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temeculaguy
ParticipantHere we go again, “MOM, HE’S TOUCHING ME”
cash, when you wan’t to show empathy to someone, tell an ambiguous story and don’t name names, otherwise it is actually just another way to pick a fight. JWM can be a bully but you just baited him, you called him out in front of his peeps so you can’t complain if you get a black eye.
No nominations, no caps, everyone back to ther corners.
Participantbeachlover, don’t fret I won’t bash you because you and many other readers fear entering the ring and because you didn’t ask some question that could be answered in the primer I will extend some courtesy.
About once a month we have someone come in and express their disdain for our callous reaction to the financial ruin of others. I think you will find the majority of the regulars are charitible individuals who also care about their fellow man. That said, you cannot possibly take the side of the overextended buyers. For every uneducated, unsophisticated buyer that had no idea what they were doing I will find you twenty that were greedy, lived beyond their means and even told others to do the same. You didn’t and now you need to sell your house and buy a larger one. It doesn’t matter if you get less for your home, you will pay less for the next one, therefore you are immune to the market moves. Even better, you will have a lower tax basis on the new one so you actually win. Your desire to have pity on people who are being foreclosed on is flawed and biased, you benefitted from the greed of others, raising your value, even at today’s prices if you sell you are ripping off some victim who buys from you, they should pay half what you think your house is worth. You are stealing their kids college money. This isn’t an attack on you, you didn’t plan it and it’s not your fault, but you are doing it. From your perspective you can find victims but there are many more victims that aren’t getting any media attention or sympathy from you. Those young families or college graduate couples who see that they will never be able to afford their own home, who weeps for them. Well, I do. I supervise many of them, who went to school, played by the rules and work very hard. At every point in history someone in their situation and point in their career could afford a home and even raise a family on their income, except for now. I root for them, they aren’t greedy and most of them refused to forgo food in order to own a home. Some have postponed having children while others give up some things we might consider neccesities in order to save for a home, only to see prices rise exponentially faster than their savings.
Over the last five years, carelessness has been rewarded, while prudence was punished. The table has turned and I am supposed to feel sorry for the victims, sorry, can’t do it. The only reason to take an interest only loan is if you are betting on appreciation. Bets don’t always pay off, if you can’t afford to lose, don’t play and for god sake don’t ask for my pity if you lose. Don’t ask me not to say I told so, because I did and now I will.
I also don’t hang out in casino parking lots and feel bad for people who lost money even thought they thought they would win. I should, at least those people don’t drive up the cost of living for young families.
I am off the soapbox now, welcome aboard, glad to have a new face around here and do not buy that new house until yours is sold and the loan is funded, live in a hotel or your car if you have to.
Participantbeachlover, don’t fret I won’t bash you because you and many other readers fear entering the ring and because you didn’t ask some question that could be answered in the primer I will extend some courtesy.
About once a month we have someone come in and express their disdain for our callous reaction to the financial ruin of others. I think you will find the majority of the regulars are charitible individuals who also care about their fellow man. That said, you cannot possibly take the side of the overextended buyers. For every uneducated, unsophisticated buyer that had no idea what they were doing I will find you twenty that were greedy, lived beyond their means and even told others to do the same. You didn’t and now you need to sell your house and buy a larger one. It doesn’t matter if you get less for your home, you will pay less for the next one, therefore you are immune to the market moves. Even better, you will have a lower tax basis on the new one so you actually win. Your desire to have pity on people who are being foreclosed on is flawed and biased, you benefitted from the greed of others, raising your value, even at today’s prices if you sell you are ripping off some victim who buys from you, they should pay half what you think your house is worth. You are stealing their kids college money. This isn’t an attack on you, you didn’t plan it and it’s not your fault, but you are doing it. From your perspective you can find victims but there are many more victims that aren’t getting any media attention or sympathy from you. Those young families or college graduate couples who see that they will never be able to afford their own home, who weeps for them. Well, I do. I supervise many of them, who went to school, played by the rules and work very hard. At every point in history someone in their situation and point in their career could afford a home and even raise a family on their income, except for now. I root for them, they aren’t greedy and most of them refused to forgo food in order to own a home. Some have postponed having children while others give up some things we might consider neccesities in order to save for a home, only to see prices rise exponentially faster than their savings.
Over the last five years, carelessness has been rewarded, while prudence was punished. The table has turned and I am supposed to feel sorry for the victims, sorry, can’t do it. The only reason to take an interest only loan is if you are betting on appreciation. Bets don’t always pay off, if you can’t afford to lose, don’t play and for god sake don’t ask for my pity if you lose. Don’t ask me not to say I told so, because I did and now I will.
I also don’t hang out in casino parking lots and feel bad for people who lost money even thought they thought they would win. I should, at least those people don’t drive up the cost of living for young families.
I am off the soapbox now, welcome aboard, glad to have a new face around here and do not buy that new house until yours is sold and the loan is funded, live in a hotel or your car if you have to.
