Wells Fargo has reduced mortgage balances on 43,500 option ARM’s and counting

[patientrenter]

[quote=Bugs]I haven’t been around for a while. Have you guys discussed the possibility of the incomplete return-to-trend yet? What happens if the current correction cycle stops short of returning to trend and starts into increase prematurely? Do we set ourselves up for another even more devastating round of losses or is the general concensus one of no blood – no foul?[/quote]

Bugs, nice to hear from you. I think that, just as govt intervention in the US housing market back in the 1930’s and 1940’s (Fannie and Freddie and 30-year fixed rate mortgages) permanently moved home prices up, and home interest deductibility did the same thing, so what’s happening now marks a permanent increase in govt support for high home prices.

How much higher? Too hard to tell. We won’t even know for sure which of the new govt home price support programs will become permanent until maybe 5 or 10 years from now.

I would be very interested to hear your thoughts.

[Bugs]

Can someone tell me why the prospect of high home prices appeals to the government? I mean, apart from not punishing the fools that were playing the RE market and the banks that lent them the money to do it.

Over the long term it seems to me that the effects of a housing price structure that consumes a larger portion of a workerbee’s paycheck is to permanently reduce their purchasing power for everything else. It reduces the percentage of the population that can share in the American Dream. It widens the gap between haves and have-nots.

I would normally think that all these readily observable results would be an anathema to all of the political progressives and at least some of the political conservatives alike.

[Bugs]

Can someone tell me why the prospect of high home prices appeals to the government? I mean, apart from not punishing the fools that were playing the RE market and the banks that lent them the money to do it.

Over the long term it seems to me that the effects of a housing price structure that consumes a larger portion of a workerbee’s paycheck is to permanently reduce their purchasing power for everything else. It reduces the percentage of the population that can share in the American Dream. It widens the gap between haves and have-nots.

I would normally think that all these readily observable results would be an anathema to all of the political progressives and at least some of the political conservatives alike.

[Bugs]

Can someone tell me why the prospect of high home prices appeals to the government? I mean, apart from not punishing the fools that were playing the RE market and the banks that lent them the money to do it.

Over the long term it seems to me that the effects of a housing price structure that consumes a larger portion of a workerbee’s paycheck is to permanently reduce their purchasing power for everything else. It reduces the percentage of the population that can share in the American Dream. It widens the gap between haves and have-nots.

I would normally think that all these readily observable results would be an anathema to all of the political progressives and at least some of the political conservatives alike.

[Bugs]

Can someone tell me why the prospect of high home prices appeals to the government? I mean, apart from not punishing the fools that were playing the RE market and the banks that lent them the money to do it.

Over the long term it seems to me that the effects of a housing price structure that consumes a larger portion of a workerbee’s paycheck is to permanently reduce their purchasing power for everything else. It reduces the percentage of the population that can share in the American Dream. It widens the gap between haves and have-nots.

I would normally think that all these readily observable results would be an anathema to all of the political progressives and at least some of the political conservatives alike.

[Bugs]

Can someone tell me why the prospect of high home prices appeals to the government? I mean, apart from not punishing the fools that were playing the RE market and the banks that lent them the money to do it.

Over the long term it seems to me that the effects of a housing price structure that consumes a larger portion of a workerbee’s paycheck is to permanently reduce their purchasing power for everything else. It reduces the percentage of the population that can share in the American Dream. It widens the gap between haves and have-nots.

I would normally think that all these readily observable results would be an anathema to all of the political progressives and at least some of the political conservatives alike.

[Arraya]

It’s NOT the government except for their compliance with wall street. It’s ALL the major banks balance sheets. Home price levels are directly linked to banks solvency. Which are heavily manipulated now with literally fraudulent accounting.

[Arraya]

It’s NOT the government except for their compliance with wall street. It’s ALL the major banks balance sheets. Home price levels are directly linked to banks solvency. Which are heavily manipulated now with literally fraudulent accounting.

[Arraya]

It’s NOT the government except for their compliance with wall street. It’s ALL the major banks balance sheets. Home price levels are directly linked to banks solvency. Which are heavily manipulated now with literally fraudulent accounting.

[Arraya]

It’s NOT the government except for their compliance with wall street. It’s ALL the major banks balance sheets. Home price levels are directly linked to banks solvency. Which are heavily manipulated now with literally fraudulent accounting.

[Arraya]

It’s NOT the government except for their compliance with wall street. It’s ALL the major banks balance sheets. Home price levels are directly linked to banks solvency. Which are heavily manipulated now with literally fraudulent accounting.

