[bearishgurl]

[quote=earlyretirement]The trends don’t look too good for the rest of 2011. I’m not sure how even the biggest bull could try to argue on that one.[/quote]

I’m not a “bull,” ER. I actually think the gov’mt should return the conforming limit to $417K. That’s more than adequate to purchase a $521,250 property with a std 20% downpayment (which is higher than the current median sold comps in most CA areas).

Even if this happened, I STILL don’t believe it would affect the values in coveted coastal areas. There are too many buyers who have the money to purchase exactly what they want where they want in these areas and whatever the govm’t decides to do will have little impact on their decisions. It is what it is.

[bearishgurl]

[quote=earlyretirement]The trends don’t look too good for the rest of 2011. I’m not sure how even the biggest bull could try to argue on that one.[/quote]

I’m not a “bull,” ER. I actually think the gov’mt should return the conforming limit to $417K. That’s more than adequate to purchase a $521,250 property with a std 20% downpayment (which is higher than the current median sold comps in most CA areas).

Even if this happened, I STILL don’t believe it would affect the values in coveted coastal areas. There are too many buyers who have the money to purchase exactly what they want where they want in these areas and whatever the govm’t decides to do will have little impact on their decisions. It is what it is.

[bearishgurl]

[quote=earlyretirement]The trends don’t look too good for the rest of 2011. I’m not sure how even the biggest bull could try to argue on that one.[/quote]

I’m not a “bull,” ER. I actually think the gov’mt should return the conforming limit to $417K. That’s more than adequate to purchase a $521,250 property with a std 20% downpayment (which is higher than the current median sold comps in most CA areas).

Even if this happened, I STILL don’t believe it would affect the values in coveted coastal areas. There are too many buyers who have the money to purchase exactly what they want where they want in these areas and whatever the govm’t decides to do will have little impact on their decisions. It is what it is.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[bearishgurl]

[quote=paramount]Since many piggs are part of the FIRE industries it comes as no surprise so many are pooh-poohing the article and notion that real estate still has a ways to fall. It’s local, it’s this, it’s that, bla bla bla.

Makes perfect sense to me: at some point market forces will overpower gov’t intervention and find true equilibrium.[/quote]

paramount, it’s very simple. Your (bolded) statement is correct with a caveat. “Market forces” are comprised of human buyers and they are different in different locations. Some “market forces” are far more dependent on “gov’t intervention” than others. Those are ARE dependent on “gov’t intervention” will have to offer less in the markets they shop in if the government lowers their loan limit that they will guarantee or pulls out entirely. The markets they DON’T shop in (because they can’t possibly qualify to buy in them) will not be affected by less government intervention.

[bearishgurl]

[quote=paramount]Since many piggs are part of the FIRE industries it comes as no surprise so many are pooh-poohing the article and notion that real estate still has a ways to fall. It’s local, it’s this, it’s that, bla bla bla.

Makes perfect sense to me: at some point market forces will overpower gov’t intervention and find true equilibrium.[/quote]

paramount, it’s very simple. Your (bolded) statement is correct with a caveat. “Market forces” are comprised of human buyers and they are different in different locations. Some “market forces” are far more dependent on “gov’t intervention” than others. Those are ARE dependent on “gov’t intervention” will have to offer less in the markets they shop in if the government lowers their loan limit that they will guarantee or pulls out entirely. The markets they DON’T shop in (because they can’t possibly qualify to buy in them) will not be affected by less government intervention.

[bearishgurl]

[quote=paramount]Since many piggs are part of the FIRE industries it comes as no surprise so many are pooh-poohing the article and notion that real estate still has a ways to fall. It’s local, it’s this, it’s that, bla bla bla.

Makes perfect sense to me: at some point market forces will overpower gov’t intervention and find true equilibrium.[/quote]

paramount, it’s very simple. Your (bolded) statement is correct with a caveat. “Market forces” are comprised of human buyers and they are different in different locations. Some “market forces” are far more dependent on “gov’t intervention” than others. Those are ARE dependent on “gov’t intervention” will have to offer less in the markets they shop in if the government lowers their loan limit that they will guarantee or pulls out entirely. The markets they DON’T shop in (because they can’t possibly qualify to buy in them) will not be affected by less government intervention.

[bearishgurl]

[quote=paramount]Since many piggs are part of the FIRE industries it comes as no surprise so many are pooh-poohing the article and notion that real estate still has a ways to fall. It’s local, it’s this, it’s that, bla bla bla.