ParticipantI think Stan is right but there is a possibility the pace will increase. HLS, I’ve read your stuff for a while and there is an unusual air of desperation in your words in this thread, are you feeling the crash is emminant. I know the traditional school of thought is a slow and measured decline but interpreting from industry insiders, yourself included, I feel we are at the abyss and I’m without fear. The local market made extraordinary gains during the up cycle, there is a fair chance there will be equally earth shattering declines, it broke rules on the way up so it should break some on the way down. I don’t have a bad feeling, the world won’t end, but I also feel this will not be a measured decline. I know you are looking at this from a humanistic perspective because you talk to many of the affected people every day and you have come to a “stop the insanity” realization. These people will survive with all of their limbs intact and it will be a while before they are ready to dive into the game again. The goal here is to capatalize on the trend, soon R/E will be completely out of fashion if it isn’t already and the opposite of catastrophe will have occurred, then and only then (when a teacher can afford a house) will all be right with the world again. Don’t fear it, embrace it, it isn’t just a good thing for reverse flippers, it’s good for society.
ParticipantI think Stan is right but there is a possibility the pace will increase. HLS, I’ve read your stuff for a while and there is an unusual air of desperation in your words in this thread, are you feeling the crash is emminant. I know the traditional school of thought is a slow and measured decline but interpreting from industry insiders, yourself included, I feel we are at the abyss and I’m without fear. The local market made extraordinary gains during the up cycle, there is a fair chance there will be equally earth shattering declines, it broke rules on the way up so it should break some on the way down. I don’t have a bad feeling, the world won’t end, but I also feel this will not be a measured decline. I know you are looking at this from a humanistic perspective because you talk to many of the affected people every day and you have come to a “stop the insanity” realization. These people will survive with all of their limbs intact and it will be a while before they are ready to dive into the game again. The goal here is to capatalize on the trend, soon R/E will be completely out of fashion if it isn’t already and the opposite of catastrophe will have occurred, then and only then (when a teacher can afford a house) will all be right with the world again. Don’t fear it, embrace it, it isn’t just a good thing for reverse flippers, it’s good for society.
ParticipantI am not an expert nor did I even click on the link and I know the answer (I’ll bet you do too), it’s the beginning of end. I don’t know if I like the word “end,” houses won’t be free, it’s just a cycle, wasn’t the first, won’t be the last. It did some crazy things on the way up during this cycle, unknown but better than a 50% chance to do some crazy things on the way down as well. Had it been a “normal” up cycle, this would be a decent price, but it didn’t so this isn’t. Popcorn theory in full effect, just the first kernal, listen closely and you will hear more.
ParticipantI am not an expert nor did I even click on the link and I know the answer (I’ll bet you do too), it’s the beginning of end. I don’t know if I like the word “end,” houses won’t be free, it’s just a cycle, wasn’t the first, won’t be the last. It did some crazy things on the way up during this cycle, unknown but better than a 50% chance to do some crazy things on the way down as well. Had it been a “normal” up cycle, this would be a decent price, but it didn’t so this isn’t. Popcorn theory in full effect, just the first kernal, listen closely and you will hear more.
ParticipantYes it is (suicide that is). Undercutting 2005 by a little bit is no great shakes and hardly enough protection. Undercutting 2003 is a safer play. When is the million dollar question. Let me ask you this, when do you think it is going to go up? 6 months, NO! 2-3 years, probably NO! As soon as inventories fall for a few months in a row (seasoally adjusted), then you will know, use the force Luke, trust your instincts.
ParticipantYes it is (suicide that is). Undercutting 2005 by a little bit is no great shakes and hardly enough protection. Undercutting 2003 is a safer play. When is the million dollar question. Let me ask you this, when do you think it is going to go up? 6 months, NO! 2-3 years, probably NO! As soon as inventories fall for a few months in a row (seasoally adjusted), then you will know, use the force Luke, trust your instincts.
ParticipantThere are about five questions here, as the duly elected representative of the intelligent people I’ll answer with a broad brush. Depending on the lender and the loan, the amount the bank loses in a forclosure can result in a judgement that will haunt the borrower but that is not usually the case and usually the bank eats it and it wrecks the borrowers credit for years. In a short, you negotiate with the bank to sell for less than what you owe and the bank forgives the loss, your credit takes a smaller hit but right now you pay income tax on the amount of the forgiveness (this tax may change with legislation now in the works). Think of it in terms of a divorce, in a forclosure she comes home and finds you with the maid in bed, throws your clothes out the window and never talks to you again. In a short, you sit at the table and divide up your stuff, she doesn’t like you all that much but tolerates you and doesn’t say too many bad things about you to friends and neighbors.
