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So would you say NOW is a really good time to take out a HELOC buy a couple new Luxury cars, take a vacation, buy a 2nd and 3rd house, refinance those, all with interest only loans?

Or not…

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I just read that in the LA times today too. They also said that wage/salary growth was 3.2%. That got me thinking so I looked at the housing affordiblity index from our friends at the NAR:

http://www.realtor.org/Research.nsf/files/REL0612A.pdf/$FILE/REL0612A.pdf

First I must say I think they fudged these numbers, look at the West:
– Average home price $356,500.
California is much closer to $500k if not over, but fine, this includes AZ, NV, OR, WA and maybe even ID.

– Median income: $61,078.
Any web based search brings in a number for California alone between $47k, to maybe mid $50’s. And of course this doesn’t count any undocumented salaries, which on average are more than likely much lower. CA is also higher than most other states.

The NAR claims an income of $86,064 needed to afford the median house price they gave.

Let’s just “assume” the avg price, and income above are correct.

At the wage growth given in the Times article of 3.2%, that rate will need to continue for 11 years before it catches up with the NAR avg home price above.

And that is of course assuming prices were stagnate those 11 years.

My guess, ignorant and uninformed as I am, is the worst is sitll to come.

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I just saw an ad on TV today for a $500 monthly payment per $150,000 financed. If I remember correctly, they had a $500,000 loan for $1667, $1680, something like that.

Of course the fine print at the bottom was so small and blurry, even if you could make it out, you couldn’t read it fast enough as it scrolled by.

I have to think loans like this are the only reason people are still able to “afford” houses. I have no doubt people can still be suckered into this, even at a time when the trend is certainly downward.

Of course this will only draw out the downturn when these loans reset in 5-10 years.

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“We’re scraping the bottom.”

This guy should be a politician…oh wait.

This guy has called last 4 months the bottom, and now we’re scraping it, with the worst decline in 17 years. Logically, if the declines become relatively worse and worse, it’s not the bottom.

This bubble saw unprecendented speculation, lending leniency, and inflation. The worst is just getting started.

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“It won’t crash the housing market,” she said. “There’s still a lot of people who will buy homes and keep them. As long as no life event comes along that pushes them over the edge, they’ll probably be OK.”

A life event like resetting interest rates? It’s already crashing the market, people are just still in denial.

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PC,

“Of course a rising market will hide all of that.”

I take it you are referring to the formerly rising market that did hide all of that, and not one to come.

I’m curious. I hear about the selling of securities by mortgage companies, to holding companies, and investment insurances and all that stuff the lenders do to minimize or eliminate their risk in these liberal lending practices.

How that will all play out? I can’t imagine it benefits the home owner, but what will the effects be as the market continues to tank?

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I thought I recently heard something on the news about Texas cracking down on landlords renting to illegals, and of course those objecting were claiming racism. Anyone else hear that? They should do that here.

As far as them building more homes, the heading was enough to know the article is just more propaganda by the same people who said real estate has hit bottom for the last 4 months in a row.

I say let them build more. It will just drive prices down more.

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(double post)

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Here, this was just posted on MSN today.

http://realestate.msn.com/buying/Article2.aspx?cp-documentid=2507006

When do those 1.5 Trillion in adjustable rate loans reset?

The worst is so NOT over…

By the way, what’s the best way to attempt to purchase a foreclosure?

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Here, this was just posted on MSN today.

http://realestate.msn.com/buying/Article2.aspx?cp-documentid=2507006

When do those 1.5 Trillion in adjustable rate loans reset?

The worst is so NOT over…

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I don’t doubt that this is a terrible time to be on the selling side at all. I currently rent and if nothing else, thought I could become an agent for my own purchase.

Just as people jumped on the bandwagon when it was hot, I’m sure many will jump off now. So why get on now? Why not? I have a steady job, I don’t necessarily need the income, by the time I actually become an agent the market may even be lower, but it will pick up again eventually, and by then I might have a clue on what you guys talk about on here. 🙂

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Thanks for the comments guys, though I sohuld learn to how to spell Real first.

I know the market is slow, and even if the worst is not over yet, it’s still something I’d like to look into. I have no intention of leaving my current job, and if I did get started anytime soon it would be part time initially.

You could say I’m getting a head start on the next bubble.

Personally, I hope it does keep going down so I can afford a house soon.

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I’m not sure this is what you’re looking for, but this is the only place I know of:

http://www.treas.gov/auctions

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I love that the realtor is anonymous. A measure of protection against a backlash from good ol’ Mr. Lerah?

Finally some truth on the situation though. I’m tired of hearing about this so called “soft landing,” and that rates will probably go back down. The FED would be obtuse to slash rates again, because Americans need to start saving money, not spending it on houses they can’t afford again.

Just like there was no bubble, now there IS a soft landing, and an end to the decline. These people have dug themselves holes, and they are still falling to the bottom of them. It feels soft because they haven’t hit it yet.

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I’ve got a question…or two

Most of you are suggesting a decrease anywhere from 3-10% for 2007. I’ve also read that the market may decline for the next 6-8 years or so. So if the decline started last year, let’s suppose 2012 is the bottom.

If 2007 is in fact the worst year as far as a % decline, do you still expect decreases over the following 5 years even if they are less each year?

The reason I ask, is because in the previous housing bubbles graphs I’ve seen on here, I believe it was pointed out that average prices generally came right back to where they were when the bubble started. Enter the NAR claim that prices were undervalued. Well now they’re overvalued.

Home prices have doubled over the past 6-7 years in many areas, and in some areas even tripled. So given what we know about previous bubbles, shouldn’t we expect declines upwards of 30-40 or even 50% say over the next 6-8 years?

That’s just based on historical trends. If I’ve learned anything on here, it’s that ARM’s and Sub-primes have run rampant and will only increase the downturn.

I’m a neohpyte though, that’s why I’m asking.

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