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CricketOnTheHearth
ParticipantThis is a great and timely post because I, too, am “exasperated” and confused by all the conflicting data flying around. Some indicators are claiming a “bottom” (such as Robert Campbell’s “Crash Index” in his newsletter that I get) while other indicators (such as my wallet!) are saying no way, jose.
Despite supposedly expert indicators such as the crash index, my gut is just not seeing a bottom right now. With all the Alt-A recasts coming down the pike right now, unemployment sucking… and I am not sure how secure my own job is right now. I want to get something on a fixed mortgage for absolutely the lowest monthly payment I can get, so if I do lose the current job I can still keep my dwelling on a lower income.
Rent is just right out. Rent gets hiked every year and as I have complained before, my pay has not risen to cover it. In today’s sucky employment market, jumping to another, higher-paying job is looking unlikely at best.
So what would a price look like today if it was truly equivalent to the bottom we made in 1995-6? Well, I just happened to look at some condos in my area back then, which were selling for $100,000, and I took the CPI figures (use “Consumer Price Index History Table”) and calculated what the equivalent price of that place would be today after inflation.
Turns out a $100,000 condo in 1995 would be equivalent to a $140,500 condo today because of inflation. This is equivalent to about 1999-2000 “nominal” price per Zillow (same exact condos). To top it off, these actual same condos that I looked at in 1995 are currently selling for $200,000 or somewhat above (well, actually, being *offered* for that). So, this implies no bottom yet, at least in my area.
But all this implies a “normal” market where all the foreclosures come out and settle prices back to a realistic level. Can the government(s) and the banks jimmy the market and keep these prices up at bubble levels (and out of my reach without a long and exasperating commute?) I worry…
ParticipantThis is a great and timely post because I, too, am “exasperated” and confused by all the conflicting data flying around. Some indicators are claiming a “bottom” (such as Robert Campbell’s “Crash Index” in his newsletter that I get) while other indicators (such as my wallet!) are saying no way, jose.
Despite supposedly expert indicators such as the crash index, my gut is just not seeing a bottom right now. With all the Alt-A recasts coming down the pike right now, unemployment sucking… and I am not sure how secure my own job is right now. I want to get something on a fixed mortgage for absolutely the lowest monthly payment I can get, so if I do lose the current job I can still keep my dwelling on a lower income.
Rent is just right out. Rent gets hiked every year and as I have complained before, my pay has not risen to cover it. In today’s sucky employment market, jumping to another, higher-paying job is looking unlikely at best.
So what would a price look like today if it was truly equivalent to the bottom we made in 1995-6? Well, I just happened to look at some condos in my area back then, which were selling for $100,000, and I took the CPI figures (use “Consumer Price Index History Table”) and calculated what the equivalent price of that place would be today after inflation.
Turns out a $100,000 condo in 1995 would be equivalent to a $140,500 condo today because of inflation. This is equivalent to about 1999-2000 “nominal” price per Zillow (same exact condos). To top it off, these actual same condos that I looked at in 1995 are currently selling for $200,000 or somewhat above (well, actually, being *offered* for that). So, this implies no bottom yet, at least in my area.
But all this implies a “normal” market where all the foreclosures come out and settle prices back to a realistic level. Can the government(s) and the banks jimmy the market and keep these prices up at bubble levels (and out of my reach without a long and exasperating commute?) I worry…
ParticipantThis is a great and timely post because I, too, am “exasperated” and confused by all the conflicting data flying around. Some indicators are claiming a “bottom” (such as Robert Campbell’s “Crash Index” in his newsletter that I get) while other indicators (such as my wallet!) are saying no way, jose.
Despite supposedly expert indicators such as the crash index, my gut is just not seeing a bottom right now. With all the Alt-A recasts coming down the pike right now, unemployment sucking… and I am not sure how secure my own job is right now. I want to get something on a fixed mortgage for absolutely the lowest monthly payment I can get, so if I do lose the current job I can still keep my dwelling on a lower income.
Rent is just right out. Rent gets hiked every year and as I have complained before, my pay has not risen to cover it. In today’s sucky employment market, jumping to another, higher-paying job is looking unlikely at best.
So what would a price look like today if it was truly equivalent to the bottom we made in 1995-6? Well, I just happened to look at some condos in my area back then, which were selling for $100,000, and I took the CPI figures (use “Consumer Price Index History Table”) and calculated what the equivalent price of that place would be today after inflation.