[(former)FormerSanDiegan]

[quote=sdrealtor]I think we are all pretty much in concensus that there is another leg down. Where we differ is how big and how quickly it will happen. That being said most seem to agree that the low end may have bounced off its bottom, that the middle is getting close and that the high end has plenty of work ahead.[/quote]

I don’t think we will go significantly below the lows set in Spring 2009 on aggregate in San Diego.
Aggregate San Diego prices have already gone up by 10%. I could see retesting those lows at some point over the next year or two, but don;t think we will go much below those levels.
Part of the reason is that during the spring the market was very skewed (perhaps artificially) towards the low end. The other reasons are based on long-term fundamental relationships between costs of ownership and costs of rent. Affordability is a a multi-decade high in San Diego.

Of course there are plenty of wild cards that will make it different this time, such as the dollar decline, jobs never coming back, etc. But I wouldn’t be too surprised if over the next 3 years prices are within +/- 10% of where they stood in July 2009.

Oh yeah, I almost forget the real reason that I think we hit bottom is because I called it here 😉

http://piggington.com/welcome_to_the_bottom

[(former)FormerSanDiegan]

[quote=sdrealtor]I think we are all pretty much in concensus that there is another leg down. Where we differ is how big and how quickly it will happen. That being said most seem to agree that the low end may have bounced off its bottom, that the middle is getting close and that the high end has plenty of work ahead.[/quote]

I don’t think we will go significantly below the lows set in Spring 2009 on aggregate in San Diego.
Aggregate San Diego prices have already gone up by 10%. I could see retesting those lows at some point over the next year or two, but don;t think we will go much below those levels.
Part of the reason is that during the spring the market was very skewed (perhaps artificially) towards the low end. The other reasons are based on long-term fundamental relationships between costs of ownership and costs of rent. Affordability is a a multi-decade high in San Diego.

Of course there are plenty of wild cards that will make it different this time, such as the dollar decline, jobs never coming back, etc. But I wouldn’t be too surprised if over the next 3 years prices are within +/- 10% of where they stood in July 2009.

Oh yeah, I almost forget the real reason that I think we hit bottom is because I called it here 😉

http://piggington.com/welcome_to_the_bottom

[(former)FormerSanDiegan]

[quote=sdrealtor]I think we are all pretty much in concensus that there is another leg down. Where we differ is how big and how quickly it will happen. That being said most seem to agree that the low end may have bounced off its bottom, that the middle is getting close and that the high end has plenty of work ahead.[/quote]

I don’t think we will go significantly below the lows set in Spring 2009 on aggregate in San Diego.
Aggregate San Diego prices have already gone up by 10%. I could see retesting those lows at some point over the next year or two, but don;t think we will go much below those levels.
Part of the reason is that during the spring the market was very skewed (perhaps artificially) towards the low end. The other reasons are based on long-term fundamental relationships between costs of ownership and costs of rent. Affordability is a a multi-decade high in San Diego.

Of course there are plenty of wild cards that will make it different this time, such as the dollar decline, jobs never coming back, etc. But I wouldn’t be too surprised if over the next 3 years prices are within +/- 10% of where they stood in July 2009.

Oh yeah, I almost forget the real reason that I think we hit bottom is because I called it here 😉

http://piggington.com/welcome_to_the_bottom

[(former)FormerSanDiegan]

[quote=sdrealtor]I think we are all pretty much in concensus that there is another leg down. Where we differ is how big and how quickly it will happen. That being said most seem to agree that the low end may have bounced off its bottom, that the middle is getting close and that the high end has plenty of work ahead.[/quote]

I don’t think we will go significantly below the lows set in Spring 2009 on aggregate in San Diego.
Aggregate San Diego prices have already gone up by 10%. I could see retesting those lows at some point over the next year or two, but don;t think we will go much below those levels.
Part of the reason is that during the spring the market was very skewed (perhaps artificially) towards the low end. The other reasons are based on long-term fundamental relationships between costs of ownership and costs of rent. Affordability is a a multi-decade high in San Diego.

Of course there are plenty of wild cards that will make it different this time, such as the dollar decline, jobs never coming back, etc. But I wouldn’t be too surprised if over the next 3 years prices are within +/- 10% of where they stood in July 2009.

Oh yeah, I almost forget the real reason that I think we hit bottom is because I called it here 😉

http://piggington.com/welcome_to_the_bottom

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