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View Full Version : So what is everyone's current take on the housing market & lending?



totenhosen
07-24-2007, 07:05 PM
Quite a few lenders have pulled the plug on stated income/stated asset loans, ARM's and 100% financing. W/o getting into a pissing match what do you guys think we are heading to and what have you seen?

Daytona100
07-24-2007, 07:11 PM
Just the obvious. Lots of foreclosures. Values still seem to be holding maybe 20% off. I think its going to recover allot faster than first predicted.:D

USCFAN
07-24-2007, 07:43 PM
I have a few friends in the loan business, and they say it has been very, very slow.

YeLLowBoaT
07-24-2007, 07:50 PM
As soon as every one that should not have been able to buy a home ( atleast at the asking prices) is out( 2-3 more years of slowly falling prices) the market will go back to is norm of 1-3% increasing every year.
BTW Comm'l there are deals to be found, Give multi familys( and apartments) about 6 months and it will be the same. Lots of people are still way over extended on them and rents are staying static.

talkinghead
07-24-2007, 08:20 PM
My Prediction: We all know by now that 2004 and 2005 (housing boom) were not sustainable. It was a mania IMO - not unlike the tech stock boom.
I basically agree with yellowboat overall -
1. Housing prices continue to fall (overall) for the foreseeable future, the lending issue will continue to cause ripples in the market and economy.
2. After all of that settles out, we will return to the standard appreciation rate of homes for a while - say 1-6%.
3. The 2004/2005 boom will be a distant memory by 2009/2010, and it will all probably start over again (housing mania - partially due to consumerism). Lending standards will loosen up again - you may see 50 year (and more) mortgage loans like in Japan as the norm.
4. The next boom will be driven in part by the population EXPLOSION of immigrants. Both from ones that are here and that are on the way. This will take place primarily in the American Southwest - the trigger will be some sort of amnesty.

westair
07-24-2007, 08:42 PM
It may be slow now but with the predicted 20% population increase by 2015
in Ca there is only one way these prices are going.

riverracerx
07-24-2007, 09:09 PM
Long Beach Mortgage : 16 reps let go, 4 kept. All stated product gone. No more 3 year ARMs. Conditions for loans approvals have made getting deals through the system lengthy and cumbersome.
If you have a adjustable loan that is due up in the next 12 months and you don't have over a 700 fico you could be SOL.

socalmoney
07-24-2007, 09:12 PM
Now is the time to start hording cash so you can take advantage of the fallout in the next few years. There will be some great deals coming up. You just need to hold on. Some say the market will decline 35%-40%. I wouldn't recommend you buy anything for a while. Watch the indicators, don't trust the media, they don't know shit.
Take a look at this page. It will show you house values in the various parts of the US. You can see how much the market needs to correct in bubble states.
http://www.nationalcity.com/corporate/EconomicInsight/HousingValuation/default.asp?WT.mc_id=100206

socalmoney
07-24-2007, 09:17 PM
It may be slow now but with the predicted 20% population increase by 2015
in Ca there is only one way these prices are going.
There is no value in houses like this.
http://www.cnn.com/US/9604/13/mexican.border/poverty.lrg.jpg

The Doctor
07-24-2007, 09:17 PM
Here's my take from the point of view of an Arizona Land Broker. I don't sell homes but the housing market effects mine in a number of ways. I can say there are way too many factors to just say it's bad, good or going to get better in so many words so I'll throw out a couple factors I have to face every day.
*2004-2006 was a boom that ended in a feeding frenzy crashing hard. There MUST be correction in the markets where that was happening. That's going on now.
*Foreclosures are at an all-time high today. This is as a result of lender flexibility folks like ShockwaveBob's friends are everywhere. There were 125% loans available and the unwise traded their equity for shiny things. (maybe I should shut up now that I'm on a boat site but since we have five boats, I'll put myself in the pot) These shiny things depreciate at an exponential pace and the mortgage holder now must refinance but his value has dropped enough to disqualify him from such.
*The media has been very helpful in insuring the "Crash." They refuse to report good news since it won't sell and as a result consumer confidence in the Real Estate market is way down.
now for the good news
*Our last MAJOR market correction was in the 80s. It took the Savings and Loans institutions with it creating the Fed's genius RTC. This organization "fire-sold" assets at unreal prices causing the crash to also burn. It took years for them to liquidate all these assets and in turn took our market out for years.
*Last time interest rates skyrocketed. They are still quite stable as of today and our institutions stand ready, willing and able to lend-but under more responsible terms.
. . . now the best news for us in the SW
*Migration to the Sun Belt has never been better. With organized labor driving labor costs out of reach, many business owners are migrating to the right-to-work Sun Belt. Many employees have been laid off in the previously dominant manufacturing areas and seek employment where it's plentiful. Year after year bad weather in the NW, Midwest and NE USA coupled with heating oil & other crude related consumables skyrocketing out of reach for many have the discussions over the dinner table promising each other that this is their last winter here and the migration is boosted again.
*Migration to the Sun Belt used to include Florida, the Gulf Coast and Texas as prime targets. With record numbers of hurricanes and other weather-related issues, this has shifted the acceptable relocation zones primarily to AZ and CA. My county, Maricopa, will have no less than 12% each year for the next decade. That puts our regions in somewhat of an economic bubble protecting us from the full brunt of the Crash the media wants to tout.
All in all, it will take a while for the rebound but when it comes back it will be much more cautious and sensible than our 2004-2006 era took on.
I say our markets will be back in full swing by Summer of 2008.

C-2
07-24-2007, 09:19 PM
Countrywide down 33%, Mozzillo saying no recovery until 09' (good thing he dumped all his stock a few months back); IndyMac nixed 400 peeps the other day; Cali defaults hit a ten year high (duh)...why you wanna ask such a silly question?
On a sad note, it hit home for some friends of ours. Two years ago they were living the American dream - he was selling houses, she was an escrow officer. Now it's no houses sold or in escrow, and today she was laid off. Hard times ahead for sure.
I almost feel bad for asking - but where are all the mortgage cheerleaders at?

socalmoney
07-24-2007, 09:25 PM
Housing prices are only one piece of the pie. Wait till consumer spending stops because everyone is cash poor and nobody has anything left on their HELOC. Half of my friends are out of work because they made their money on the housing/real estate/ mortgage industry. When you look at how many people are in that boat and are forced to go to one income, it will be hard on the economy. Xmas will be slim this year.

westair
07-24-2007, 09:36 PM
There is no value in houses like this.
http://www.cnn.com/US/9604/13/mexican.border/poverty.lrg.jpg
LOL:D

cdog
07-24-2007, 09:49 PM
I saw the 5 news tonight. Hal reported that socal foreclosure’s are up 799% over last year. It's not looking good.:eek:

bigq
07-24-2007, 09:58 PM
It may be slow now but with the predicted 20% population increase by 2015
in Ca there is only one way these prices are going.
Gee I wonder where they are going to come from:rolleyes:

bigq
07-24-2007, 10:05 PM
-Bad loans will clear start to end the end of 2008.
-California value will collapse 40% (can't get a pie in the sky loan, can't afford the average house)
- Investors that can hang on will rent and flood the rental market driving down rent.
- Things will even out around end of 2009 or start of 2010 and by 2012 or so prices will start to appreciate again slowly.
Closer to home in San Bernardino and Riverside it will be one of the worse areas for foreclosures and loss of equity.

socalmoney
07-25-2007, 06:02 AM
Closer to home in San Bernardino and Riverside it will be one of the worse areas for foreclosures and loss of equity.
http://www.***boat.com/image_center/data/506/rivsanval.jpg

Tequila-John
07-25-2007, 06:07 AM
Countrywide down 33%, Mozzillo saying no recovery until 09' (good thing he dumped all his stock a few months back); IndyMac nixed 400 peeps the other day; Cali defaults hit a ten year high (duh)...why you wanna ask such a silly question?
On a sad note, it hit home for some friends of ours. Two years ago they were living the American dream - he was selling houses, she was an escrow officer. Now it's no houses sold or in escrow, and today she was laid off. Hard times ahead for sure.
I almost feel bad for asking - but where are all the mortgage cheerleaders at?
My broker co is busy. But its just me :)

socalmoney
07-25-2007, 06:11 AM
My broker co is busy. But its just me :)
In the beginning of this year, there was a lending company on the second floor of our building. 50k sq-ft of cubes had to be close to 250 people. They were all let go one day. Poof they were gone and we had a lot more parking spaces in the garage.

westair
07-25-2007, 06:17 AM
[QUOTE=bigq;2691093]-Bad loans will clear start to end the end of 2008.
-California value will collapse 40% (can't get a pie in the sky loan, can't afford the average house)
You can't be serious ..... 40%!! Not even close in San Diego Co is this your
prediction?
When this going to happen so I can buy that beach front house I could never afford.:D

bigq
07-25-2007, 06:47 AM
[QUOTE=bigq;2691093]-Bad loans will clear start to end the end of 2008.
-California value will collapse 40% (can't get a pie in the sky loan, can't afford the average house)
You can't be serious ..... 40%!! Not even close in San Diego Co is this your
prediction?
When this going to happen so I can buy that beach front house I could never afford.:D
from the high point yes. Homes that were 200k in 2001 reached prices of 440k in 2006 with incomes being pretty flat and you see no problem there:rolleyes: Maybe this will help. Also take a look at the inventory for San Bernardino and Riverside. Florida has the same problem and they are crashing big time.
Just an observation I am not in the industry.
http://www.financialsense.com/editorials/bronson/2006/images/0907/chart10_lg.gif

KREGER
07-25-2007, 06:57 AM
Good and Bad. It depends on your situation. It is bad if you HAVE to sell. It is good if you want to buy. Rates are still low for a 10 year average, and if you are buying with the intent to never sell. This makes the value fluctuation a non issue. It is time to buy and take advantage of all the advantages the "buyers market" has to offer. I do lending for several Builders in So Cal. One of the deals I did in June had $50K in incentives to the buyer. He used $21 K in closing cost (Huge Rate buy-down) and $30K in upgrades. The way to go in Realestate is to never sell unless you are reinvesting in more realestate to increase your leverage on your equity. There are so many tax advantages to owning a home or rental property. The stream of revenue in Real Estate is in new home sales.
My $0.02

