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ra633
ParticipantAgain, as I see it, there are Underwater Homeowners who CAN afford their homes, but now owe more than their homes are worth. Many UH’s should walk this year, and probably will.
This especially applies to UH’s that have non-conforming loans, UH’s in expensive downtown SD condos, etc.
The structured assets based on these loans will really suffer. Central banks will not be able to print enough money to ‘put a floor’ on housing prices.
And that’s how it should be. Especially in San Diego.
Maybe we’ll actually have affordable housing around here again!
ParticipantAgain, as I see it, there are Underwater Homeowners who CAN afford their homes, but now owe more than their homes are worth. Many UH’s should walk this year, and probably will.
This especially applies to UH’s that have non-conforming loans, UH’s in expensive downtown SD condos, etc.
The structured assets based on these loans will really suffer. Central banks will not be able to print enough money to ‘put a floor’ on housing prices.
And that’s how it should be. Especially in San Diego.
Maybe we’ll actually have affordable housing around here again!
ParticipantAgain, as I see it, there are Underwater Homeowners who CAN afford their homes, but now owe more than their homes are worth. Many UH’s should walk this year, and probably will.
This especially applies to UH’s that have non-conforming loans, UH’s in expensive downtown SD condos, etc.
The structured assets based on these loans will really suffer. Central banks will not be able to print enough money to ‘put a floor’ on housing prices.
And that’s how it should be. Especially in San Diego.
Maybe we’ll actually have affordable housing around here again!
ParticipantAgain, as I see it, there are Underwater Homeowners who CAN afford their homes, but now owe more than their homes are worth. Many UH’s should walk this year, and probably will.
This especially applies to UH’s that have non-conforming loans, UH’s in expensive downtown SD condos, etc.
The structured assets based on these loans will really suffer. Central banks will not be able to print enough money to ‘put a floor’ on housing prices.
And that’s how it should be. Especially in San Diego.
Maybe we’ll actually have affordable housing around here again!
ParticipantAs I stated in the OP, I think that Underwater Homeowners should go for it, ie. walk. This is one way to counter the ridiculous housing bailout plan that is out there.
The government should not be trying to set a floor for the housing market, Prices need to drop further, especially in places like downtown SD where I live.
Interest rates should not be so low either.
These moves are just prolonging this recession.
As I predicted on 2/13/2009, the Obama Administration did not figure out how to solve the housing crisis.
To the Underwater Homeowners out there that replied to the original post – sorry to not reply and support you, because I do. I was away from this board for a few days…
ParticipantAs I stated in the OP, I think that Underwater Homeowners should go for it, ie. walk. This is one way to counter the ridiculous housing bailout plan that is out there.
The government should not be trying to set a floor for the housing market, Prices need to drop further, especially in places like downtown SD where I live.
Interest rates should not be so low either.
These moves are just prolonging this recession.
As I predicted on 2/13/2009, the Obama Administration did not figure out how to solve the housing crisis.
To the Underwater Homeowners out there that replied to the original post – sorry to not reply and support you, because I do. I was away from this board for a few days…
ParticipantAs I stated in the OP, I think that Underwater Homeowners should go for it, ie. walk. This is one way to counter the ridiculous housing bailout plan that is out there.
The government should not be trying to set a floor for the housing market, Prices need to drop further, especially in places like downtown SD where I live.
Interest rates should not be so low either.
These moves are just prolonging this recession.
As I predicted on 2/13/2009, the Obama Administration did not figure out how to solve the housing crisis.
To the Underwater Homeowners out there that replied to the original post – sorry to not reply and support you, because I do. I was away from this board for a few days…
ParticipantAs I stated in the OP, I think that Underwater Homeowners should go for it, ie. walk. This is one way to counter the ridiculous housing bailout plan that is out there.
The government should not be trying to set a floor for the housing market, Prices need to drop further, especially in places like downtown SD where I live.
Interest rates should not be so low either.
These moves are just prolonging this recession.
As I predicted on 2/13/2009, the Obama Administration did not figure out how to solve the housing crisis.
To the Underwater Homeowners out there that replied to the original post – sorry to not reply and support you, because I do. I was away from this board for a few days…
ParticipantAs I stated in the OP, I think that Underwater Homeowners should go for it, ie. walk. This is one way to counter the ridiculous housing bailout plan that is out there.
The government should not be trying to set a floor for the housing market, Prices need to drop further, especially in places like downtown SD where I live.
Interest rates should not be so low either.
These moves are just prolonging this recession.
As I predicted on 2/13/2009, the Obama Administration did not figure out how to solve the housing crisis.
