[Sandi Egan]

As the prices come down, a larger percentage of the population can afford to satisfy their desire to buy.

Demand is desire times ability.
Once the streets are overflown with alt-A blood, the “desire” part is going to shrink. The common wisdom will change from “you can’t go wrong with RE” to the opposite. People will be able to afford a house they like, but won’t buy it.

[Sandi Egan]

As the prices come down, a larger percentage of the population can afford to satisfy their desire to buy.

Demand is desire times ability.
Once the streets are overflown with alt-A blood, the “desire” part is going to shrink. The common wisdom will change from “you can’t go wrong with RE” to the opposite. People will be able to afford a house they like, but won’t buy it.

[Sandi Egan]

six-month moratorium on foreclosures resulting from high-risk loans given to people with shaky credit, arguing that lenders should help borrowers refinance their mortgages or face lawsuits.

Well now. In this scenario, the banks and investors are going to take the hit. In most cases this will mean the banks have to absorb 6 extra month of no payments on defaulted mortgages and are not going to be happy about that. I bet their lobbyists will not allow this to happen.

For us, hoverer, either way will not make much difference. So homes hit the must-sell inventory in a year after the NOD, instead of in six month. So what?

What can affect us, is if the government tries to bail out the mortgages using tax money. Now that will both dampen the blow AND have us pay for it.

[Sandi Egan]

That said, the problem of course has no solution. It is not specific to the US or to the present day. There are always better places, and poor people always flock there. Always have been that way.
It does get harder with global economy and Internet age, when low-wage workers don’t even need to be physically present here to get the jobs. I guess we will just have to make our peace with that fact, and work harder to become better competitors in the global market.

[Sandi Egan]

I know it sounds horrible but no medical attention either. Nothing. If the risks are higher people will think twice about it.

Even if you start shooting illegal immigrants on the streets, there will be people, who would risk that.
Kewp is right, the solution is not to punish the immigrants, but to remove the incentive for them to come here. If they can’t find jobs here, why would they even bother? People who hire illegal immigrants are much easier target for law enforcement. I bet most people will avoid paying for illegal labor, if they knew they could actually go to jail for it.

[Sandi Egan]

Any bank (or any company, for that matter) would be happy to get your money. I am positive they would NEVER bug you with such stupid requests unless they absolutely have to. I agree with Diego that this must be some kind of regulation.

[Sandi Egan]

I hate the recent trend when they put walk-in closet PAST the master bathroom and don’t install a bathroom door. How stupid is that??

[Sandi Egan]

That’s just my opinion, formed by this blog.

[Sandi Egan]

To answer your question, the crash is not a single event. RE crash in San Diego is taking place already, and will continue for several years.

[Sandi Egan]

I believe if you buy now in 7 years you will be looking at a 6-digit loss.

[Sandi Egan]

Thanks again for helpful insight, SD Realtor.

I would recommend would be to try to contact the distressed seller right after the notice of default is issued and try to negotiate a deal directly with them.

Will the seller at that point have rights to negotiate? I guess, the lower limit of the price they would accept is the amount they owe (which must be a very high percentage), and even in that case the seller will not be motivated to sell for that much, since they will lose their entire downpayment. Right?

[Sandi Egan]

all the builders got together and decided that they would not drop prices again
Hm…Isn’t it illegal? I am not sure, but one would think that kind of agreement violates antitrust laws, doesn’t it?

[Sandi Egan]

SD Realtor,

Thank you very much for detailed answer. It is most helpful.

So the property goes through an auction BEFORE it becomes a REO? Does that mean that all listed REOs failed to sell on the auctions?
Is there a website that describes the rules of these auctions?

Thanks again.

[Sandi Egan]

Actually, it will be interesting to see the charts of 1980-2006 SD housing prices converted to gold and Euro.

[Sandi Egan]

We could have been having this conversation two years ago and we both would not have believed these homes would be selling for what they are today – and we both would have been wrong.

What makes you think that two years ago you’d be wrong? I was about to buy a home almost two years ago. I even paid the deposit. Thanks to Professor I made the smartest financial decision of my life – bailed out. If I didn’t, right now I’d be under water by more than 100 kilobucks.

5 years ago you could have bought a house and gained, yes. But only if you were smart enough to get rid of it at 2005-2006 peak.

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