MissB
07-25-2007, 06:58 AM
I too have been laid off as a rresult of the slowing mortgage market overall. But everything is cyclical, and as some of you posted, things will return to the norm in a few years. Hold tight, it may be a tough ride.....:)

bigq
07-25-2007, 07:01 AM
Here is another picture of the situation for us dumbed down people.
http://images.businessweek.com/gen/map_of_misery.jpg

fatboy95
07-25-2007, 07:08 AM
There is no value in houses like this.
http://www.cnn.com/US/9604/13/mexican.border/poverty.lrg.jpg
There maybe soon. I hear the first wave of Iraqi refugees are coming to Michigan. Maybe around 7,000. They will need housing and the rumor is they maybe starting business's. Our government is considering a $50,000 startup grant for most that want to open a business. Curious to see how many of these folks our government will bring in. Could be several hundred thousand.:jawdrop:

Freak
07-25-2007, 07:10 AM
LOOK at that chart....If that does not tell you where things are going...you need to wake up from the trance your in.
I remember not long ago being laughed at for calling a housing correction to happen soon. (they are not making any more land in AZ - BULL) People do not understand market value....Well here we are....and I'm sure people will scoff at what I am about to say also.
In itself, a correction in real estate is not enough to bring down
the whole economy. Unfortunately, the contagion from the
sub prime meltdown is spreading to the stock market, the insurance
industry, banking and pensions.
Then the energy thing I have rambled about for a long time comes into play. Energy is every thing people…with out an excess the house of cards comes down….
If your not aware...Cantrell in Mexico (where most of our oil comes from) is in decline....Yes they have come out and said it publicly.
What do you think is going to happen when they can't export and even worse don't have enough for their people?
1% per year decline in oil output until 2010, which then drops 4% a year. Within 4 years from today, gasoline could be over $10 a gallon.
Yes OPEC says it will pump more...they say that allot but they never really pump more...cause they can't.
. . . the world hasn’t been taking into account the rapidly rising
consumption of oil in the very countries the world depends on to
export large quantities of crude – places like Saudi Arabia and
Russia. With oil consumption rising in these oil-producing states –
and with production looking like it is declining – the
amount of oil available for export globally is about to plummet,
setting off a net export crisis that threatens the
global economy and will lead to sweeping social and economic
changes in the United States....
At these rates, nothing is going to be affordable for much longer, except the superfluous “junk” that everyone has collected and will soon desperately try to sell off.
In short...Get out of the suburbs....Downsize big time.

Tequila-John
07-25-2007, 07:21 AM
In the beginning of this year, there was a lending company on the second floor of our building. 50k sq-ft of cubes had to be close to 250 people. They were all let go one day. Poof they were gone and we had a lot more parking spaces in the garage.
Sad stuff for sure. Co are shutting down daily and it truely does suck. I was luck enough to get my lic here in AZ and can also do loans in 12 other states. I work from my home office and have no one working for me that i need to worry about. I keep my overhead slim and try and stay focused.

lucky
07-25-2007, 07:47 AM
Quite a few lenders have pulled the plug on stated income/stated asset loans, ARM's and 100% financing. W/o getting into a pissing match what do you guys think we are heading to and what have you seen?
its sucks :) buyers market in about 1 year , we are just getting into the slump ! be patient and buy later - I haul for the building market , It is dead all over and everyone is feeling the pinch ! all new housing has stopped and special finiancing on the houses that are built already ! people are getting desperate :) :idea:

Wmc
07-25-2007, 07:53 AM
As I person still working for a Small bank that does A Paper and Alt A I will tell you this much it has been a struggle to get a good loans through the door and even more of a challenge to get the loans funded. With all the investor's tightening it has made for difficult times in our household. But all you can do is keep on truckin. Get out there and visit the brokers that still have the loans. The unfortunate thing is we no longer offer 100% stated/verified as of 2 days ago, that was a hot ticket. We still have arms, 40, 50 years, Fixed option arms and stand alone seconds. However those folks that did 100% financing in the last couple of years and the arms are now adjusting they can't get new loans, because the values aren't there. That is another huge problem with the loan getting closed, values get cut constantly. It's ashame, I feel horrible for all those people that tried to live the American Dream in purchasing a home, but with little to no money down. At this point I may be going into another industry because I can't hold on 2 more years.

westair
07-25-2007, 07:53 AM
[QUOTE=westair;2691284]
from the high point yes. Homes that were 200k in 2001 reached prices of 440k in 2006 with incomes being pretty flat and you see no problem there:rolleyes: Maybe this will help. Also take a look at the inventory for San Bernardino and Riverside. Florida has the same problem and they are crashing big time.
Just an observation I am not in the industry.
http://www.financialsense.com/editorials/bronson/2006/images/0907/chart10_lg.gif
I am not in the industry either but isn't this whole thing about the interest rate. When it hit its lowest point in 40 years or so housing prices took off.
As soon as the rates come down the market will adjust again, seems simple
to me:confused:

Tequila-John
07-25-2007, 07:56 AM
As I person still working for a Small bank that does A Paper and Alt A I will tell you this much it has been a struggle to get a good loans through the door and even more of a challenge to get the loans funded. With all the investor's tightening it has made for difficult times in our household. But all you can do is keep on truckin. Get out there and visit the brokers that still have the loans. The unfortunate thing is we no longer offer 100% stated/verified as of 2 days ago, that was a hot ticket. We still have arms, 40, 50 years, Fixed option arms and stand alone seconds. However those folks that did 100% financing in the last couple of years and the arms are now adjusting they can't get new loans, because the values aren't there. That is another huge problem with the loan getting closed, values get cut constantly. It's ashame, I feel horrible for all those people that tried to live the American Dream in purchasing a home, but with little to no money down. At this point I may be going into another industry because I can't hold on 2 more years.
I agree. I talk with people all week and have to turn down about 3-5 loans a week becasue on the Loan to vaule. Some are 50-90k upside down. It never gets easy telling these people there is nothing I can do... I tell them the first thing i would do when they hang up with me is call there current lender to see if that can help. Maybe convert there Arm to a fixed rate or extend there ARM for a couple years longer...

NashvilleBound
07-25-2007, 07:58 AM
Looks pretty bleak in CA. Brother in law has home in Escondido... start home(uh, ya) that was valued at $540k two years ago and cant sell it for $440 now. I thought for sure the lower market would still be moving....
TN is a bit flat right now but now going backwards by any means.... but then again a single wide is always pretty reasonable. :D

Wmc
07-25-2007, 07:59 AM
I agree. I talk with people all week and have to turn down about 3-5 loans a week becasue on the Loan to vaule. Some are 50-90k upside down. It never gets easy telling these people there is nothing I can do... I tell them the first thing i would do when they hang up with me is call there current lender to see if that can help. Maybe convert there Arm to a fixed rate or extend there ARM for a couple years longer...
Yes as long as that lender is still in business! I think that would be the honorable thing to do. These lenders need to step up to the plate to try and help these people keep their homes. Good luck out there!

Cole Trickle
07-25-2007, 08:10 AM
Yes as long as that lender is still in business! I think that would be the honorable thing to do. These lenders need to step up to the plate to try and help these people keep their homes. Good luck out there!
What percentage of loans written in the past 2-4 years were 3-5 year arms with 100+% financing?
Do you feel like most of the people you helped out shot way over there head?

socalmoney
07-25-2007, 08:20 AM
Good and Bad. It depends on your situation. It is bad if you HAVE to sell. It is good if you want to buy. Rates are still low for a 10 year average, and if you are buying with the intent to never sell. This makes the value fluctuation a non issue. It is time to buy and take advantage of all the advantages the "buyers market" has to offer.
Why would anyone with any brains buy right now. Do the math. If I buy a house for $400k and it looses 25% in the next 2 years (I think I am being a little conservitive on that) and it's only worth $300K when the market has corrected I would have to wait a long time to get my money back if the market increases at 2% -3%. Wouldn't you want to wait 2 years to buy rather than 10 to see your money.
I did in June had $50K in incentives to the buyer. He used $21 K in closing cost (Huge Rate buy-down) and $30K in upgrades.
My $0.02
This is part of the problem as well. Home owners who bought 10-20 year old houses and want out can not compete with the new home builders. New home builders will continue to build and loose money on the house instead of just sitting on vacant land they can not sell. They will continue to build at a slower rate. I heard yesterday that one particular home builder has gotten their square footage cost down to $40 bucks. They are driving the cost of construction down but Subs aren't making too that much money. They are competing for the jobs to keep people employed. It is a mess out there.

Outnumbered
07-25-2007, 08:30 AM
I'm having a great year, better than last but some of my buddies in the business are slow. California seems to be getting hit worse for us. I do appraisals for mortgage loans.
Values are holding pretty well but have been sliding downward in most areas. It varies from zip to zip. Newer areas like Surprise, Buckeye, Queen Creek, and Maricopa are taking a beating. Old town Scottsdale and similar older areas in town are doing pretty well compared to most.

Wmc
07-25-2007, 08:37 AM
What percentage of loans written in the past 2-4 years were 3-5 year arms with 100+% financing?
Do you feel like most of the people you helped out shot way over there head?
I would say that 65% or more did 100% financing and did a 2/28 interest only, or 3/27 interest only with subprime.
The lowet arm I personally did was 5 yr interest only, with a 3 yr prepay. I did alot of 100% as well. I don't work with the general public, I work with the brokers (who work with the customer). But peronally that is why we are in the mess we are in is because too many people got loans (i/o amrs) that they couldn't handle once they started to adjust and the market values of homes started to come down so they don't have the value to refi into a 30 year fixed loan. They walk!

