August 26, 2006 at 4:22 PM #7330lendingbubblecontinuesParticipant
Everybody should go back and check their “saved homes” at ZipRealty today: I just did and saw that there were several decent sized reductions on homes I am keenly watching, right before this weekend started.
I am happy too, because one of the reductions is on the home of a guy who smugly taunted me last year (almost one year ago today) with this gem…”so, do you still think there is a housing bubble?” after I had discussed the likelihood of a housing bubble in Spring 2004.
He will be crucified, as he has already moved out of SD, and his house has been rotting on the market since March, despite a price drop of nearly 100K on an original 800K asking price (the house would have fetched this at the peak of the mania). The school district is a main draw of his neighborhood, and guess what??? SCHOOL’S BACK IN—-maybe next year!! Hahahahahaha…
Just wait until the weekend right after Labor Day when people begin to question whether or not they’ll be able to afford the XMAS goose if they don’t sell. This thing is beginning to revv up big time! Hahahahahaha…August 26, 2006 at 4:56 PM #33433ChrispyParticipant
He who laughs last laughs best. Back in late 1999, my then-boyfriend told me all about his recent purchases of tech stocks – and how he kept the NASDAQ as his home page so he could check his gains on a daily basis.
Two years later, he sold at a huge loss, and when I mentioned my earlier warning NOT to buy when everything was hot, he told me gloating was unattractive!
Just checked Zillow on his property – which he told me was valued at $900K last November. It’s now at $648K. I’ll keep my gloats to myself.August 26, 2006 at 5:47 PM #33446PerryChaseParticipant
Chrispy, are you laughing because he’s your ex-boyfriend and not your current bf? Why do you care what his portfolio is?
I don’t blame you. For just a minute, I’d feel satisfied also 🙂August 26, 2006 at 5:51 PM #33447AnonymousGuest
I’d be laughing in relief that he was my ex-boyfriend. Talk about someone who doesn’t get “once burned, twice shy!”August 26, 2006 at 6:24 PM #33451ChrispyParticipant
The reason I care about his porfolio is that I had been investing for a decade before he got started and his quick buy at the top of the market was a decision based on greed and haste. Same as his property buy.
It’s one thing if you carefully analyze investments and then make your move with deliberation and thought. I guess I got miffed because he acted like my caution was a waste of time.
He’s still looking for future investments!August 27, 2006 at 8:19 AM #33482speedingpulletParticipant
Strangely, I’m seeing the opposite…of the 50 or so houses I’m tacking on Zip, 5 of them have had Price Increases over the last few days! Only 1 has had a reduction…August 27, 2006 at 8:35 AM #33484carlislematthewParticipant
Strangely, I’m seeing the opposite…of the 50 or so houses I’m tacking on Zip, 5 of them have had Price Increases over the last few days! Only 1 has had a reduction…
As my mother said, “if you can’t say something nice, don’t say it at all”. Your housing price increase propaganda doesn’t belong on this site!
Please supply stories of crashing prices, imminent recessions, high gas prices and indebted consumers. Let’s get back to the business of validating our own biases!
(I know you’re English, so I don’t technically need to say “I’m kidding”, but I’m going to say it anyway)August 27, 2006 at 9:19 AM #33492socalarmParticipant
i agree. there’s too much mutual confirmation regarding negative data. now that it’s public truth and hysteria is developing rather quickly, shouldn’t the contrarian viewpoint move further along ? joe and jane know the market is tumbling. it’s like an old slapstick skit. the crowd rushes in chasing someone. but he’s already outside. ten seconds later they rush out chasing him. but they never catch him…
what if the sales glut ensures only the bottom end of the market tanks? since the bottom end here is 700k, those will soon revert to mean. but will the middle home segment be as drastically affected ? idle theorizing, so please don’t be offended if this is sounding too naive. the people in middle segment homes are mostly second-time buyers and have put in ‘real money’ so wouldn’t they be more insulated to this drop? also wouldn’t they tend to hold on as long as possible and keep the value relatively higher…?
WW warren buffet do? i think he bet against the dollar…oops never mindAugust 27, 2006 at 9:30 AM #33496powaysellerParticipant
The tiers of the market depend on each other. The middle end softened one year after the low end, because the low end seller couldn’t find a buyer for his home. And so the ripple effect moves up…. In the last downturn, all prices and loctions went down.