For the most part in either a foreclosure or a short sale, you don’t owe the bank, hence it’s popularity. When the tax rule changes, the short sale will gain popularity over forclosure. Will it hurt the economy, a little, but what you have to look at is most of the country isn’t in a bubble market, just a handful of states, the impact will not be felt equally all over the nation. Did hurricane Katrina hurt the economy? A little, but it probably didn’t hurt you too much. Does Iraq hurt the economy? A little, but it probably didn’t hurt you too much. Will the bursting R/E bubble hurt some guy in Montana or Texas? A little, but it’s gonna hurt like hell in Southern California, this is our hurricane, except mother nature didn’t deal us a bad car, greed brought it on so don’t expect any benefit concert or 5th graders having a bake sale.
ParticipantThere are about five questions here, as the duly elected representative of the intelligent people I’ll answer with a broad brush. Depending on the lender and the loan, the amount the bank loses in a forclosure can result in a judgement that will haunt the borrower but that is not usually the case and usually the bank eats it and it wrecks the borrowers credit for years. In a short, you negotiate with the bank to sell for less than what you owe and the bank forgives the loss, your credit takes a smaller hit but right now you pay income tax on the amount of the forgiveness (this tax may change with legislation now in the works). Think of it in terms of a divorce, in a forclosure she comes home and finds you with the maid in bed, throws your clothes out the window and never talks to you again. In a short, you sit at the table and divide up your stuff, she doesn’t like you all that much but tolerates you and doesn’t say too many bad things about you to friends and neighbors.
For the most part in either a foreclosure or a short sale, you don’t owe the bank, hence it’s popularity. When the tax rule changes, the short sale will gain popularity over forclosure. Will it hurt the economy, a little, but what you have to look at is most of the country isn’t in a bubble market, just a handful of states, the impact will not be felt equally all over the nation. Did hurricane Katrina hurt the economy? A little, but it probably didn’t hurt you too much. Does Iraq hurt the economy? A little, but it probably didn’t hurt you too much. Will the bursting R/E bubble hurt some guy in Montana or Texas? A little, but it’s gonna hurt like hell in Southern California, this is our hurricane, except mother nature didn’t deal us a bad car, greed brought it on so don’t expect any benefit concert or 5th graders having a bake sale.
ParticipantOkay I’ll play along, if nobody lowers their prices where are the qualified buyers with down payments going to come from? My answer, Nowhere! They exist, I am one of them along with dozens of us piggies, but we are not only a minority, we have taken our marbles home and we’re not playing.
The elimination of subprime zero down toxic mortgages is bringing down the house of cards. They are not buying the entry level homes they cannot afford and nobody is loaning them money. This is eliminating the move up and we are starting to see it in the mid range now. Ulitmately it freezes the market. One of two things has to happen to start up the motor again. Money has to flow freely (this one won’t happen for years until selective amnesia sets in) or the prices have to come down to where people qualify again and their 5% in the bank becomes 10% because the price is halved.
So to answer your question, if prices remain the same, the market seizes. However this motor won’t seize, the builders and the repos “have to sell” so it will grind without any motor oil, there will be smoke, smell, noise and damage, IMHO.
ParticipantOkay I’ll play along, if nobody lowers their prices where are the qualified buyers with down payments going to come from? My answer, Nowhere! They exist, I am one of them along with dozens of us piggies, but we are not only a minority, we have taken our marbles home and we’re not playing.
The elimination of subprime zero down toxic mortgages is bringing down the house of cards. They are not buying the entry level homes they cannot afford and nobody is loaning them money. This is eliminating the move up and we are starting to see it in the mid range now. Ulitmately it freezes the market. One of two things has to happen to start up the motor again. Money has to flow freely (this one won’t happen for years until selective amnesia sets in) or the prices have to come down to where people qualify again and their 5% in the bank becomes 10% because the price is halved.
So to answer your question, if prices remain the same, the market seizes. However this motor won’t seize, the builders and the repos “have to sell” so it will grind without any motor oil, there will be smoke, smell, noise and damage, IMHO.
ParticipantI’m with you on the fact that the memo about prices falling didn’t seem to get to everyone but these two examples have some explanation. The small one is approaching the magical 300k for an sfr barrier and would rent for about 1500, so it will find pricing support at some point and it is affordable to many people so the bottom of the market has been slower to drop. The second example is a little different too because it’s on more than a 1/4 of an acre and Morgan Valley has huge lots and a great location, kinda a hybrid tract but 900k is silly, it was probably 700ish at peak and that one doesn’t have the drive though garage that some models had (a four car garage that opened at both ends so you could drive into the backyard, I don’t want that but thought it was cool).
Here’s a better example of a a delusional seller. Two houses, same street, both on golf course, a 3500 sq ft repo for 425k and a 3000 sq ft non repo for 660k.
http://www.redfin.com/stingray/do/printable-listing?listing-id=1210765
http://www.redfin.com/stingray/do/printable-listing?listing-id=1164480
The repo represents a 175k loss from peak and a 40k loss from 2003.
The non repo represents a 250k profit from 2003, they were built at the same time and the repo was 50k higher when they were both new because it is bigger, this shows a 300k pricing disparity, approaching the cost of the home, someone is taking crazy pills.
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