Dave C
07-25-2007, 08:41 AM
What about those (majority) of us that don't work in the real estate/R/E support business? We aren't having too much trouble. I don't think they will be foreclosing on us anytime soon. ;)
Also if the price corrects even a little, more of us non-R/E folks will be better able to afford the once so called over-priced house.
Even if credit lending standards tighten, that will shrink but not completely eliminate buyers. There will always be buyers. The question is what can these buyers afford given the new standards? Quite a lot I imagine.
Most of us still consider houses as a staple and a long term investment.
We shall see what happens (I ain't making no predictions)

jbtrailerjim
07-25-2007, 08:48 AM
Interesting article in todays local paper on forclosures in my area. It's not looking so good. An 800 percent increase in forclosures in the second quarter in Riverside County compared to the second quarter in 2006. :eek:
Inland default notices see sharp rise
09:17 PM PDT on Tuesday, July 24, 2007
By LOU HIRSH
The Press-Enterprise
Lenders sent default notices to Inland homeowners at nearly triple the rate of a year ago, as owners continue to fall behind on payments amid a slump in the real estate market.
Statewide, default notices, the first step in the foreclosure process due to delinquent payments, were the highest in more than a decade, according to figures released Tuesday by DataQuick Information Systems.
DataQuick reported that in the Inland region, homeowners received 11,789 notices of default in the second quarter, rising from 4,126 default notices in the same quarter of 2006.
The number of homes that ended in foreclosure saw an even sharper increase, hitting their highest levels in a decade.
In Riverside County, foreclosures in the second quarter totaled 2,509, an increase of nearly 800 percent from 281 in the second quarter of 2006. That was a record for Riverside County, where the previous peak was 1,482 in the third quarter of 1997, according to DataQuick.
In San Bernardino County, 1,489 homes were foreclosed in the second quarter, up nearly 1,000 percent from 137 a year ago. That county's record is 1,761, hit in the third quarter of 1997.
Story continues below
Stan Lim / The Press-Enterprise
The highest foreclosure filings are in Fontana ZIP code 92336.
Reflecting a statewide trend, experts note that many who used subprime loans to purchase homes during the real-estate run-up of 2004-05 are now facing higher monthly payments because low introductory rates have expired.
"It's not an economic situation with job losses or a recession," said DataQuick analyst Andrew LePage. "It's more about risky financing packages and affordability constraints."
Experts say six months usually separate a notice of default from a foreclosure.
LePage noted that about half of California homeowners who were sent default notices are avoiding foreclosure by catching up with payments or selling the home. A year ago, 81 percent were avoiding foreclosure.
Some agencies that help consumers avert foreclosure have seen a sharp increase in calls for advice this year. Albert Tovar, assistant manager for foreclosure prevention at Springboard Nonprofit Consumer Credit Counseling in Riverside, said his office saw phone calls jump from 3,378 in January to 5,351 in April, and they still hover around 4,000 per month.
About 50 percent of callers end up requesting financial counseling, Tovar said. Twenty counselors advise clients on ways to lower their spending and change their lifestyles to allow room in their budgets for higher payments.
Those who can't make adjustments and are extremely pressed for cash may end up having to sell the home to carry away some spending money, even if they sell at a loss, Tovar said.
"They really have to decide how badly they want to keep the house," Tovar said, adding "most people tend to do whatever it takes to avoid foreclosure."
LePage noted that the state's more affordable regions are historically more vulnerable to foreclosures when housing markets experience downturns. That includes the Inland region, as well as the Central Valley, San Joaquin Valley, Sacramento and Stanislaus County.
DataQuick said the worst-hit neighborhoods in the Inland area and Central Valley might already be seeing property values eroded somewhat by foreclosures.
Statewide, the firm reported, 17,408 homes were lost to foreclosure in the second quarter. That was the highest number in DataQuick's statistics, going back to 1988, and a jump of nearly 800 percent from 1,936 a year ago.
According to Inland data from Irvine research firm RealtyTrac, the highest total foreclosure filings by ZIP code in the second quarter -- including default notices, trustee sale notices and bank repossessions -- were seen in Fontana 92336 (461), Murrieta 92563 (441), Hesperia 92345 (416), Rialto 92376 (368) and Victorville 92392 (359).
Reach Lou Hirsh at 951-368-9559 or lhirsh@PE.com
Default notices
Notices of default are the first step in the foreclosure process when payments are delinquent. California counties saw increases in defauts in the second quarter when compared to the same period last year.
Los Angeles: 126.6 percent
Orange: 137.8 percent
San Diego: 146.5 percent
Riverside: 190.7 percent
San Bernardino: 179.6 percent
Ventura: 134.3 percent
SoCal Total*: 1151.2 percent
*Includes additional counties
Source: DataQuick Information Systems

cdog
07-25-2007, 08:51 AM
What percentage of loans written in the past 2-4 years were 3-5 year arms with 100+% financing?
Do you feel like most of the people you helped out shot way over there head?
This is the biggest problem. The % is huge in CA. The real killers are the neg am loans. Depreciation & decline in values mixed with an ever increasing loan amount are sure to catch up sooner or later. The stats I've read say that the first big wave of sub prime resets will happen in October -November this year. And again in the 2nd to 3rd quarter next year. Don't fool yourself. It's not contained to just sub prime. The fire started with sub prime and has spread to A paper by bringing down values. The lenders are closing the doors because the business model has changed. It went from high volume & lower profit per transaction to low volume while tiring to compete with everyone else for biz. The market dictates what one can charge. Many are closing their doors to avoid being sued for shady lending practices. I know of a Huge lender filing for BK this fall. He’s tried to save his company but must BK to avoid loosing everything in court.
http://www.itulip.com/images/interestonly.gif
http://www.itulip.com/images/armadjust.gif

The Doctor
07-25-2007, 09:00 AM
I'll admit I don't have a handle on the California market but from the sound of your own stories, things glutted too much to maintain and there will be more correction than we are realizing here in the Greater Phoenix area.
It will take a crystal ball to answer these questions and I have heard it likened to water issues we all face. We have floods and droughts. The earth has the same amount of water all the time but certain regions suffer changes in weather patterns (El-Nino and La-Nino, etc.) It's our opportunity to build dams/reservoirs and control the flow so we can have what we need on that dry day. The same amount of money is flowing in and around us but when the real estate market suffers, it flows over into the stock market or elsewhere. When if flows our way, in the form of low interest rates or no-qualifying lending, we must use some prudence to maintain equity where we can get at it in case we get pushed into a corner. The recent real estate feeding frenzy was fueled by many who threw no caution to the wind and now that very wind they fueled is going to seem like a hurricane beating on them for not hours but months.
Being frugal insures success at any income level.

Dave C
07-25-2007, 09:14 AM
thats blasphemy sir.... ;)
.........we must use some prudence to maintain equity......
.....Being frugal insures success at any income level.

Coach
07-25-2007, 09:19 AM
This is from the OC Register this morning
Realtors expect market rebound by early 2008
Meeting in Orange County, the National Association of Realtors' leadership answer questions about legislation, discount brokers and the Justice Department's anti-trust suit.
By JEFF COLLINS
The Orange County Register
Dana Point The housing market will rebound by the end of this year or the start of next year, with U.S. home prices and sales rising in 2008, the CEO of the National Association of Realtors said during a recent leadership retreat at the Ritz Carlton here.
A new association forecast issued last week projected that prices next year will rise by 1.8 percent, but NAR CEO Dale Stinton was even more optimistic, saying he expects prices to go up as much as 4 percent next year.
"We don't quite see the gloom and doom that other people see," Stinton said. "When you look at the macro data and when you look at the country as a whole, it's still a pretty darn good time to be looking at property."
Stinton's remarks came during an interview last week with national and state leaders of the industry's biggest trade association. The leadership huddled for three days at the oceanfront hotel to prepare for Long Beach broker Dick Gaylord's year as NAR's 2008 president. Among their key comments during the interview:
NAR expects the current session of Congress to focus heavily on housing issues.
Officials defended NAR's position in a 2005 federal anti-trust lawsuit over use of online home listings. The case will probably go to trial in Chicago next winter.
While 11 states ban discount brokers from giving their clients commission rebates, NAR's ethical policies allow such rebates.
Here's a summary of their comments:
Housing legislation
Among the key actions on Congress' agenda this year is a measure that would raise the "conforming" home loan limits for borrowers in California, said Jerry Giovaniello, NAR's chief lobbyist. Currently, borrowers seeking to qualify for loans bought by agencies like Fannie Mae and Freddie Mac are limited to borrowing $417,000, while the median price of a California home is above $590,000.
Other matters before Congress include Federal Housing Administration reforms to make the FHA-insured loans more attractive, creation of an Affordable Housing Trust Fund to pay for development and preservation of affordable homes, and foreclosure hearings to ask regulators why so many homeowners were allowed to get in over their heads, he said.
"What was troubling (about the first foreclosure hearings) is that some regulators said that the companies that were making loans (that ended up in default), 'we don't regulate them. There's no law that says we have to watch what they're doing,' " he said.
Giovaniello said Congress likely will require better disclosure so that borrowers using exotic loans understand what they're getting into.
Anti-trust suit
NAR is sticking by an online home-listing policy that sparked a U.S. Justice Department lawsuit accusing the association of suppressing competition.
At issue is a policy allowing brokers to "opt out" of having their listings appear on another broker's Web site. Critics say the practice seeks to eliminate discount brokers by keeping the listings of big real estate chains off their sites.
Laurene Janik, NAR general counsel, denied that the association is being anti-competitive, noting that only 48 brokers nationwide have used the opt-out policy to keep their listings off another's Web sites. She said that in some cases, Web sites allow sometimes inaccurate Zillow.com price estimates to appear on listings with prices well above Zillow's "Zestimates."
"Agents should be able to say that's not in my interest," Janik said.
Commission rebates
On a related topic, Janik also noted that while 11 states have banned commission rebates, such bans are contrary to NAR's policies.
"The bans have been on the books for many years, she noted, but only recently came into the spotlight as discount brokers sought to rebate part of their commissions to home buyers. NAR's code of ethic says is there's nothing inherently unethical about any gift, premium, prize or rebate that's offered to a consumer so long as it's adequately disclosed, she said.
However, Janik said the association won't seek to have those bans lifted because NAR does not get involved in lobbying at the state level.
"We leave a determination as to what's best for a state up to our state associations," she said.

