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rb_engineer
ParticipantI think the issue is economy. Its surprisingly resilient. Yes, people are losing jobs but unemployment is low. There are mortgage lenders going under everyday but then there are companies that are soaring (amylin, invitrogen, intuit?). I don’t know why but people are still buying homes. There are many examples of people losing their shirt on the houses but there are just as many who are selling at premiums even now (think north county coastal). I think if the general population think owning a house is too expensive, that’s not a bearish signal. When people are worrying more about their basic needs (food, rent, etc) that would signal a recession for me.
ParticipantThat’s a great price! No property taxes either! I’m sure some bears will find reasons NOT to buy this.
ParticipantThat’s a great price! No property taxes either! I’m sure some bears will find reasons NOT to buy this.
ParticipantThat’s a great price! No property taxes either! I’m sure some bears will find reasons NOT to buy this.
ParticipantI would say Hawaii is purely supply and demand. Personally, I don’t really subscribe to the “median income x == median price x”. Just like anything, price goes up if demand goes up. I would say for Alaska, its set high to attract people. Just a guess.
ParticipantI would say Hawaii is purely supply and demand. Personally, I don’t really subscribe to the “median income x == median price x”. Just like anything, price goes up if demand goes up. I would say for Alaska, its set high to attract people. Just a guess.
ParticipantActually, 417K limit has always been in place and jumbo loan is still available. It was that companies without any capital of their own was able to loan out money to non-qualified individuals. Past few months have shown that this is clear not a working business model and they are paying for it. However, I agree that this puts significant pressure on the demand side and combined with people’s psychology it can really lead us down. Time will tell…
ParticipantActually, 417K limit has always been in place and jumbo loan is still available. It was that companies without any capital of their own was able to loan out money to non-qualified individuals. Past few months have shown that this is clear not a working business model and they are paying for it. However, I agree that this puts significant pressure on the demand side and combined with people’s psychology it can really lead us down. Time will tell…
ParticipantWell. 7% is above my threshold of comfort. Yes, I’m spoiled…
Hawaii and Alaska’s conforming loan is 625K. I guess because houses are more expensive there.
ParticipantWell. 7% is above my threshold of comfort. Yes, I’m spoiled…
Hawaii and Alaska’s conforming loan is 625K. I guess because houses are more expensive there.
ParticipantLooking at the graph in the WSJ, this could be a worst case scenario: If you look at pg 28 of this link: http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf you’ll see that ARMs are about 25% of the entire US 1st mortgage debt. Looking at the WSJ graph, I can roughly say that the worstcase default rate (weighted average) can go to 10% for all ARMs put together. That’s 2.5% (slighly more if you count equity loans) of the whole pie, or ~$300bln. I think Enron was probably worth that much at the peak. The stock market lost this much in 1 day couple of days ago. On the national level, the recession or crash of housing will probably need to come from mass psychologcal effect. Although anything is possible locally.
ParticipantLooking at the graph in the WSJ, this could be a worst case scenario: If you look at pg 28 of this link: http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf you’ll see that ARMs are about 25% of the entire US 1st mortgage debt. Looking at the WSJ graph, I can roughly say that the worstcase default rate (weighted average) can go to 10% for all ARMs put together. That’s 2.5% (slighly more if you count equity loans) of the whole pie, or ~$300bln. I think Enron was probably worth that much at the peak. The stock market lost this much in 1 day couple of days ago. On the national level, the recession or crash of housing will probably need to come from mass psychologcal effect. Although anything is possible locally.
ParticipantProbably a typo. Wells Fargo website says 7%. None the less, its still very high.
ParticipantProbably a typo. Wells Fargo website says 7%. None the less, its still very high.
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