Turns out a $100,000 condo in 1995 would be equivalent to a $140,500 condo today because of inflation. This is equivalent to about 1999-2000 “nominal” price per Zillow (same exact condos). To top it off, these actual same condos that I looked at in 1995 are currently selling for $200,000 or somewhat above (well, actually, being *offered* for that). So, this implies no bottom yet, at least in my area.
But all this implies a “normal” market where all the foreclosures come out and settle prices back to a realistic level. Can the government(s) and the banks jimmy the market and keep these prices up at bubble levels (and out of my reach without a long and exasperating commute?) I worry…
ParticipantNo, socratt, I don’t think it’s just you. I feel like Alice a bit myself these days, wondering what’s real and what’s illusion.
There certainly appears to be some kind of “plot” going on, but I’m hazy as to what its ultimate goal is. One way of viewing it puts together a number of the factors (some rumored) which are in play:
1) Loads of houses being pried out of private, single-person hands via the foreclosure crisis.
2) Indeterminate, large numbers of these foreclosures are not coming onto the market. Is it because of the legislated delays last fall/winter? Or is it because the banks are selling them in blocs to “investors” (rumored)?
3) If these mysterious “investors” don’t have to put much down on these houses, can they rent them out and still have positive cash flow?
4) There was a column by a guy in the Atlantic, I’m sorry I don’t remember his name and the date exactly, but I believe it was this March. He claimed that unemployment was highest in the areas where homeownership was highest, and so it would be better for peoples’ employment prospects and flexibility if they rented! (I wrote and pointed out to him that this is a dead-end street when you are retired on a fixed income and rent keeps going up.)
So is this some kind of tops-down plot to reduce Americans’ homeownership, turning us into a nation of renters who can be charged whatever the market will bear (and then some)?
OK, setting aside the tinfoil, I think another factor in the real estate market being “so hot” in some areas is simply that there is, indeed, loads of pent-up demand out there. Lots of people (like me) desperately want to have a place of their own, instead of renting. However, they can only go for the ones they can afford so the areas that dropped down into the realms of affordability are now hopping. That’s my take.
Or maybe the reason the banks are clinging to the NODs like grim death is simply that if they let them blow up, they blow big holes in the banks’ balance sheets. Depending on the (actual, not Turner-rumored) state of said balance sheets, the banks may not be able to afford much more damage like that.
If this latter theory is correct, then what if the government were to pass some legislation that somehow let the banks have a one-time writedown of these houses, allowing them to mark-to-market and sell them without having to take the losses? I predict two things would happen:
1) Market prices would drop off a cliff and
2) Oodles of houses would suddenly appear. It would be a helicopter-drop of houses (fine by me).ParticipantNo, socratt, I don’t think it’s just you. I feel like Alice a bit myself these days, wondering what’s real and what’s illusion.
There certainly appears to be some kind of “plot” going on, but I’m hazy as to what its ultimate goal is. One way of viewing it puts together a number of the factors (some rumored) which are in play:
1) Loads of houses being pried out of private, single-person hands via the foreclosure crisis.
2) Indeterminate, large numbers of these foreclosures are not coming onto the market. Is it because of the legislated delays last fall/winter? Or is it because the banks are selling them in blocs to “investors” (rumored)?
3) If these mysterious “investors” don’t have to put much down on these houses, can they rent them out and still have positive cash flow?
4) There was a column by a guy in the Atlantic, I’m sorry I don’t remember his name and the date exactly, but I believe it was this March. He claimed that unemployment was highest in the areas where homeownership was highest, and so it would be better for peoples’ employment prospects and flexibility if they rented! (I wrote and pointed out to him that this is a dead-end street when you are retired on a fixed income and rent keeps going up.)
So is this some kind of tops-down plot to reduce Americans’ homeownership, turning us into a nation of renters who can be charged whatever the market will bear (and then some)?
OK, setting aside the tinfoil, I think another factor in the real estate market being “so hot” in some areas is simply that there is, indeed, loads of pent-up demand out there. Lots of people (like me) desperately want to have a place of their own, instead of renting. However, they can only go for the ones they can afford so the areas that dropped down into the realms of affordability are now hopping. That’s my take.
Or maybe the reason the banks are clinging to the NODs like grim death is simply that if they let them blow up, they blow big holes in the banks’ balance sheets. Depending on the (actual, not Turner-rumored) state of said balance sheets, the banks may not be able to afford much more damage like that.
If this latter theory is correct, then what if the government were to pass some legislation that somehow let the banks have a one-time writedown of these houses, allowing them to mark-to-market and sell them without having to take the losses? I predict two things would happen:
1) Market prices would drop off a cliff and
2) Oodles of houses would suddenly appear. It would be a helicopter-drop of houses (fine by me).ParticipantNo, socratt, I don’t think it’s just you. I feel like Alice a bit myself these days, wondering what’s real and what’s illusion.