HotRod82
07-25-2007, 09:26 AM
Personally, I think most are UNDERESTIMATING the effect of the HELOC money drying up. Our consumerism was financed by helocs and credit cards. Currently both (for most people) are maxed out. The trickle down is alredy being felt in the Miami area which is the forefront of the RE crash. Sure, it will depend on what your zip code is, but some areas are as of today being drawn into recession because the RE bubble burst. Also, this war and energy futures are going to dictate EVERYTHING. We can no longer count on energy being a fixed, reliable commodity. For example, take a look at the trucking industry...small companies are folding by the hour!! BTW...the sub prime fiasco is not that much money in the big picture, it accounts for less than 1/10 of 1 percent of the total residential RE market. Sub prime lenders are the least of my worries....Smart folks will save up their cash and scoop up the deals in the coming years. If it drops another 20%, you will find me living on the beach in Del Mar.......

socalmoney
07-25-2007, 09:29 AM
I'll admit I don't have a handle on the California market but from the sound of your own stories, things glutted too much to maintain and there will be more correction than we are realizing here in the Greater Phoenix area.
AZ is a bubble market and Phoenix is at the center of it. Real estate is fascinating to me because it is really the study of human behavior. The market value is dictated by peoples perception in a large way. It is ruled by two things. Fear and Greed. Fear that you will be the only one at the lunch table who doesn't own a home. Greedy people who's 2400 sqft wasn't enough and wanted 4k. This is the real shame, there are so many people who stepped up to a larger house with crazy loans. If they had just stayed put, all would be OK. Greed also played a big roll in the Phoenix area when many people refied their house here to speculate in AZ. If you want to know where we are headed, just take a look at what happened to Japan in the 90s.
This is a good read. I recommend it to everyone.
http://www.michael-hudson.com/articles/debt/Hudson,RoadToSerfdom.pdf

EmpirE231
07-25-2007, 09:30 AM
You would think that banks would lock in the rates for people that have 1-3 year fixed loans, so they can avoid the house going into forclosure when the 1-3 term is up :idea:
but I don't see it going down anywhere near 40% from where it is now.... that's like taking away 40% of the banks notes.... they would all be in BK. but hey... if it does... I should wait 1 more year before I buy a house in havasu :D

socalmoney
07-25-2007, 09:33 AM
This is from the OC Register this morning
Realtors expect market rebound by early 2008
Meeting in Orange County, the National Association of Realtors' leadership answer questions about legislation, discount brokers and the Justice Department's anti-trust suit.
I don't trust anything National Association of Realtors has to say.

Trailer Park Casanova
07-25-2007, 09:34 AM
This is a teriffic thread, Some great takes and eye openers.
One thing for me to throw out there are the WW2 babyboomers are hitting retirement age, and only about 16% have financially prepaired (according to Ben Stein) to pull the pin.
Of those that didn't loot their homes equity for toys:
A huge segment of these WW2 babyboomers were planing to cash in their home equity, then "buy down", and live off the difference to supplement their retirements.
Or the highly touted reverse mortgages.
The cashing in of their homes equity was the BFD kicker to make it all happen.
My moms social security and Disney pension was less than $1300 a month. Lot's of people are in that boat.
That barely covered her ciggarettes & bartab.
Perhaps the baby boomers will have to work a spell longer.
Any loopholes in reverse mortgages that kick in when the equity takes a deluxe rollback?
Don't say Fuc# the future, the futire Fuc#s you if you don't prepair.

socalmoney
07-25-2007, 09:35 AM
You would think that banks would lock in the rates for people that have 1-3 year fixed loans, so they can avoid the house going into forclosure when the 1-3 term is up :idea:
but I don't see it going down anywhere near 40% from where it is now.... that's like taking away 40% of the banks notes.... they would all be in BK. but hey... if it does... I should wait 1 more year before I buy a house in havasu :D
It wont be 40% down from today, it would be 40% down from the top of the peak which was a while ago.

HocusPocus
07-25-2007, 09:37 AM
AZ is a bubble market and Phoenix is at the center of it. Real estate is fascinating to me because it is really the study of human behavior. The market value is dictated by peoples perception in a large way. It is ruled by two things. Fear and Greed. Fear that you will be the only one at the lunch table who doesn't own a home. Greedy people who's 2400 sqft wasn't enough and wanted 4k. This is the real shame, there are so many people who stepped up to a larger house with crazy loans. If they had just stayed put, all would be OK. Greed also played a big roll in the Phoenix area when many people refied their house here to speculate in AZ. If you want to know where we are headed, just take a look at what happened to Japan in the 90s.
This is a good read. I recommend it to everyone.
http://www.michael-hudson.com/articles/debt/Hudson,RoadToSerfdom.pdf
i know of several people who did just that, got out of a home they could easily afford to move up to a bigger home that they could barely qualify for and now are losing it. i have been in my house in CA for 10 years and would like to step up to something bigger but i am in no hurry.

bigq
07-25-2007, 09:39 AM
NAR...:D :D That's like asking Bush how the war in Iraq is going:rolleyes:

bigq
07-25-2007, 09:41 AM
[QUOTE=bigq;2691321]
I am not in the industry either but isn't this whole thing about the interest rate. When it hit its lowest point in 40 years or so housing prices took off.
As soon as the rates come down the market will adjust again, seems simple
to me:confused:
Not for me, interest rates are not that high now:confused:
Affordability is key. Most really can not afford a house right now if it was 0% rate for 30 years.:(

bigq
07-25-2007, 09:43 AM
It wont be 40% down from today, it would be 40% down from the top of the peak which was a while ago.
Yea true that is what i wass trying to say:D I have alrready seen quite a drop from the peak in asking prices in some areas. Even Havasu just last week broke the 150k mark for R1.:eek:

C-2
07-25-2007, 10:08 AM
I just got off the phone with one of the REO eviction attorneys we used to work with in the early 90's.....he said it's already BUSIER than 90'-95', and sez there's more coming down the pike.
Just like the early 90's - life goes on like normal for most folks.
If I was a buyer...I would still wait another 6mos to a year, maybe even longer.
Remember, on 100% loans, the banks are foreclosing on the First notes, the 80's. They still have a 20% equity buffer, the market will have to drop below 20% in value before banks even start losing money. So REO's won't be a good buy for some time to come (unless, of course, yiu get them pre-foreclosure).

driverno8
07-25-2007, 10:18 AM
My wife was a Loan Underwriter for years. She road the wave big time, moving to different companies until she was at the top. We got a LOT of nice toys out of it. She bailed on her own right before this whole mess started because she saw it coming. Wanted to be a stay at home mom. Fine by me. It's been a year with-out her working. Yea, I miss the $200k+ salary, but we got everything we wanted out of it. I'm just in-charge of keeping it all. So far so good. But it was a fun time for sure. She'll stay at home for a few more years and catch the wave again next time around.

cdog
07-25-2007, 10:28 AM
AZ is a bubble market and Phoenix is at the center of it. Real estate is fascinating to me because it is really the study of human behavior. The market value is dictated by peoples perception in a large way. It is ruled by two things. Fear and Greed. Fear that you will be the only one at the lunch table who doesn't own a home. Greedy people who's 2400 sqft wasn't enough and wanted 4k. This is the real shame, there are so many people who stepped up to a larger house with crazy loans. If they had just stayed put, all would be OK. Greed also played a big roll in the Phoenix area when many people refied their house here to speculate in AZ. If you want to know where we are headed, just take a look at what happened to Japan in the 90s.
This is a good read. I recommend it to everyone.
http://www.michael-hudson.com/articles/debt/Hudson,RoadToSerfdom.pdf
Actually the IE is at the center of it. I know an appraiser that does work for Fannie Mae. She say's 1/4 of all the homes she's appraised over the last 6 months have been bank owned. Last I heard phoenix is out of the top 10 as far as foreclosure’s go. Vegas was the second most bloated market. I think you'll find phoenix will rebound faster as Cali family's leave CA looking to pay lower taxes (income & property) and bigger nicer homes to raise their family's in. All markets are adjusting. Buyers buy on rates not prices. 1/2 of a percent in rate wipes out 8% of the buyers and prices would have to reduce price by 11% to keep the payment the same prior to the 1/2% increase. Too many know it all’s and not enough facts.

bigq
07-25-2007, 10:43 AM
Buyers buy on rates not prices. 1/2 of a percent in rate wipes out 8% of the buyers and prices would have to reduce price by 11% to keep the payment the same prior to the 1/2% increase. Too many know it all’s and not enough facts.
Rates or payments? I know I use to look at payments for almost everything, but I have started looking at the price and affordability more. Do people look at a hose as 500k a hlf million dollars or just someone saying you can own this house for 1600 a month if you go with this rate and loan?

Big Inch
07-25-2007, 10:48 AM
Any loopholes in reverse mortgages that kick in when the equity takes a deluxe rollback?
Reverse mortgages are set up very much like an equity line but with very conservative ltv requirements. I don't see people in a reverse mortgage being at a high risk of foreclosure. Especially since it's hard to miss your mortgage payments and go into default when your payment is issued as a check to you every month.

cxr133
07-25-2007, 11:09 AM
Now all you people need to do is get rid of all the illegal immigrants that fully support this states #1 industry and all your houses are sure to go back up in price. I bought my house is '98 and my boat loan is not a 2nd. ;)
LOL i bought my house in '97 and i refinanced with no cash out like 5 years ago for the lower interest rate. i just sat and watched home prices go up and up and up, now im waiting till they come crashing back down so i can buy a river house at fire sale prices!!

Old Texan
07-25-2007, 11:12 AM
Rates or payments? I know I use to look at payments for almost everything, but I have started looking at the price and affordability more. Do people look at a hose as 500k a hlf million dollars or just someone saying you can own this house for 1600 a month if you go with this rate and loan?
Sounds like how some folks buy cars and for that matter how they are sold, all interested in the monthly payment and how it fits their perceived "budget".:confused:
For the life of me I just never understood no interest loans or ARMs, they just smell of overextension and high notes down the road. Here in TX back in the late 70's, early 80's we were buying and several realtors were suggesting "ballon mortgages" as they called them. Rates were running in the mid to high teens and the ballons were starting aound 11%. I was very skeptical and could only foresee escalating rates which proved out over the next several years, loans were being forced to lock in at 15% plus and repos in TX were at all time highs. Rates went up and inflated property values went down.
Although I ended up in an older home that wasn't what we wanted, I found an assumable mortgage for 9% fixed at a time when that was one helluva rate. I held that loan until rates went down, refinanced and eventually sold at a nice profit. The key was not getting into the "perfect" home that wasn't a smart deal financially.
Sadly too many don't realize the future risks and basicaly gamble their financial futures away. It's really hard to feel sorry for them, especially those that play with the equity, a very foolish gamble.

cdog
07-25-2007, 11:34 AM
Rates or payments? I know I use to look at payments for almost everything, but I have started looking at the price and affordability more. Do people look at a hose as 500k a hlf million dollars or just someone saying you can own this house for 1600 a month if you go with this rate and loan?
Yes. The 1600 per month scenario is what drove us up to where we are at today. The cheap rate stimulious is now taken off of the market and prices has to adjust DOWN to make sense. Unless income goes up 20%, rents skyrocket or tax's go down, prices have to retract. Which one sounds more likely? What most people don't understand is rates are still decent. The prices are out of whack. Why should I buy a 3 bed home in OC with 20% down for 700k with 10k a year in tax's at monthly nut of $4300 or rent that same home for $2300? The fundamentals of why you should buy are in the crapper. Rates stimulate demand and demand drive's up price.