Makes perfect sense to me: at some point market forces will overpower gov’t intervention and find true equilibrium.[/quote]

paramount, it’s very simple. Your (bolded) statement is correct with a caveat. “Market forces” are comprised of human buyers and they are different in different locations. Some “market forces” are far more dependent on “gov’t intervention” than others. Those are ARE dependent on “gov’t intervention” will have to offer less in the markets they shop in if the government lowers their loan limit that they will guarantee or pulls out entirely. The markets they DON’T shop in (because they can’t possibly qualify to buy in them) will not be affected by less government intervention.

[bearishgurl]

[quote=paramount]Since many piggs are part of the FIRE industries it comes as no surprise so many are pooh-poohing the article and notion that real estate still has a ways to fall. It’s local, it’s this, it’s that, bla bla bla.

Makes perfect sense to me: at some point market forces will overpower gov’t intervention and find true equilibrium.[/quote]

paramount, it’s very simple. Your (bolded) statement is correct with a caveat. “Market forces” are comprised of human buyers and they are different in different locations. Some “market forces” are far more dependent on “gov’t intervention” than others. Those are ARE dependent on “gov’t intervention” will have to offer less in the markets they shop in if the government lowers their loan limit that they will guarantee or pulls out entirely. The markets they DON’T shop in (because they can’t possibly qualify to buy in them) will not be affected by less government intervention.

[bearishgurl]

[quote=deadzone]Unlike in sdr’s world (where everybody is rich and life is a utopia), I don’t believe everybody is loaded with cash. Of course there are people with cash to put down 20-30% on a non-conforming loan. But, you guys are extremely naive to think that everbody who purchased in the price range had the means to pay 20-30% down. They didn’t have to, so by definition it left the door open for a huge pool of buyers without that kind of cash. Well now it looks like that door will be shut again. It will have significant impact no question.[/quote]

deadzone, I don’t believe ALL homebuyers shopping in the $600K + range are all flush with cash, either. I was referring to those buying in niche coastal markets of predominately custom properties, such as Monterey (ex LJ and DM in SD County).

In less-desirable inland tracts, especially those encumbered by CFD’s, I think many unqualified buyers quickly got in over their heads buying in the over $600K range when they were helped by developers’ designated loan officers (were offered incentives to use them) who put them in 80/20’s, 80/10/10’s, 30 due in 5/7’s, I/O’s and balloon mtg vehicles. Often, there were never any surrounding comps to begin with to command the prices the developers were asking. They just attempted to create their OWN sales comps by making it easy for an unsophisticated buyer to pay top dollar for a house on a substandard lot (often less than 5000 sf).

Yes, I believe the value of inland tracts (east of I-5 in SD County) where the recent sold comps are currently over about $680K could be affected by lower FNMA/FDMC conforming limits. I do NOT believe highly desirable custom areas in coastal zones will be affected, however, as the buyers of each of these types of properties are completely different animals.

edit: I don’t think the lower conforming limit will affect buyers of acreage either (ex East County). This type of buyer is typically 50+ years old and often has plans for new construction or a major gut/rehab prior to even making an offer.

[bearishgurl]

[quote=deadzone]Unlike in sdr’s world (where everybody is rich and life is a utopia), I don’t believe everybody is loaded with cash. Of course there are people with cash to put down 20-30% on a non-conforming loan. But, you guys are extremely naive to think that everbody who purchased in the price range had the means to pay 20-30% down. They didn’t have to, so by definition it left the door open for a huge pool of buyers without that kind of cash. Well now it looks like that door will be shut again. It will have significant impact no question.[/quote]

deadzone, I don’t believe ALL homebuyers shopping in the $600K + range are all flush with cash, either. I was referring to those buying in niche coastal markets of predominately custom properties, such as Monterey (ex LJ and DM in SD County).

In less-desirable inland tracts, especially those encumbered by CFD’s, I think many unqualified buyers quickly got in over their heads buying in the over $600K range when they were helped by developers’ designated loan officers (were offered incentives to use them) who put them in 80/20’s, 80/10/10’s, 30 due in 5/7’s, I/O’s and balloon mtg vehicles. Often, there were never any surrounding comps to begin with to command the prices the developers were asking. They just attempted to create their OWN sales comps by making it easy for an unsophisticated buyer to pay top dollar for a house on a substandard lot (often less than 5000 sf).

Yes, I believe the value of inland tracts (east of I-5 in SD County) where the recent sold comps are currently over about $680K could be affected by lower FNMA/FDMC conforming limits. I do NOT believe highly desirable custom areas in coastal zones will be affected, however, as the buyers of each of these types of properties are completely different animals.

edit: I don’t think the lower conforming limit will affect buyers of acreage either (ex East County). This type of buyer is typically 50+ years old and often has plans for new construction or a major gut/rehab prior to even making an offer.

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