPS, I couldn’t agree more with your analysis of the impact of drying up credit/liquidity/FNMA retreat on ability to buy and, ultimately, prices.
It may be overboard (but I think we may be in for it), but I’m reading up on the Great Depression, from books that I saw on Beartopia: Anatomy of Crash (very good), Just Yesterday (life in the 20s) (excellent), and, next, Since Yesterday (life in the 30s).
August 26, 2006 at 4:01 PM #33427PD
ParticipantHere is an example of an irrational price:
45 Tunapuna Lane, Coronado 92118
Price reduced to $1,380,000 to $1,425,000He paid $1,325,000 on 9/16/05
Is his ARM about to reset? Was this an investment purchase? Why is he selling now? Has he read Piggingtons?August 27, 2006 at 7:52 AM #33476carlislematthew
ParticipantWhen credit dries up and buyers need 10% down, the demand for $1mil+ properties will shrivel up.
I hate to state the obvious, but not everyone who buys a house is a first-time buyer that’s been desparately saving money for years.
August 27, 2006 at 9:11 AM #33490powayseller
ParticipantRight carlisle. I was making more of a comment on the fact that many homes were purchased by people with no money down. As the no-money-down loans decrease, the middle tier buyer can’t sell his house, since the $600K buyer was going on 0% down, so the guy can’t move up to the $1 mil + house. I should have been more clear.
August 27, 2006 at 11:44 AM #33516carlislematthew
ParticipantI was making more of a comment on the fact that many homes were purchased by people with no money down. As the no-money-down loans decrease, the middle tier buyer can’t sell his house, since the $600K buyer was going on 0% down, so the guy can’t move up to the $1 mil + house.
OK, I’m with you now. 🙂
I wonder how and when the no-money-down loans will decrease or go away. Perhaps you’ll still be able to get that piggy-back HELOC for the 20%, just at some insane interest rate… i.e. the insurance premium of possible loss is built into the rate, in the same way as intended with sub-prime interest rates.
August 28, 2006 at 6:23 AM #33641powayseller
ParticipantI predict piggybacks will fade away, and mortgage insurance will be required. Maybe piggybacks will be offered to the +750 FICO score borrower. But I’m guessing; I know little about the mortgage business.
I am anxious to see how the lending standards will be tightened as foreclosures rise, both on the government side, and by the investors who’ve been snapping up MBS. This H&R Block scandal was a wake-up call. By next year, we will have many many more.
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