C-2
07-25-2007, 11:49 AM
Yes. The 1600 per month scenario is what drove us up to where we are at today. The cheap rate stimulious is now taken off of the market and prices has to adjust DOWN to make sense. Unless income goes up 20%, rents skyrocket or tax's go down, prices have to retract. Which one sounds more likely? What most people don't understand is rates are still decent. The prices are out of whack. Why should I buy a 3 bed home in OC with 20% down for 700k with 10k a year in tax's at monthly nut of $4300 or rent that same home for $2300? The fundamentals of why you should buy are in the crapper. Rates stimulate demand and demand drive's up price.
Yuppers, agreed.
Middle class incomes are barely enough, or not enough, to sustain a median price home in So Cal - that's a problemo.

AirtimeLavey
07-25-2007, 11:51 AM
Actually the IE is at the center of it. I know an appraiser that does work for Fannie Mae. She say's 1/4 of all the homes she's appraised over the last 6 months have been bank owned. Last I heard phoenix is out of the top 10 as far as foreclosure’s go. Vegas was the second most bloated market. I think you'll find phoenix will rebound faster as Cali family's leave CA looking to pay lower taxes (income & property) and bigger nicer homes to raise their family's in. All markets are adjusting. Buyers buy on rates not prices. 1/2 of a percent in rate wipes out 8% of the buyers and prices would have to reduce price by 11% to keep the payment the same prior to the 1/2% increase. Too many know it all’s and not enough facts.
That about nails it. Many of these "expert/know it all" opinions are very entertaining to read, though. You particularly have to love those that are not in the industry who know it better than those in the business. "My neighbor down the street...." It is interesting to read the "street talk", though.
It's definitely a turbulant time in lending and RE. As for RE, my .02 is that it's all about affordability, and somehow that's going to be/has to be addressed and corrected before any recovery happens. The lending practices needed to be purged, but unfortunately, it going to be at the expense of many naive people.
Asking prices are clearly coming way down, but haven't seen people lose money yet on homes they bought a couple of years ago (unless they bought in certain new building tracks). It's definitely getting tough to sell a home in this market even for the most experienced agents, and especially those that only use the "traditional" methods. The shock of the importance of pricing is setting in on most sellers and buyers should be negotiating hard on their deals.
The next 6-9 months will be interesting for sure.

2Driver
07-25-2007, 11:52 AM
Who gives a chit, Carefree went up another 6% last 12 months. :D :D
Seriously, step back from the detail and anxiety and you will notice nothing new as this all comes in cycles. Similar to cycles in the stock market and in the economy. Things go up, cool off, remain stagnant for a period of time then start all over again.
Assuming you don't buy in the last 6 months of the run up or the first 6 months of the cooling off period, the more important question to ask yourself is where you are in your life in regards to age to retirement, income and period you intend to stay in the home.
If I was 30 and planning to live in the home for 5 years or more, I'd buy now without hesitation. If I was planning on moving in 2 years maybe not.
The only real mistake is to sit on the sidelines and watch the cycles repeat themselves afraid the whole thing is going to bottom out someday.

AirtimeLavey
07-25-2007, 12:02 PM
Who gives a chit, Carefree went up another 6% last 12 months. :D :D
Seriously, step back from the detail and anxiety and you will notice nothing new as this all comes in cycles. Similar to cycles in the stock market and in the economy. Things go up, cool off, remain stagnant for a period of time then start all over again.
Assuming you don't buy in the last 6 months of the run up or the first 6 months of the cooling off period, the more important question to ask yourself is where you are in your life in regards to age to retirement, income and period you intend to stay in the home.
If I was 30 and planning to live in the home for 5 years or more, I'd buy now without hesitation. If I was planning on moving in 2 years maybe not.
The only real mistake is to sit on the sidelines and watch the cycles repeat themselves afraid the whole thing is going to bottom out someday.
That basically sums up my whole perspective on this. Good points. :D

cdog
07-25-2007, 12:04 PM
Who gives a chit, Carefree went up another 6% last 12 months. :D :D
Seriously, step back from the detail and anxiety and you will notice nothing new as this all comes in cycles. Similar to cycles in the stock market and in the economy. Things go up, cool off, remain stagnant for a period of time then start all over again.
Assuming you don't buy in the last 6 months of the run up or the first 6 months of the cooling off period, the more important question to ask yourself is where you are in your life in regards to age to retirement, income and period you intend to stay in the home.
If I was 30 and planning to live in the home for 5 years or more, I'd buy now without hesitation. If I was planning on moving in 2 years maybe not.
The only real mistake is to sit on the sidelines and watch the cycles repeat themselves afraid the whole thing is going to bottom out someday.
Well said. We're looking in a certain neighborhood in north Scottsdale. The homes range from High 5's to low 7's. The asking price's are all over the place. Some are just ridiculous. I won't buy unless I get a 3 car garage, RV parking, a pool and 3000+ sqft.. I'm driving out there tomorrow to look at one that's 3700 sqft for 575k on .25 acre. At peak these were selling for 735k. I can wait a little longer but the price is nice. BTW the taxes are only 2k a year.

ViB
07-25-2007, 12:11 PM
Now for a front line take on a different part of the country; Colorado
Out here I do commercial and some residential (when I get sucked into it by a friend or relative...). what I see is a great deal of demand that is becoming pent up. Also people who are 'trapped' in their home due to 100% financing, the home is worth 5-10% less now, and they want or need to move (job change, family status,etc.)
for the people that do have equity, they are dissapointed with the prices, but moving anyway. I believe that Forbes just rated Colorado as the 9th best market in the country for selling homes because we actually DO have some buyers here.
Prices are falling in some areas, and still rising in others. Overall, we may be seeing .1-1% annual declines, but as they always say 'location, location, location' determines YOUR particular price.

uLtRADeNniS
07-25-2007, 12:18 PM
Brokers are getting to the point where they cant refi their own houses anymore to use that money to keep their offices open. They are shutting down all over the place. If you stand outside the Citrus Valley Board of Realtors you will see Agents walking in and out every day canceling their memberships. I just talked to an agent that said his only deal fell out of escrow and he has little money in the bank and his credit cards are maxed out. With no other source of income.
Alot of investors aren't putting there chips in RE right now but rather the stock market. Which is hurting Commercial and Multi-Family sales.
The NAR (National Association of Realtors) predicts that America can expect this market to stay for another 24 months. With the Exception Of Florida and So Ca, Which can expect 34 months due to getting hit alot harder.
Areas that where over saturated with homes in the last few years are really hurting the worst in sales. In our area that would be Rancho Cucamonga, Fontana, Corona and Temecula.
My buddy who is a project supervisor at Edison said that Big Developers are selling off projects in small phases to smaller companies and trying to get out asap. Thats why you see alot of these huge projects on hold because the big developers cant sell anything so there not building anymore. If you look at that huge community in Azusa called Rosedale, You wont see tractors or materials there.. They are finishing the homes they started and putting the rest on hold from what I hear and see. Dont get me wrong there are still developers that are pushing out homes, but those are typically the non cookie cutter and more custom homes. Infact there was a developer that had 4 of these homes in Glendora that all sold before there where signs in the yard for $900k+.
I feel that the News and Media is also throwing a wrench into RE. They base alot of there reports off national reports not ones that pertain to our area or merely opinions which give both buyers and sellers cold feet.
So I have no clue where that industry is going.. But based off history I do know it will double again.
...just my .02:D

YeLLowBoaT
07-25-2007, 12:21 PM
I saw in the paper this morning, last quater there were 17k+ homes repoed in CA. thats up 800% from 2nd quater last year.

sdpm
07-25-2007, 12:33 PM
Heard on the radio yesterday morning that 1 out of every 191 homes in S. Calif. are in foreclosure and by the end of the year that number is estimated to rise to 1 out of every 163. That's not good! I seriously don't think that the market can come back by next year. I heard from these same guys, 2 to 3 years is more realistic.

2Driver
07-25-2007, 05:58 PM
Well said. We're looking in a certain neighborhood in north Scottsdale. The homes range from High 5's to low 7's. The asking price's are all over the place. Some are just ridiculous. I won't buy unless I get a 3 car garage, RV parking, a pool and 3000+ sqft.. I'm driving out there tomorrow to look at one that's 3700 sqft for 575k on .25 acre. At peak these were selling for 735k. I can wait a little longer but the price is nice. BTW the taxes are only 2k a year.
Good luck on the house. I might be up for lunch if you are around North-North Scotts. But I will have the kid in tow.
Be sure to look at the new 2008 assesments on Maricopa.gov. Most home will see a VERY large increase in taxes for 07 and 08. The sneeky agents are still showing 06 tax rates in the MLS listings.

westair
07-26-2007, 10:43 AM
Just read that the median price for a house in CA rose 3.2 percent last month to 594,000. Statistics by Cal Assoc of Realtors.

AirtimeLavey
07-26-2007, 10:52 AM
Just read that the median price for a house in CA rose 3.2 percent last month to 594,000. Statistics by Cal Assoc of Realtors.
Shhhhh...you're gonna freak out "the sky is falling" people. Remember, according to the experts on here, we're going to lose 40% of value here in So. Cal. Disregard that it looks like rates may come down again. ;)
Looks like Riverside and San Berdo counties aren't fairing very well, though. Down a couple points. Hasn't BLOWN UP, yet.

WYRD
07-26-2007, 10:53 AM
I saw in the paper this morning, last quater there were 17k+ homes repoed in CA. thats up 800% from 2nd quater last year.
musta been a mobile, they shoulda taken off the tires:D

RiverFF
07-26-2007, 10:55 AM
I do real estate appraisals in CA. It seems that every order I get, the comparables are 20-30% less value than the owner thinks their home is worth . Also, the banks and lenders have no tolerance for pushing value anymore. Every appraisal get 2-3 desk or field reviews.

