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powayseller
ParticipantThanks for hs for recommending USAA to us. Does anyone have a bank rating for them? I wonder if we can ask the bank to give us the rating. If the bank is highly rated, wouldn’t they want to give us a free Weiss report to prove their solvency?
ParticipantI first heard about craigslist from my brother, about one year ago. Other than him and this site, I’ve not heard anybody else talk about it. It’s not so well known. When I checked rentals and cars to buy, I used the Union Tribune. I am not a craisglist user either.
ParticipantIf this condo sells at 20% off current prices, think how cheap it will be in 3 years at 20% of 2009 prices. Condos will be hit hardest, and condo conversions will be almost impossible to sell in 5 years. Why not rent, and buy a little house? Condos are not the best for kids -no yard, hauling a stroller and groceries up the stairs with a baby to carry – a real pain in the rear. The best situation with kids is a remote garage door opener, and you pull in and can unload everything conveniently. Believe me, I have 3 kids, I know how much carrying of stuff is involved.
What kind of job do you have now? Is it secure enough to handle the housing downturn?
If you can handle a further 20% – 30% equity drop, the financing on a fixed rate mortgage, and have job security, then jump in.
But be prepared that if you choose to sell whenever there is a glut of inventory, you also will be forced to sell at “20% off the price”, just like the seller today, because condo conversions carry a stigma of apartment grade construction for a condo price. Besides, there are thousands of them…
ParticipantThe American auto dealers are having high sales too, but due to heavy discounting. Winnebago’s quarterly revenue growth is -13%, and quarterly earnings growth is -25%. Their stock price will come down soon enough.
http://finance.yahoo.com/q/ks?s=WGOParticipantI don’t think Adam is obliged to discuss his personal situation with anonymous posters. He sold his house and is renting now. His rental properties, 1031 exchanges, and financial considerations are a private matter.
ParticipantThis WSJ inventory graph for several cities shows why Orange County still has pricing power: inventory is slightly under San Diego’s 10K level. Meanwhile, the highest inventory in the country is in Los Angeles, at 7x San Diego’s inventory. Chicago, Miami, and LA have the highest inventories at 50K – 70K. Unless their cities are 5 – 7 times bigger than San Diego, I see lower prices coming soon.
Participant4S is down? Tell that to the nice young man, educated, who answered my survey about housing prices this weekend. Last year, he bought a $900K house in 4S ranch with an I/O loan, and said it’s worth $960K now. I didn’t have the heart to tell him it’s worth probably $810K. I gave him this website; maybe he’s reading this right now. (If you are reading this, sell fast, before it goes down further or your loan resets, or just consider a short sale or walk away and return the keys to the stupid lender who handed you a loan you really couldn’t afford in an overvalued housing market. See attorney for advice)
August 16, 2006 at 9:18 PM in reply to: The Real Story Behind the Los Angeles County 6.6% Median Price Increase #32101ParticipantDidn’t this happen in SD too? The lower priced areas saw higher rates of appreciation than the more expensive areas. I thought this happened everywhere.
This example shows why the median is misleading; in that case, some zip codes were appreciating, while others fell.
ParticipantDon’t retirees move in with their children, or to retirement communities, i.e. into one of those vacant condos or retirement homes? Maybe the AARP has some surveys on this. The poor ones get a trailer and rent a trailer park space. You might be on to something, but I would research it a little further. AARP or other demographic studies, or talking with the elderly.
ParticipantSo those two counties have higher paying jobs? Each County has a median price of 10x median family income then?
What kinds of jobs exist in those counties to account for the higher pay? And why was the other poster offered a higher salary to live in OC? Different job, same job?
When my in-laws moved here in 1999, they were told that housing is cheaper south of I-8. North County housing costs more. That is what they found, and they moved to Chula Vista. There are some very nice and expensive new areas down there.
Poway is 1/4 low income. Most of Rancho Penasquitos looks like a decades-long rental neighborhood. Poverty is everywhere. We have several trailer parks in Poway. The low income areas are where I see 95% of the NODs.
ParticipantHas anyone checked out the Weiss ratings on these banks? Or are we trusting FDIC? I always worry about banks which hold a lot of residential loans. Do these banks hold a variety of loans, so no residential concentration?
ParticipantI think we’ll see lawsuits against builders, NAR, CAR, and realty companies for exaggerating the profits to be made (“real estate can’t go down”), title and escrow companies, builders for shoddy construction. Buyers who were fooled by builder salespeople who hid the available lots on a separate sales sheet, broken promises of schools/shops downtown,…
The largest lawsuits will be against lenders for not properly disclosing the loan terms.
Then there will be lots of surprises. Who would have guessed Enron and MCI would ever be in the hot seat? How many homebuilders violated SEC or options rules, despite just building cheaply and exaggerating/hiding their losses? It will take several years to hear the biggest cases.
ParticipantRead housingbubblecasualty.com; 50 year mortgages are not much lower than the other products.
Even if the Fed lowers rates by 1%, how can it help housing? The Fed knows that it must make debt available to make up for the loss in purchasing power. Real wages are flat or falling, so they have to make cheap debt. The economy is dependent on people willing and able to take on more debt. From the data I see, the American public has taken on about as much debt as they can handle.
Even a 100 year mortgage doesn’t help much. I’ll tell you why: extending the mortgage terms only reduces the principal. You still have to pay the interest, which is the biggest portion!
An I/O loan is cheaper than a 50-year or 100-year or 1000-year mortgage, because you are paying interest only. Even with that loan, people are tapped out!
The only way to make it cheaper is to offer option I/O loans: you pay only part of the principal. We already have that I think. But investors expect to be paid, so these loans come with large prepayment penalties, and they attract subprime borrowers.
Just wait another year. The high foreclosures will bring an end to investors wanting to touch these exotic loans with a 10′ pole.
Another interesting tidbit: the rate of first-time missed payments is up. This means the first mortgage payment was never made.
Keep in mind that historically, the homeownership rate was 65%, for many decades. Now it is 69%. That extra 4 point increase brought in people who are NOT qualified for a mortgage, who needed subprime and liar’s loans to qualify. That is a huge problem for the lenders. It also shows that we are maxed out on the number of eligible borrowers. To bring it to 72%, you would need to give loans to the mentally ill and other extreme groups.
No, the 50 year won’t save housing. The only remedy for housing is the ability AND willingess of CURRENT homeowners to take on more debt, to trade up. But even then, you still have the problem of overbuilding.
There was a KETV.com video (Omaha, NE) yesterday, profiling how long it is to sell homes. Overbuilding, and the highest inventory that a realtor with 26 years in the biz, could ever remember.
ParticipantChris, the cycles you describe are very interesting, and something I had not considered before. Do you have any links so I can read more about it? It just goes to show there is order in the universe, and like a pendulum, behavior and markets slowly swing from one end to the next, back and forth, back and forth. I didn’t realize there was any order in the markets (hahaha); it seemed chaotic to me. What a comforting thought – to have cycles in the markets, as in nature. I want more info on this, for sure.
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