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PerryChase
ParticipantVerano Price update:
1 bd = high 200s
2 bd = mid 300sParticipantLosses are mounting at the Venetian. I saw somewhere in the local news that one homeowner was defaulting on his property. He then advertised his condo for rent at a low price, took deposits from several would-be renters and disappeared with the money. The DA won’t do anything so the only recourse those tenants have is to sue to landlord for the money. Good luck to them.
ParticipantShe bought the plasma/LCD big screen on credit also. You know, it’s only $50/mo. And don’t forget the 1-year no payment, no interest (But if you pay only $50/month interest is retroactive at 30%).
ParticipantDowntown San Diego is a little like Disneyland. There’s a small Chinatown with a Chinese retirement home and a museum, but hardly any Chinese people. Little Italy has restaurants serving bad Italian food but no real Italians. Little Italy is just the name of a residential/commercial neighborhood rather than a real “Little Italy.”
ParticipantI’m a liberal (lower case l) and I’m opposed to such grants. the money won’t go to the poor but end up in the pockets of the lenders and REIC.
How does it help the poor if the government steps in and help the poor make the mortgage payments on a houses they can’t afford for an extra 6-months. It just wastes money and delays the inevitable.
Sometimes you need tough love. Now is that time for that. Better spend the money on educating the next generation of low-income buyers.
ParticipantI didn’t mean to criticize anyone for their personal decisions. Each family has a different situation.
If we had a “normal” market where housing appreciates at 2%-4% per year like it did since 1890, then we wouldn’t feel the need to get into heavy debt and rush out and buy. We would take our time to save and to decide what is best for our families.
If you look at housing in historical terms, housing as a proportion of purchasing power has generally remained the same. But for that same piece of the pie we have better houses. That’s how our generation can afford to live in larger better houses than our grandparents and that’s how we, as a society, increase our standards of living.
The new financial instruments (and govt intervention) caused such a boom in housing in the last 10 years, that housing took up an increasing share of income.
But that is not meant to last.
Think about it. If housing keep on consuming an increasing portion of our income pie, we’d have less to spend on everything else. That will eventually cause a decrease in standards of living because our kids would have to spend a larger percent of their income on housing.
I’m positive about our future, we will continue to improve our living standards. I believe that market forces will cause a realignment that’s beginning to take place right now.
I think it’s useful to think of our total income as 100% to be divided up into portions — 25% for housing 10% food, 10% education, 10% savings, etc…
Participant“This credit collapse is an unequivocally important event. Because, as I’ve been writing, the ability of anybody with a pulse to get a loan for any amount is what drove the real estate market, and the real estate market is what drove the economy. Sometime in the next three to six months, the real-estate market will basically just freeze up. Of course, inventories are going to explode and prices will eventually drop rather dramatically as a vicious cycle feeds on itself.”
ParticipantIn Josh’s defense, yes, meadandale, people like you are part of the problem — only a little bit. The real problem is the lenders and they do deserve to loose big time when housing crashes. If the lenders are willing to give out cheap money, you can’t blame the borrowers for taking it.
If it weren’t for the 100% financing and other exotics, there’s be less demand. Prices would be lower and the growth in housing would be more sustainable rather than the boom and burst we are seeing.
I think that the homeownership rate is now at 69% and the long term sustainable rate is 64%. If we go back to the long term sustainable rate, that means that 10% of the homeowners will revert back to being renters.
You bought in 2002. There’s a good chance that your house will depreciate to that level or below. In that case you won’t be too happy. Think of the opportunity cost of carrying that house for all those years when you could’ve been renting for less. The point is not whether you can make the payments. The point is what else you could’ve done with the money (invest it or enjoy spending it on yourself).
ParticipantI think that climate appropriate landscaping is beautiful. It takes more design to achieve an attractive look. I’ve been trying to convince my dad for years to do something more appropriate in his yard. But he likes the tropical plants.
ParticipantBut I guarantee I will never miss a payment.
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Never say never. I've seen corporate executives and business owners get into financial trouble.
The truth is that there's too much liquidity sloshing around and that liquidity is looking for a return — any return. Prosper.com is one such example.
The problem with 100% financing is that the borrower has nothing at stake but the upside. He gets to gamble with other people's money. The private equities are also gambling with other people's money. Hell, I'd do that same too. Most people won't fly first class with their private funds but they'd do so with the company's money.
I see an implosion in the mortgage business as losses mount. The private equities are next.
ParticipantThese are good calculators to play with.
http://www.mortgage-info.com/mortgage-calculators/blendedmortgageratecalculator.aspx
Participantpowayseller, best to luck to you. I check your site daily for interesting article. I’ve not subscribed yet, but may do so in the future.
I’d say that $25 per quarter is not too much to ask. Hell, PBS/NPR have several pledge drives per year. Think of what you pay for cable TV.
I’m sure powayseller is not making money (yet) on her website. She has to pay for web design, hosting, corp taxes, etc…
Professor Piggington used to charge for premium content but he discontinued it.
Powwayseller does excellent work. She’s on the pessimistic side. Reader should take her work in context and balance it with other articles from other authors.
The more “analysts” we have, the better informed we are.
ParticipantDon’t worry, 100% financing is here to stay. Based on your situation, you should be able to get a full-doc loan without much problem. Stated-income or liar loans are another story.
ParticipantSD Realtor, I didn’t mean to say that these particular sellers will run out of money.
One thing that I’ve noticed with high net-worth individuals, is that, more than any other group, they are very averse to taking losses. But they are realistic also. If the market turns south and stays that way for many years, then that becomes the new norm. At that point, even homeowners with lots of money may sell because of changing circumstances in their lives.
The well-to-do owners won’t sell at the beginning of the down cycle because they have staying power. It’s the marginal sellers (the neighbors) and new construction that cause the market downturn.
A prolonged downturn will cause even the most determined holders to eventually sell because of changes in their lifestyles. For example if they are forced to move to an assisted-living home because of illness, they may sell rather than take a $3000/mo loss by renting out the unit.
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I also recommend Calculated Risk.
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