C-2
07-26-2007, 11:04 AM
Shhhhh...you're gonna freak out "the sky is falling" people. Remember, according to the experts on here, we're going to lose 40% of value here in So. Cal. Disregard that it looks like rates may come down again. ;)
Looks like Riverside and San Berdo counties aren't fairing very well, though. Down a couple points. Hasn't BLOWN UP, yet.
My sister is a realtor, neighbors on either side and four friends (at least); 3 mortgage banker friends.
I gotta ask - you know something nobody else knows? Don't ya think it's kind of silly to dismiss the opinions of others since some of our opinions are formed from information gained from our family, friends and neighbors? Or they just making this crap up?;)

riverracerx
07-26-2007, 11:09 AM
Values ARE going down and you will see a flood of foreclosures in the next 12 months, forcing values down even further.

AirtimeLavey
07-26-2007, 11:43 AM
My sister is a realtor, neighbors on either side and four friends (at least); 3 mortgage banker friends.
I gotta ask - you know something nobody else knows? Don't ya think it's kind of silly to dismiss the opinions of others since some of our opinions are formed from information gained from our family, friends and neighbors? Or they just making this crap up?;)
Nope, don't know anything more than working in the business everyday. But that, in and of itself does not mean that I am any more of an expert or that I can predict the future. I don't dismiss others opinions, but I suppose I sound like I am at times. I actually value and enjoy hearing other opinions. Street talk has value. The problem with street talk is many times it's based on rumor, speculation or hype. Many times, people read articles (or just the headlines) and miss the real point of the story because they don't look closely at what's being said. I deal with peoples mis-perceptions all day long.
Fact is, home sales volume is way down, but values are mostly holding (no, not in all areas, but the neg. is under 5%). Yes, foreclosures are about to go through a big cycle, but the impact probably won't be as strong as some think. There will be some impact.
Many of the opinions expressed on here are backed w/stats and actual facts, but to some, it's more fun to play up the drama. I'm impacted heavily by the current market, but won't just throw shiat out there. People were calling this a bubble over 4 years ago, and saying to sell off before the burst. 4 years later, and if you sold back then, you lost. Sure it's hard to sell right now, and I do think a correction is in store, but there's strong arguments against any radical drop as many on here think is happening or will happen.
I usually try to just disspell some of the hype. I've not seen anything that supports a 40% drop in values, yet someone on here threw that out. Sales (volume) are down, sold prices appear steady and the lending industry has had huge changes that were necessary. This will cycle again.
Bottomline, there's opinions across the board on what and when things will happen. No one has a crystal ball. Otherwise, I find it interesting to read all the opinions and perceptions. Never know what you'll learn. :D
Here's some real numbers to ponder.....
http://www.dailybulletin.com/news/ci_6464635

sdpm
07-26-2007, 11:45 AM
On CBS morning news today, a women said that "the worst is behind us now" and this is a buyers market! Alot of homes for sale and rates are still at an all time low.
Most people are followers. If you get enough people telling others that everything is great, they will believe and follow. A short time ago everyone was buying and selling and making money (flipping). They even made a TV show about it. The people sitting on the sidelines could not stand it and got in at the tail end of it and are now stuck. Kind of like a piramid(sp). The same thing happened with the Dot Com's. Remember that?
It is happening right now with the stock market. It is on a run right now and no one wants to get left behind so they are getting in while the real investors that really know what is going on are selling and taking profits.
It's all just a cycle. Has been going on for decades and will continue to. Timing is the key!:idea:

AirtimeLavey
07-26-2007, 11:54 AM
[QUOTE=C-2;2694344]My sister is a realtor, neighbors on either side and four friends (at least); 3 mortgage banker friends.
I gotta ask - you know something nobody else knows? Don't ya think it's kind of silly to dismiss the opinions of others since some of our opinions are formed from information gained from our family, friends and neighbors? Or they just making this crap up?;)[/from youQUOTE]
Also, keep in mind, what you hear from your family, friends and neighbors is probably very local. That's important and good to hear everyone's local experience, but may not reflect a true state of things everywhere. You being in Riverside, you're seeing some of the worst of what's happening in the current So Cal market. Like I said, though, it's always good to hear everyone's experiences. People just need to take things with a grain of salt. Even the stuff I throw out there. :D

HokeySon
07-26-2007, 12:19 PM
Values ARE going down and you will see a flood of foreclosures in the next 12 months, forcing values down even further.
Its is not the foreclosures that bring values down, it is when the banks dump the properties. Then it becomes a vicious cycle. One dumped property becomes the next comp and so on and so on and so on.
Based on the limited info I have from trying to buy a few REO's recently, Banks learned from the last downturn that their sales have a huge effect on the market. At least in the ones I was looking at they were sticking really close to their price and even looking for overbids. As long as the lenders hold, the values will stay somewhat steady.
This is not like last time around. There are not the same pressures for the banks to sell off the assets quickly.
my.02

C-2
07-26-2007, 12:30 PM
Also, keep in mind, what you hear from your family, friends and neighbors is probably very local. That's important and good to hear everyone's local experience, but may not reflect a true state of things everywhere. You being in Riverside, you're seeing some of the worst of what's happening in the current So Cal market. Like I said, though, it's always good to hear everyone's experiences. People just need to take things with a grain of salt. Even the stuff I throw out there. :D
Points taken and thanks for your insights and clarification.
I think it will be worse than the last go around - but even then, and as I stated before, life goes on as normal for the majority of the population. No pending depression or crash of the economy.

BEER&WATER
07-26-2007, 01:21 PM
Its is not the foreclosures that bring values down, it is when the banks dump the properties. Then it becomes a vicious cycle. One dumped property becomes the next comp and so on and so on and so on.
Based on the limited info I have from trying to buy a few REO's recently, Banks learned from the last downturn that their sales have a huge effect on the market. At least in the ones I was looking at they were sticking really close to their price and even looking for overbids. As long as the lenders hold, the values will stay somewhat steady.
This is not like last time around. There are not the same pressures for the banks to sell off the assets quickly.
my.02
this is so true
20 some reo's in havasu on the MLS some have been low-balled 5/6 times by the same agent .. the banks arnt sellin nor have they even countered. that is saying somthing..
by the way "AIRTIME "A BIG THANK YOU FOR THE JOB ON THIS ONE http://www.glamisdunes.com/invision/index.php?showtopic=91184&st=0&p=1974078&
HE KNOW'S HOW TO GET IT DONE!!!!!

socalmoney
07-26-2007, 01:29 PM
Its is not the foreclosures that bring values down, it is when the banks dump the properties. Then it becomes a vicious cycle. One dumped property becomes the next comp and so on and so on and so on.
Based on the limited info I have from trying to buy a few REO's recently, Banks learned from the last downturn that their sales have a huge effect on the market. At least in the ones I was looking at they were sticking really close to their price and even looking for overbids. As long as the lenders hold, the values will stay somewhat steady.
This is not like last time around. There are not the same pressures for the banks to sell off the assets quickly.
my.02
When the assets start stacking up on the books, they will fold and start unloading. It will be a battle of will but it will happen.

BEER&WATER
07-26-2007, 01:37 PM
When the assets start stacking up on the books, they will fold and start unloading. It will be a battle of will but it will happen.
Thats a great point BUT .when that starts to happen the banks are more likely to work something out with with the current owner .. give that some thought

HokeySon
07-26-2007, 02:50 PM
When the assets start stacking up on the books, they will fold and start unloading. It will be a battle of will but it will happen.
Maybe. I just don't think so. The big difference is the way the loans are booked and packaged and securitized. Its not like the s&L scandal days where the s&L's were holding the loans and using the overstated values to meet their asset requirements. When the overstating came to light, along with the bad loans, the regulators then made them dump the properties them to maintain some lilquidity in assets under control. Plus, at that time the banks and s&l's were not sophisticated in handling tangible assets and just wanted to be rid of them. They learned from that and are not so scared to hold property now. Plus, now a lot of these loans that are going bad are securitized just like stocks -- "investors" are losing money and there is no regulation that makes them dump the property.
Anyway, these are just my thoughts from limited information. What you describe may very well happen instead.

catman-do
07-26-2007, 03:08 PM
I agree with a few people saying that there are too many speculators on here. Working for one of the largest subprime lenders in the U.S. and one of the largest financial institutions in the world, I can say that NO ONE truely knows whats going on. The heads of our company are trying to figure out ways in order to keep our doors open for the next 6 months, let alone trying to plan for any rebounds in the years ahead. There are always the "sky is falling" people, as well as the "things have never been better!" people. We are looking at a house right now here in Rancho that is a bank owned (WMC) property. The comps in the neighborhood are all between 699 and 780k, the note in the subject was at 711. Some people ive talked to in the neighborhood say they bought in the mid 8's. This house is being offered in the mid-high 5's right now because WMC cant dump the thing off their books. We may make offers in the 500k even range plus they pay closing costs. If thats the case then we are essentially 2-250k under what the neighborhood is selling at. (however we would cause the prices to drop).
I would say there isnt only the subprime market to blame. Option Arms, 125% loans, and fraudulent loans submitted by greedy brokers were the first to default. Then came the subprime loans, however the ball was already rolling.
Personally, myself and my wife are in subprime. We've laid off over 400 people recently, ive got friends in retail with no job, in title with no job, and in other wholesale companies with no jobs. I feel bad for some of those that only had the mtg industry to rely on (in other words; didnt have a degree, or experience in any other industry and over extended themselves in this industry expecting it to never go away).
This is a good post though! Real eye opener for some people :sqeyes:

desertbird
07-26-2007, 04:09 PM
First hand knowledge of the RE market in Santa Clarita....
..ok, just my condo complex :D
The Wife and I thought we'd try and sneak out of this market and "transfer equity" from the condo to an overpriced (600K) home in Saugus. So what? Sell my condo for it's ridiculous value, and take the $175K I "made" in 4 years and put it down on the next place. If the value goes down, big deal, we're in a house, not the condo.
We made a great deal on a home, got the seller just about 10% under his asking price, and had them agree to a contingency sale.
It all sounds good so far, right?
Well, 65 days later and we've already had two price reductions. Add to that, there is a short sale pending at $40K less than our listing price, and you all get the picture. We're phucked. 1 year ago this person moved in 100% financed, 1 yr ARM. Purchase price, $340K. Short sale price? $280K. Barely enough to cover the 1st and the HOA dues owed.
I am on the board and we approved to waive the late fees and NOD charges just to hopefully facilitate getting 6 months of dues paid, and avoid having a forclosure and subsequent vacant unit in the complex for months.
Santa Clarita is getting smacked in a big way. Lots of middle-class money that bought too little house for too much money, and all of us in the condos that want to take the opportunity to move up can't, becasue 1st time buyers are few and far in between, let alone qualified now!

