[patientrenter]

I’ll piggyback on this thread to ask a question I’ve been mulling for a while:

You’ve all seen the Shiller charts that show this real estate bubble was the biggest in recorded human history. That’s right, what happened to real estate prices in just the last 10 years – in San Diego, in California, in the USA, in much of the rest of the world – was bigger than anything ever recorded.

Given that, do you think that the traditional measures of the bottom of the cycle – sales, price/income etc – will be average, or much different from the average bottom of the cycle? (As one reference point, the bottom of the last cycle in So Cal was 1996, not 2001….) If you think it’s going to be different, how different?

[patientrenter]

I’ll piggyback on this thread to ask a question I’ve been mulling for a while:

You’ve all seen the Shiller charts that show this real estate bubble was the biggest in recorded human history. That’s right, what happened to real estate prices in just the last 10 years – in San Diego, in California, in the USA, in much of the rest of the world – was bigger than anything ever recorded.

Given that, do you think that the traditional measures of the bottom of the cycle – sales, price/income etc – will be average, or much different from the average bottom of the cycle? (As one reference point, the bottom of the last cycle in So Cal was 1996, not 2001….) If you think it’s going to be different, how different?

[patientrenter]

I’ll piggyback on this thread to ask a question I’ve been mulling for a while:

You’ve all seen the Shiller charts that show this real estate bubble was the biggest in recorded human history. That’s right, what happened to real estate prices in just the last 10 years – in San Diego, in California, in the USA, in much of the rest of the world – was bigger than anything ever recorded.

Given that, do you think that the traditional measures of the bottom of the cycle – sales, price/income etc – will be average, or much different from the average bottom of the cycle? (As one reference point, the bottom of the last cycle in So Cal was 1996, not 2001….) If you think it’s going to be different, how different?

[patientrenter]

I’ll piggyback on this thread to ask a question I’ve been mulling for a while:

You’ve all seen the Shiller charts that show this real estate bubble was the biggest in recorded human history. That’s right, what happened to real estate prices in just the last 10 years – in San Diego, in California, in the USA, in much of the rest of the world – was bigger than anything ever recorded.

Given that, do you think that the traditional measures of the bottom of the cycle – sales, price/income etc – will be average, or much different from the average bottom of the cycle? (As one reference point, the bottom of the last cycle in So Cal was 1996, not 2001….) If you think it’s going to be different, how different?

[patientrenter]

I misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?

Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.

Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.

[patientrenter]

I misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?

Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.

Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.

[patientrenter]

I misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?

Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.

Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.

[patientrenter]

I misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?

Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.

Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.

[patientrenter]

I misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?

Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.

Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.

[patientrenter]

[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]

If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!

Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.

[patientrenter]

[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]

If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!

Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.

[patientrenter]

[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]

If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!

Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.

[patientrenter]

[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]

If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!

Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.

[patientrenter]

[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]

If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!

Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.

[patientrenter]

[quote=bsrsharma]… USA don’t just pay half….

I hope that was tongue in cheek! You realize US treasury is beyond bankrupt (-11T) to practice such generosity. Wait till treasury floats paper for 1.2T deficit this year and see what happens to $ and rates.[/quote]

Sorry, bsrsharma, but I actually did not have my tongue in my cheek. Europe should pay most or all of the tab, but the US has already spent trillions to limit Russian expansion, so why skimp on a few tens of billions that would keep Ukraine out of Putin’s clutches? It’s a lot cheaper than building military forces to intimidate Russia out of Ukraine after it takes hold.

[Author]

Posts