There certainly appears to be some kind of “plot” going on, but I’m hazy as to what its ultimate goal is. One way of viewing it puts together a number of the factors (some rumored) which are in play:
1) Loads of houses being pried out of private, single-person hands via the foreclosure crisis.
2) Indeterminate, large numbers of these foreclosures are not coming onto the market. Is it because of the legislated delays last fall/winter? Or is it because the banks are selling them in blocs to “investors” (rumored)?
3) If these mysterious “investors” don’t have to put much down on these houses, can they rent them out and still have positive cash flow?
4) There was a column by a guy in the Atlantic, I’m sorry I don’t remember his name and the date exactly, but I believe it was this March. He claimed that unemployment was highest in the areas where homeownership was highest, and so it would be better for peoples’ employment prospects and flexibility if they rented! (I wrote and pointed out to him that this is a dead-end street when you are retired on a fixed income and rent keeps going up.)
So is this some kind of tops-down plot to reduce Americans’ homeownership, turning us into a nation of renters who can be charged whatever the market will bear (and then some)?
OK, setting aside the tinfoil, I think another factor in the real estate market being “so hot” in some areas is simply that there is, indeed, loads of pent-up demand out there. Lots of people (like me) desperately want to have a place of their own, instead of renting. However, they can only go for the ones they can afford so the areas that dropped down into the realms of affordability are now hopping. That’s my take.
Or maybe the reason the banks are clinging to the NODs like grim death is simply that if they let them blow up, they blow big holes in the banks’ balance sheets. Depending on the (actual, not Turner-rumored) state of said balance sheets, the banks may not be able to afford much more damage like that.
If this latter theory is correct, then what if the government were to pass some legislation that somehow let the banks have a one-time writedown of these houses, allowing them to mark-to-market and sell them without having to take the losses? I predict two things would happen:
1) Market prices would drop off a cliff and
2) Oodles of houses would suddenly appear. It would be a helicopter-drop of houses (fine by me).ParticipantNo, socratt, I don’t think it’s just you. I feel like Alice a bit myself these days, wondering what’s real and what’s illusion.
There certainly appears to be some kind of “plot” going on, but I’m hazy as to what its ultimate goal is. One way of viewing it puts together a number of the factors (some rumored) which are in play:
1) Loads of houses being pried out of private, single-person hands via the foreclosure crisis.
2) Indeterminate, large numbers of these foreclosures are not coming onto the market. Is it because of the legislated delays last fall/winter? Or is it because the banks are selling them in blocs to “investors” (rumored)?
3) If these mysterious “investors” don’t have to put much down on these houses, can they rent them out and still have positive cash flow?
4) There was a column by a guy in the Atlantic, I’m sorry I don’t remember his name and the date exactly, but I believe it was this March. He claimed that unemployment was highest in the areas where homeownership was highest, and so it would be better for peoples’ employment prospects and flexibility if they rented! (I wrote and pointed out to him that this is a dead-end street when you are retired on a fixed income and rent keeps going up.)
So is this some kind of tops-down plot to reduce Americans’ homeownership, turning us into a nation of renters who can be charged whatever the market will bear (and then some)?
OK, setting aside the tinfoil, I think another factor in the real estate market being “so hot” in some areas is simply that there is, indeed, loads of pent-up demand out there. Lots of people (like me) desperately want to have a place of their own, instead of renting. However, they can only go for the ones they can afford so the areas that dropped down into the realms of affordability are now hopping. That’s my take.
Or maybe the reason the banks are clinging to the NODs like grim death is simply that if they let them blow up, they blow big holes in the banks’ balance sheets. Depending on the (actual, not Turner-rumored) state of said balance sheets, the banks may not be able to afford much more damage like that.
If this latter theory is correct, then what if the government were to pass some legislation that somehow let the banks have a one-time writedown of these houses, allowing them to mark-to-market and sell them without having to take the losses? I predict two things would happen:
1) Market prices would drop off a cliff and
2) Oodles of houses would suddenly appear. It would be a helicopter-drop of houses (fine by me).ParticipantNo, socratt, I don’t think it’s just you. I feel like Alice a bit myself these days, wondering what’s real and what’s illusion.
There certainly appears to be some kind of “plot” going on, but I’m hazy as to what its ultimate goal is. One way of viewing it puts together a number of the factors (some rumored) which are in play:
1) Loads of houses being pried out of private, single-person hands via the foreclosure crisis.