bigq
07-26-2007, 04:26 PM
I agree with a few people saying that there are too many speculators on here. Working for one of the largest subprime lenders in the U.S. and one of the largest financial institutions in the world, I can say that NO ONE truely knows whats going on. The heads of our company are trying to figure out ways in order to keep our doors open for the next 6 months, let alone trying to plan for any rebounds in the years ahead. There are always the "sky is falling" people, as well as the "things have never been better!" people. We are looking at a house right now here in Rancho that is a bank owned (WMC) property. The comps in the neighborhood are all between 699 and 780k, the note in the subject was at 711. Some people ive talked to in the neighborhood say they bought in the mid 8's. This house is being offered in the mid-high 5's right now because WMC cant dump the thing off their books. We may make offers in the 500k even range plus they pay closing costs. If thats the case then we are essentially 2-250k under what the neighborhood is selling at. (however we would cause the prices to drop).
WOW! ......did someone say 40%;)

Ion
07-26-2007, 04:33 PM
When the stock market is hot, the housing market sucks......when the housing market goes hot the stock market sucks. Look at history for this trend....it's a waiting game now.
If that's true, the fed might be instigating some incentives after today's MEGA-dump!

burtandnancy2
07-26-2007, 06:14 PM
Don't know when all the above was written, but today, Thursday, July 26, all the above observations, predictions, expectations and theories went down the toilet. Its time to start over...

riverracerx
07-26-2007, 07:53 PM
what happened today? I missed the news as I was sitting in meetings ALL day long. :sleeping:

HocusPocus
07-26-2007, 08:08 PM
what happened today? I missed the news as I was sitting in meetings ALL day long. :sleeping:
Wall Street suffered one of its worst losses of 2007 Thursday, leading a global stock market plunge as investors succumbed to months of worry about the mortgage and corporate lending markets. The Dow Jones industrials closed down more than 310 points after earlier skidding nearly 450..
WASHINGTON (AP) — Sales of new homes tumbled in June by the largest amount in five months, provoking new worries on Wall Street about how much the prolonged housing slump will hurt the overall economy.
The Commerce Department reported Thursday that sales of new single-family homes dropped by 6.6 percent last month to a seasonally adjusted annual rate of 834,000 units. The decline was more than triple what had been expected and was the largest percentage drop since sales fell by 12.7 percent in January.
The fall in new home sales was the latest piece of evidence this week of housing's troubles. Sales in the much larger existing home market also fell in June, dropping by 3.8 percent to an annual rate of 5.75 million units, the slowest pace in nearly five years. Also this week, Countrywide Financial, one of the largest mortgage lenders, reported a sharp drop in second-quarter profits. The company said rising default rates were spreading from subprime to more conventional mortgages.
All these developments unnerved Wall Street, where concern is growing that the problems with subprime mortgages could mean more widespread credit problems are ahead. The Dow Jones industrial average plunged by 311.50 points to close at 13,473.57. It was the biggest one-day point loss since the Dow fell 416.02 points on Feb. 27, when a drop in China's Shanghai stock market rattled investors.
Asked about market turmoil, Treasury Secretary Henry Paulson said Thursday it showed investors were reassessing the risks involved in credit markets.
"Whenever we have extended periods of good markets and benign economic situations, there is a tendency for laxness," Paulson said in a Bloomberg television interview. "I do believe this is a wake-up call that lenders need to be very careful when they price risks."
Paulson said he expected the market turmoil will be contained because of the overall strength of the economy. But he said it was his job "to be vigilant and be prepared if and when we have a global financial shock."
Private economists, who noted that it was just last week that the Dow Jones industrial topped a record 14,000, said the string of weak housing figures meant a more sober assessment of economic conditions.
"Investors are re-evaluating the depth and extent of the housing and mortgage market downturn," said Mark Zandi, chief economist at Moody's Economy.com. "Instead of ending soon, the housing market downturn is likely to extend through 2008. That is a shift in thinking."
Analysts also blamed increases in mortgage rates in June for pushing sales lower.
"Home builders continue to trim prices and offer large non-price sales incentives, but many prospective home buyers obviously are reluctant to sign on the bottom line," said David Seiders, chief economist at the National Association of Home Builders.
Sales of new homes are now 22.3 percent below where they were a year ago. Analysts said this slide is likely to continue because of spreading mortgage defaults as borrowers are not able to meet higher payments as their adjustable rate mortgages reset at higher rates.
For June the inventory of unsold new homes was unchanged at 537,000 units, still high by historical standards.
The median price of a new home sold last month dropped to $237,900, down by 2.2 percent from a year ago. The median price is the point where half the homes sold for more and half for less.
By region of the country, new home sales fell by 27.1 percent in the Northeast, 22.5 percent in the West and 17.1 percent in the Midwest. Only the South saw an increase in sales, a gain of 7.6 percent.
In other economic news, the Commerce Department said that orders for big-ticket manufactured products increased by 1.4 percent last month, the best showing since a 5.1 percent increase in March, with the strength coming from a big rebound in orders for commercial aircraft. Demand for many other durable goods products actually fell in June.
Even with the slump in housing, the economy is expected to have staged a solid rebound in the April-June quarter, growing at an annual rate of around 3.2 percent, up from the anemic 0.7 percent growth rate in the first three months of the year. The government planned to release the official figure on Friday.

socalmoney
07-27-2007, 09:08 AM
http://img.timeinc.net/time/daily/2007/0707/calif_real_estate_0726.jpg
http://www.time.com/time/business/article/0,8599,1647607,00.html
Friday, Jul. 27, 2007
By SONJA STEPTOE/LOS ANGELES
If Wall Street wants to get even more worried about the real estate market, it need look no further than southern California. There, the culprits aren't just the bad-credit borrowers whom banks and lenders loaded up with ballooning debt to purchase their dream homes. The well-to-do have partaken of those treacherous loans as well. And now everyone is hard pressed to pay as interest rates rise.
Up to now, the booming housing markets in Los Angeles, San Diego and Orange counties had barely felt the chill that hit Miami and Denver from rising inventories, declining prices and slowing sales. But this week's spate of gloomy housing data included ominous reports from the West Coast. Led by an astonishing 799% rise in Los Angeles County, foreclosures in southern California jumped 725% in the second quarter, to a record 9,504, from 1,152 a year ago. The spectacularly bad trend was coupled with news from mega-mortgage lender Countrywide Financial that homeowners with good credit are starting to fall behind on mortgage payments. It has all contributed to a contagiously pessimistic mood. "We thought the upper end of the market was immune," says Steve Johnson, of real estate consulting firm Metrostudy. "But this is now like Kudzu in the South, spreading into all product types in the southern California housing market."
The statistics show that sub-prime caliber borrowers weren't the only takers for those notorious no-money-down, interest only, adjustable rate mortgages. Purchasers with high credit scores, who could have qualified for the standard 30-year mortgages, were also enticed by the exotic loans because they offered substantial initial tax deductions and freed up cash for other big-ticket purchases. "Why pull your money out of the bank for a down payment when someone is willing to give you all the money and structure payments that initially are significantly lower?" asks Johnson. With home values increasing by double digits annually, "people began buying houses they couldn't afford under the theory that the more house you buy, the more wealth you have once it appreciates," he says. "It's kind of a Ponzi scheme on a mass scale. But there has to be an end at some point."
Bill Santoro, a broker with National Realty Group, has watched the end come for many clients and it isn't pretty. "Once those introductory rates end, all of a sudden between the mortgage, the new car note and the big charge card payments, there's not enough money in the pot," he says. "It throws them into a complete tailspin."
Santoro's territory, known as the Inland Empire, lies some 60 miles east of downtown Los Angeles. When the real estate boom started at the beginning of the decade, the Empire?s Riverside and San Bernardino Counties stood as monuments to the American dream, affordable nesting spots for those priced out of the L.A. market. Migrant Angelenos found bigger homes on bigger lots in brand new subdivisions for as much as $100,000 less. Johnson says that in some of those developments, as many as 80% of the buyers were subprime borrowers and many of them first time homeowners. Consequently, when interest rates started to rise, they were squeezed hard. Now the region is a symbol of the real estate slump.
Foreclosures in San Bernardino shot up 987% to 1,489 in the second quarter. In Riverside they jumped 793% to 2,509. That stock will soon be competing with a 13-month supply of unsold inventory that's already on the market. Santoro is braced for the worst. "There's a tsunami coming and we're going to get slammed," he says. And while economics is always local, economic nervousness can go national — even global — in a matter of hours, as recent financial events have shown.
Could the Inland Empire's contagion debilitate L.A. and areas beyond? So far, property experts are still trying to put a positive spin to it. John Karevoll of DataQuick, a company that compiles real estate information, points out that the Los Angeles County foreclosure figure is still well off that region?s previous peak of 11,494 recorded in the third quarter of 1996, during southern California?s last real estate collapse. And he's encouraged that activity at the very high-end of the L.A. market hasn?t fallen off, that home prices in the county overall continue to rise and that job growth is "pretty good." Still, even he admits that the sub-prime crash has plunged the entire real estate sector into uncharted territory. "Will it create a flood of foreclosures that drags down values in the rest of the market? So far it hasn't but at some point, it might."

socalmoney
07-27-2007, 09:32 AM
I posted a reply and it didn't update last poster info or go back to the top. I have noticed this a lot with Hot Boat lately. TTT damit.

sdpm
07-27-2007, 10:13 AM
I sure hope the bottom falls out and prices drop 40% so that when all the millions of illegals here become Legal, they will be able to afford a home!:jawdrop:

socalmoney
07-27-2007, 10:28 AM
I sure hope the bottom falls out and prices drop 40% so that when all the millions of illegals here become Legal, they will be able to afford a home!:jawdrop:
Maybe all the ones who bought homes will loose their ass and go home. You know it would be a pretty sweet life if they cashed out and took that cash south to live. I bet they would have a much better life with 100k in Mexico than if they were still here.