To the Underwater Homeowners out there that replied to the original post – sorry to not reply and support you, because I do. I was away from this board for a few days…
September 1, 2007 at 8:37 AM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #82927Participant1) 0% down, 6.75% rate on $380k will make the monthly payment after tax benefit the same as the $2200 rent we’re paying now.
ra633: are you overall buying a good loan product? – what is the index (LIBOR-6mo)? how many yrs fixed? prepay penalty? rate caps? % of loans assigned/transferred in secondary mkt? points up front? APR?
2) if more price reduction is coming, say 10%, we would lose $38K on paper instead of $75K if we bought at 4S.
ra633: price reduction could be over 25%, that plus selling costs should factor in. You should plan for realized losses of about $110 to $130K.
3) The problem is that we can afford 4S and wife wants to own now after long waiting. If we buy a condo now in RB now, wife pressure will be gone, and we can wait for the good time to buy at 4S or Del Sure at maybe $630K instead of $750K, maybe in a year or two years?
ra633: make sure you really can afford the place based on a worst case scenario, not wishful thinking. I don’t think your analysis is honestly considering worst case. This includes the condo not renting at 100%, the impact on your assets/liabilities and debt/income ratios in worst case, interest rates in the future, etc.
4) when we buy a new bigger house later at a cheaper price which means the condo’s value is also reduced, we can keep the condo and rent it out, no real loss, only paper money loss. If we ride it out, we’ll be doing fine with the condo in the long run in RB.
ra633: again, make sure you are really considering that the worst case could happen, and err toward that side instead of the wishful thinking side. Overall, lower debt and higher assets right now is the best position to be in – hopefully you can explain that to your wife. One option – give her the choice of renting now in the nicer neighborhood, versus owning in a lesser desirable neighborhood…has that been discussed, and what is her position on that?
ParticipantGetting back on topic…
In the original post, I stated that it will be interesting to see what the Piggington Renters’ influence on housing will be. The most helpful reply was that a PR will wait for GRM to go down to a much lower level before they buy.
From the responses so far, it appears that the Piggington Renters’ influence will be minimal, since they will not enter the market until a clear bottom is reached. That makes sense.
At 150 GRM, prices will need to decline to somewhere between 40 to 60 percent below peak levels in 2004 (downtown SD) and 2005 (other desirable SD areas).
For the record, I agree with the Piggington view. The objective of this post was to help me understand better how much more the current market will decline and how fast.
Although RE is different from equities in many respects, I still think there is at least one resistance level that needs to be broken before we see a large breakout to the downside. This resistance level is, in part, due to the ratio between interested buyers and distressed owners. Since Pigginton Renters are in neither group, their influence on the speed and extent of the decline in the near term will be minimal.
My guess changes continuously based on the good input on this and other forums (like Patrick.Net). Even childish replies like JWM’s are taken into account, if only for a laugh.
ParticipantGetting back on topic…
In the original post, I stated that it will be interesting to see what the Piggington Renters’ influence on housing will be. The most helpful reply was that a PR will wait for GRM to go down to a much lower level before they buy.
From the responses so far, it appears that the Piggington Renters’ influence will be minimal, since they will not enter the market until a clear bottom is reached. That makes sense.
At 150 GRM, prices will need to decline to somewhere between 40 to 60 percent below peak levels in 2004 (downtown SD) and 2005 (other desirable SD areas).
For the record, I agree with the Piggington view. The objective of this post was to help me understand better how much more the current market will decline and how fast.
Although RE is different from equities in many respects, I still think there is at least one resistance level that needs to be broken before we see a large breakout to the downside. This resistance level is, in part, due to the ratio between interested buyers and distressed owners. Since Pigginton Renters are in neither group, their influence on the speed and extent of the decline in the near term will be minimal.
My guess changes continuously based on the good input on this and other forums (like Patrick.Net). Even childish replies like JWM’s are taken into account, if only for a laugh.
ParticipantSD Transplant,
ty for the reply, good explanation. However, your case illustrates my point. You will stay a renter until the GPM deflates by at least 33%. As long as ALL PRs vow to hold out at least that long, the day may never come, or at least take several years…Something’s got to give.
If PRs don’t buy while the market is slowly going down, then it could take years to go down another 20%. In the meantime, what will happen to rents?
I suppose that part of the GPM calculation is based on rents, so if rents inflate a lot over the next few years, then your estimated purchase price will go up the same.
ra633
ParticipantSD Transplant,
ty for the reply, good explanation. However, your case illustrates my point. You will stay a renter until the GPM deflates by at least 33%. As long as ALL PRs vow to hold out at least that long, the day may never come, or at least take several years…Something’s got to give.
If PRs don’t buy while the market is slowly going down, then it could take years to go down another 20%. In the meantime, what will happen to rents?
I suppose that part of the GPM calculation is based on rents, so if rents inflate a lot over the next few years, then your estimated purchase price will go up the same.
ra633
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