2) Indeterminate, large numbers of these foreclosures are not coming onto the market. Is it because of the legislated delays last fall/winter? Or is it because the banks are selling them in blocs to “investors” (rumored)?
3) If these mysterious “investors” don’t have to put much down on these houses, can they rent them out and still have positive cash flow?
4) There was a column by a guy in the Atlantic, I’m sorry I don’t remember his name and the date exactly, but I believe it was this March. He claimed that unemployment was highest in the areas where homeownership was highest, and so it would be better for peoples’ employment prospects and flexibility if they rented! (I wrote and pointed out to him that this is a dead-end street when you are retired on a fixed income and rent keeps going up.)
So is this some kind of tops-down plot to reduce Americans’ homeownership, turning us into a nation of renters who can be charged whatever the market will bear (and then some)?
OK, setting aside the tinfoil, I think another factor in the real estate market being “so hot” in some areas is simply that there is, indeed, loads of pent-up demand out there. Lots of people (like me) desperately want to have a place of their own, instead of renting. However, they can only go for the ones they can afford so the areas that dropped down into the realms of affordability are now hopping. That’s my take.
Or maybe the reason the banks are clinging to the NODs like grim death is simply that if they let them blow up, they blow big holes in the banks’ balance sheets. Depending on the (actual, not Turner-rumored) state of said balance sheets, the banks may not be able to afford much more damage like that.
If this latter theory is correct, then what if the government were to pass some legislation that somehow let the banks have a one-time writedown of these houses, allowing them to mark-to-market and sell them without having to take the losses? I predict two things would happen:
1) Market prices would drop off a cliff and
2) Oodles of houses would suddenly appear. It would be a helicopter-drop of houses (fine by me).April 13, 2009 at 1:00 PM in reply to: Off Topic Here is a test that tests your “political compass” #380077ParticipantMine:
Economic: -6.75
Social: -4.41Hanging out near Ghandi.
Re Obama’s score; they also did one for Howard Dean a while back, and I tried taking the test for HD and couldn’t for the life of me get mine to match theirs. Like BO, their scores for him were up into the upper-right quandrant, unlike mine/ours.
I wonder how they “take” the tests for these public figures and have them wind up so different from when we “take the tests for them”.
April 13, 2009 at 1:00 PM in reply to: Off Topic Here is a test that tests your “political compass” #380347ParticipantMine:
Economic: -6.75
Social: -4.41Hanging out near Ghandi.
Re Obama’s score; they also did one for Howard Dean a while back, and I tried taking the test for HD and couldn’t for the life of me get mine to match theirs. Like BO, their scores for him were up into the upper-right quandrant, unlike mine/ours.
I wonder how they “take” the tests for these public figures and have them wind up so different from when we “take the tests for them”.
April 13, 2009 at 1:00 PM in reply to: Off Topic Here is a test that tests your “political compass” #380535ParticipantMine:
Economic: -6.75
Social: -4.41Hanging out near Ghandi.
Re Obama’s score; they also did one for Howard Dean a while back, and I tried taking the test for HD and couldn’t for the life of me get mine to match theirs. Like BO, their scores for him were up into the upper-right quandrant, unlike mine/ours.
I wonder how they “take” the tests for these public figures and have them wind up so different from when we “take the tests for them”.
April 13, 2009 at 1:00 PM in reply to: Off Topic Here is a test that tests your “political compass” #380582ParticipantMine:
Economic: -6.75
Social: -4.41Hanging out near Ghandi.
Re Obama’s score; they also did one for Howard Dean a while back, and I tried taking the test for HD and couldn’t for the life of me get mine to match theirs. Like BO, their scores for him were up into the upper-right quandrant, unlike mine/ours.
I wonder how they “take” the tests for these public figures and have them wind up so different from when we “take the tests for them”.
April 13, 2009 at 1:00 PM in reply to: Off Topic Here is a test that tests your “political compass” #380711ParticipantMine:
Economic: -6.75
Social: -4.41Hanging out near Ghandi.
Re Obama’s score; they also did one for Howard Dean a while back, and I tried taking the test for HD and couldn’t for the life of me get mine to match theirs. Like BO, their scores for him were up into the upper-right quandrant, unlike mine/ours.
I wonder how they “take” the tests for these public figures and have them wind up so different from when we “take the tests for them”.
ParticipantThanks for this.
It was really, really enlightening.And I say this as a person who went to a mid-grade, Midwestern university.
Much at the top is explained.
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