AirtimeLavey
07-27-2007, 10:40 AM
this is so true
20 some reo's in havasu on the MLS some have been low-balled 5/6 times by the same agent .. the banks arnt sellin nor have they even countered. that is saying somthing..
by the way "AIRTIME "A BIG THANK YOU FOR THE JOB ON THIS ONE http://www.glamisdunes.com/invision/index.php?showtopic=91184&st=0&p=1974078&
HE KNOW'S HOW TO GET IT DONE!!!!!
Just saw this. Thanks B&W for the compliment and the opportunity. That was actually one of the more fun listings to sell. I was particularly happy with how clean the deal went through. Wish they all went that smooth. Hope you are doing well. :D

BEER&WATER
07-27-2007, 11:18 AM
I sure hope the bottom falls out and prices drop 40% so that when all the millions of illegals here become Legal, they will be able to afford a home!:jawdrop:
worst case is you move to havi and let them have it

uLtRADeNniS
07-27-2007, 11:28 AM
Just read that the median price for a house in CA rose 3.2 percent last month to 594,000. Statistics by Cal Assoc of Realtors.
Last year at this time...the median for So cal was $647,000. Same source.

AirtimeLavey
07-27-2007, 11:33 AM
Last year at this time...the median for So cal was $647,000. Same source.
:idea: What source?

sdpm
07-27-2007, 11:39 AM
worst case is you move to havi and let them have it
They damn near have it now!
2 years ago I was looking for a few spec homes for investments in the outlying areas around phoenix and I was told that they must be owner occupied to purchase. Everyone from Calif. was buying everything out there and turning them into rentals. Developers would not have that. I wonder if it is still the same or if you have money they will sell to anyone?

BEER&WATER
07-27-2007, 11:59 AM
They damn near have it now!
2 years ago I was looking for a few spec homes for investments in the outlying areas around phoenix and I was told that they must be owner occupied to purchase. Everyone from Calif. was buying everything out there and turning them into rentals. Developers would not have that. I wonder if it is still the same or if you have money they will sell to anyone?
i wish all the good peps would move to havi /create our own economic with the diversity that socal has..
and leave it behind for the young guns to start there own biz and the rest to battel it out for there pice of the pie

sdpm
07-27-2007, 12:19 PM
i wish all the good peps would move to havi /create our own economic with the diversity that socal has..
and leave it behind for the young guns to start there own biz and the rest to battel it out for there pice of the pie
I don't think it would be good for Havasu. It is pretty busy now. Just think how bad it would be if the population doubled in a short time! That town and it;s streets would be a mess and think what the ramps would be like on the weekends. I say leave it as is.

bigq
07-27-2007, 03:20 PM
:idea: What source?
Its in the original post.
The median price includes high end and low end. I heard the upper end, the million dollar homes have beed going up in price which brings the median up. If you want to really know I think you need to look at a specific range.Don't understand that for sure though.

AirtimeLavey
07-27-2007, 07:11 PM
Its in the original post.
The median price includes high end and low end. I heard the upper end, the million dollar homes have beed going up in price which brings the median up. If you want to really know I think you need to look at a specific range.Don't understand that for sure though.
Median means the point at which there were the same number of homes sold for more as there were that sold for less. It's not an average. That number is higher than I recall, but I'll look again.
Otherwise, spoke to a wealth mgr. today who said the general feeling from the big portfolio mgrs. is that housing values will drop up to 10% and start to rebound in '09. Then heard from an REO (bank owned property) guy who said he heard up to 30% drop in values w/rebound 2-3 years out. All kinds of predictions right now, but I still think 30 -40% is extreme.

Cole
07-27-2007, 07:29 PM
Median means the point at which there were the same number of homes sold for more as there were that sold for less. It's not an average. That number is higher than I recall, but I'll look again.
Otherwise, spoke to a wealth mgr. today who said the general feeling from the big portfolio mgrs. is that housing values will drop up to 10% and start to rebound in '09. Then heard from an REO (bank owned property) guy who said he heard up to 30% drop in values w/rebound 2-3 years out. All kinds of predictions right now, but I still think 30 -40% is extreme.
30-40% is not out of the question....take a 300K home in the IE and knock off 30%....210K :idea: sorry guys.. but its already happened!!!!

AirtimeLavey
07-27-2007, 07:45 PM
30-40% is not out of the question....take a 300K home in the IE and knock off 30%....210K :idea: sorry guys.. but its already happened!!!!
Are you looking at sold price or asking price? i.e. if the house was bought for $300k and then sold for $210k? Then you're right, you lost 30% value. If you're saying homeowner wanted to sell for $300k and couldn't sell until priced at $210k, then that's something different.

2Driver
07-27-2007, 08:04 PM
When the stock market is hot, the housing market sucks......when the housing market goes hot the stock market sucks. .
Not this time. The market's dump was in direct concern over the collapsing housing and lending markets.
In the past investors jumped between investment vehicles but this time the other life raft they would have jumped to has a big hole in it.

Cole
07-27-2007, 08:13 PM
Are you looking at sold price or asking price? i.e. if the house was bought for $300k and then sold for $210k? Then you're right, you lost 30% value. If you're saying homeowner wanted to sell for $300k and couldn't sell until priced at $210k, then that's something different.
I see homes that have appraised for over 300k and now selling for low 200s...
If its not selling... you drop the price 10-20-30%.... isnt that what were talking about?:confused:

4DAY4PLAY
07-27-2007, 08:25 PM
Are you looking at sold price or asking price? i.e. if the house was bought for $300k and then sold for $210k? Then you're right, you lost 30% value. If you're saying homeowner wanted to sell for $300k and couldn't sell until priced at $210k, then that's something different.
I see homes that have appraised for over 300k and now selling for low 200s...
If its not selling... you drop the price 10-20-30%.... isnt that what were talking about?:confused:
No....you have to look at it this way...i bought my home for 250k 5 years ago, a year ago it would have sold easily for 500k...thats a 100% increase in value, today it would probably only go for 425...which is not a loss or decrease in value because i still make 200k off of it...for roughly a 75% profit. Yes its down 75 k or roughly 20% from a year ago, but overall im still way ahead....and personally i hope the market crashes 50% cause i would never sell this house im in...i would rent it out for positive cash flow to one of the many families who lost thier house....and then i would buy another at a discounted price....that my friend is how people make $$$ in real estate, but you muct be patient, and have the cash when the time is right, that is why i have liquidated everything this past year...a boat, 2 trailers, & 5 motorcycles.

AirtimeLavey
07-27-2007, 08:26 PM
Are you looking at sold price or asking price? i.e. if the house was bought for $300k and then sold for $210k? Then you're right, you lost 30% value. If you're saying homeowner wanted to sell for $300k and couldn't sell until priced at $210k, then that's something different.
I see homes that have appraised for over 300k and now selling for low 200s...
If its not selling... you drop the price 10-20-30%.... isnt that what were talking about?:confused:
Well, the difference I see is that most sellers have an opinion on what their house is worth, whether that's based on what they "need" in order to pay of debt or what they think they deserve because of all the work they put in, or what they heard their friends house sold for in another neighborhood. People come up with all kinds of ways to value or price their houses.
Another example is Zillow.com. Many people like that website and think it's reliable for setting a price or value. I've seen examples where they were off a good $100k.
This was in regards to Cole's post. Don't know wtf happened or how I quoted myself.
Many times people don't initially set their price by the current market comparables. So, you see houses priced too high in many cases. Sure the realtor should have a lot of input and help prevent an over-pricing, but in the end it's the seller who sets the price.
I have not yet seen a situation where an appraisal has come in at $300k last year, and a current appraisal is now down to low $200s. Appraisal to appraisal that would be a loss. Haven't seen it yet. Hope not to, but in certain areas (San Berdo, Riverside, and Riverside Co., you may see it at some point). If anything, it's an area by area issue.
The current market is unsettling for sure, but not yet catastrophic.

Cole
07-27-2007, 08:53 PM
[QUOTE=Cole;2697641]
No....you have to look at it this way...i bought my home for 250k 5 years ago, a year ago it would have sold easily for 500k...thats a 100% increase in value, today it would probably only go for 425...which is not a loss or decrease in value because i still make 200k off of it...for roughly a 75% profit. Yes its down 75 k or roughly 20% from a year ago, but overall im still way ahead....and personally i hope the market crashes 50% cause i would never sell this house im in...i would rent it out for positive cash flow to one of the many families who lost thier house....and then i would buy another at a discounted price....that my friend is how people make $$$ in real estate, but you muct be patient, and have the cash when the time is right, that is why i have liquidated everything this past year...a boat, 2 trailers, & 5 motorcycles.
You are 100% right!
This is how you make money...you bought years ago and have made a handsome profit...however if you had bought the same property a year ago at 500-600K and now its worth 425K, we might be having a different conversation....

AirtimeLavey
07-27-2007, 08:57 PM
[QUOTE=4DAY4PLAY;2697653]
You are 100% right!
This is how you make money...you bought years ago and have made a handsome profit...however if you had bought the same property a year ago at 500-600K and now its worth 425K, we might be having a different conversation....
The only place I've seen anything close to this is if you bought in a new tract. And even then, I haven't seen that big of a drop. I have seen the builders undercut people who had bought the year before, when they (the builders) are trying to sell off the last phases.
But what you say is why it's a tough time to buy for the short term. Long term has always performed.
Again, trying to quote Cole, but don't know wtf is happening to the post.

bigq
07-28-2007, 08:01 AM
Not this time. The market's dump was in direct concern over the collapsing housing and lending markets.
In the past investors jumped between investment vehicles but this time the other life raft they would have jumped to has a big hole in it.
This is why I would guess the stock market and the economy as a whole is going to be tied to the housing market. It shows the GDP with and without mortgage equity withdrawal (MEW). Guess what happens when equity goes away:eek:
http://bigpicture.typepad.com/photos/uncategorized/2007/04/10/gdp_wo_mew.png