Will we see a selling panic in housing?

[DaisyDuke]

You got it Temeculaguy.

Bernanke inherited this problem and, IMHO, is addressing it in the most logical way possible for the US directly and globally.

[TheBreeze]

but if the trend is towards millions of foreclosures over the next 6 months, that trend must be stopped and it must be stopped now.

Why must that trend be stopped? Do you think every American should have a house whether he can afford it or not? I say let this bubble pop and don’t try to prop it up. In my opinion, it will be much worse for the economy in the long-term if the fed tries to prop up this bubble. Let the millions of current home owners who never should have been in a home in the first place get foreclosed upon and go back to renting. That’s the way we should have been in the first place and I hope that’s where the market heads back to.

[TheBreeze]

but if the trend is towards millions of foreclosures over the next 6 months, that trend must be stopped and it must be stopped now.

Why must that trend be stopped? Do you think every American should have a house whether he can afford it or not? I say let this bubble pop and don’t try to prop it up. In my opinion, it will be much worse for the economy in the long-term if the fed tries to prop up this bubble. Let the millions of current home owners who never should have been in a home in the first place get foreclosed upon and go back to renting. That’s the way we should have been in the first place and I hope that’s where the market heads back to.

[PD]

Let the market fix itself. The pain will be deep but will end up being over much quicker.

[PD]

Let the market fix itself. The pain will be deep but will end up being over much quicker.

[Navydoc]

I agree with Thebreeze. This situation MUST correct.

I am eternally grateful for these Blogs over the past year, as they helped me avoid the potentially largest financial mistake of my life. I was tranferrred from an overseas post in Japan to Los Angeles for fellowship in June 2006. we were planning on buying in the South Bay area, with plans to return to San Diego in June 2009. As I began searching the SoCal RE market I found these hallowed pages, and chose to rent instead, as I felt taking $100,000 equity hit was a very real possibilty. As I am active duty military there was no chance to stay in LA once fellowship was over.

The ridiculous part is, we came here with a considerarable down payment, and my income is in excess of $200K/y, and I find myself priced out of the housing market (as of now). Coupled with this I have had to face the insufferable criticism of people who earn half what I do and are living in $1M McMansions (don’t hear much from them now though).

I’m not asking to live in the most opulent house in the city, I would just like to see my housing dollar actually buy something decent with a 30 yr fixed.

Hopefully 2009 will bring some welcome reality.

[Navydoc]

I agree with Thebreeze. This situation MUST correct.

I am eternally grateful for these Blogs over the past year, as they helped me avoid the potentially largest financial mistake of my life. I was tranferrred from an overseas post in Japan to Los Angeles for fellowship in June 2006. we were planning on buying in the South Bay area, with plans to return to San Diego in June 2009. As I began searching the SoCal RE market I found these hallowed pages, and chose to rent instead, as I felt taking $100,000 equity hit was a very real possibilty. As I am active duty military there was no chance to stay in LA once fellowship was over.

The ridiculous part is, we came here with a considerarable down payment, and my income is in excess of $200K/y, and I find myself priced out of the housing market (as of now). Coupled with this I have had to face the insufferable criticism of people who earn half what I do and are living in $1M McMansions (don’t hear much from them now though).

I’m not asking to live in the most opulent house in the city, I would just like to see my housing dollar actually buy something decent with a 30 yr fixed.

Hopefully 2009 will bring some welcome reality.

[what_a_disasta]

People who bought before mid 04 don’t want to sell because their cost of ownership is managable and they have nice low tax bills. People who bought after mid 04 cannot afford to sell at a realistic price (so they are fishing for prices that arent realistic, and not having any takers). They will either hang on, if they can afford to, or hand the keys back.

So it’s all up to the banks and the builders. Up until recently, banks and builders could find qualified buyers at retail prices, but that should change now. Both of these groups can afford to drop prices a long way.

[what_a_disasta]

People who bought before mid 04 don’t want to sell because their cost of ownership is managable and they have nice low tax bills. People who bought after mid 04 cannot afford to sell at a realistic price (so they are fishing for prices that arent realistic, and not having any takers). They will either hang on, if they can afford to, or hand the keys back.

So it’s all up to the banks and the builders. Up until recently, banks and builders could find qualified buyers at retail prices, but that should change now. Both of these groups can afford to drop prices a long way.

[temeculaguy]

WAD, you are right about who will drive it down, the builders and banks plus they have less emotion invested. The race has just started, the number of qualified non contingent buyers with a downpayment is drying up and they are going to start fighting over them. I’m probably going to go visit some models in an hour or two, not to buy, just to feel like a rockstar. Once I begin chatting with the sales staff and I divulge my situation as a qualified, non contingent guy who can move in tomorrow I know what a Playboy Playmate walking in the yard of a prison must feel like. Today should be even worse with the events of the week and the lenders tightening. I love standing inventory, it makes them so pleasant to talk to.

[temeculaguy]

WAD, you are right about who will drive it down, the builders and banks plus they have less emotion invested. The race has just started, the number of qualified non contingent buyers with a downpayment is drying up and they are going to start fighting over them. I’m probably going to go visit some models in an hour or two, not to buy, just to feel like a rockstar. Once I begin chatting with the sales staff and I divulge my situation as a qualified, non contingent guy who can move in tomorrow I know what a Playboy Playmate walking in the yard of a prison must feel like. Today should be even worse with the events of the week and the lenders tightening. I love standing inventory, it makes them so pleasant to talk to.

[HereWeGo]

You probably should go ahead and buy now so you can lock in that 7.8% rate on a depreciating 600K asset.

[HereWeGo]

You probably should go ahead and buy now so you can lock in that 7.8% rate on a depreciating 600K asset.

[bob007]

why loan money to people who could not possibly repay them

[bob007]

why loan money to people who could not possibly repay them

[Author]

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