What is a middle end buyer? My lab tech who put down $150K on his $650K home in Carmel Valley, whic is worth $1.3 mil today? He has a 5 year I/O loan. When it resets, poof!
What about the millions of Americans, owning their homes since the 1980’s, who cashed out their equity and have none left? Now they are in foreclosure, since the interest payment have gone up so much they can’t make the payments. I found 3 old-timers in very good Poway neighborhoods, purchased in the 1980’s, starting equity refinancings in early 2000’s, and are now in foreclosure.
Don’t forget that many many people took the equity out of their homes. Not only is the equity gone, but they have rising debt payments on those adjusting loans.
Add in the slowing business at builders, lenders, retailers, and you can in foreclosure even with a fixed rate mortgage.
People will hold on as long as possible, and that’s why Ryan Ratcliff calls foreclosures a lagging indicator. He correctly said, “People will eat macaroni and cheese before they’ll stop making their house payment”. But with so many people living on the edge already, with so many adjusting mortgages and overextended credit, time is against them. Ultimately, if you can’t make your payment, you are going to lose your house.
Read the Roubini blog. Yesterday, he disputed the 8 common myths given by housing and economy bulls. Good stuff.August 27, 2006 at 9:55 AM #33499JESParticipant
I know I’ve asked this before, and I wish I could find some stats
Anyone have any hard numbers on the following:
1) Average value of home equity loans per homeowner in San Diego County. (I saw a stat like this for the OC once).
2) Yearly increase in home equity taken out per family in San Diego County.
3) Average mortgage loan to value ratio for cities in San Diego. What do homeowners balances look like compared to estimated value?
4) Average amount of home equity loans for new homeowners compared to those who have lived in homes for 10+ years.
5) Composition of all mortgage loans in San Diego by ARMS, 30 yr. etc. Total number of each, not just the yearly value. (I have seen stats that say such and such percent took out ARMS last year, but I want to know that total for all loans currently in place).August 27, 2006 at 10:28 AM #33504socalarmParticipant
powayseller, thanks for the references. roubini's added to my favourites folder, i gawk at it all the time. just like with this site 🙂 i agree with you. i'm just making quasi-plausible assertions at the risk of being proven wrong.
to my untrained eye, it seems there are two factors – intrinsic (ARM resets) and extrinsic (job losses). don't know economics, is that micro and macro? anyway, if job losses are severe all bets are off, each segment will dip drastically. but if it's mainly about ARM resets, and rates hold steady or dip there might be a mini refi boom and the solvent people will buy more time…what do you think?August 27, 2006 at 11:55 AM #33519sdrealtorParticipant
Unfortunately that is impossible to determine. Many of the home equity loans are HELOCS and there is no way of knowing what has been drawn on them. While some have drawn on them, some havent. For example, I and many friends/clients(on my recommendation) opened the biggest HELOCS we could get on our homes about 18 months ago w/o any need or plans to draw on them but simply as a free safety net for the future. If you check the tax records on my house there is a HELOC of about $400,000. What you dont see is my monthly statement with no balance.August 27, 2006 at 11:59 AM #33525ybcParticipant
“Strangely, I’m seeing the opposite…of the 50 or so houses I’m tacking on Zip, 5 of them have had Price Increases over the last few days! Only 1 has had a reduction…”
Can you tell us more — where and what type of houses and what price range? Also, price increases — you mean listing price increases? It’ll be interesting to know…August 27, 2006 at 12:03 PM #33527carlislematthewParticipant
For example, I and many friends/clients(on my recommendation) opened the biggest HELOCS we could get on our homes about 18 months ago w/o any need or plans to draw on them but simply as a free safety net for the future. If you check the tax records on my house there is a HELOC of about $400,000. What you dont see is my monthly statement with no balance.
I did exactly the same on my previous house, purely for the buffer money. I figured that if things went bad, then I could use actual savings, and then have another pile of credit to dive into before I needed to hit the credit card.
I intend to the do the same when I buy a house soon (don’t worry, not TOO soon!). I’ll put down 20% and then take out a 10% HELOC and not use it… Unless I absolutely HAVE TO of course, by which point I would have lost a job and would not be *able* to get a HELOC at that point in time…
Having said all this, I think we’re in the minority. Most people see a pile of money and spend it. Wait, I said “money”, I meant debt!August 27, 2006 at 12:07 PM #33528ybcParticipant
Does these no balance HELOC carry some cost? I think that for corporations, such credit line charges a fee.
- You must be logged in to reply to this topic.