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130 Comments
- phishneslo, on 10/24/2008, -0/+45good. i am sick of these shows on tv about flipping houses for profit...
- parisii, on 10/24/2008, -1/+30I had friends who moved to SFran and the phrase there (a decade ago) was "house poor," because houses were so outrageously expensive, people who bought were using more than the normal percentage of income on housing. But of course, the housing market kept going up, values kept going up so people felt like they were doing the right thing to buy rather than rent - that's been the conventional wisdom for decades... if you're going to live somewhere for more than a couple of years, buy.
The area needs a downward and more realistic adjustment in prices, but this is certainly a horrible way for it to happen.
The credit card debt mess is the next house of cards to fall.
We are no where near the bottom of this crash. - spaceman84, on 10/24/2008, -0/+26Well, first the subprime loans got adjusted, now it's time for all of the ARM loans to reset. And there were a LOT more ARM loans issued than subprime loans, so the second wave of foreclosures is going to be even bigger than the first, exacerbated by increasing unemployment.
- firebirdx01, on 10/24/2008, -0/+22This is actually good for California I think- homes there are obscenely priced compared to other places- and it's about time for the housing bubble there to burst so that prices can fall a to some more normal levels.
- Bisquick, on 10/24/2008, -1/+20Man, it is a good time in history to be a broke student.
- tacobueno, on 10/24/2008, -1/+19The question is, when is rock bottom so i can buy one cheap?
- username7410, on 10/24/2008, -1/+16Zombies actually.
- ScottMitchell, on 10/24/2008, -0/+14We need these foreclosures to hasten the return of house prices to their historical norms.
Because everyone needs a place to live, high house prices are a detriment to society. Imagine if food prices increased at 15-25% per year for several years in a row - there would be rioting in the streets. But when house prices did the same thing we had all these people telling us how great this rise in prices was.
I own a home in a neighborhood that has seen drastic price increases this decade. And I want prices to return to sustainable levels, levels where middle class families that start raising families can afford to stay in this neighborhood, rather than be forced to choose between moving far inland or going deeply into debt. - fugazied, on 10/24/2008, -0/+12Yeap that was huge in Australia over the last few years. People moving into crappy houses, rennovating with some campy guy in charge, and then auctioning the property for 40% more than they paid for it. Over here we still have the situation where to buy the average suburban house you MUST have 2 incomes or you have to be earning over 100k yourself. I don't earn that much and unless this crash fixes house prices so they are affordable to the person with the average wage, I'll never own a home.
- inactive, on 10/24/2008, -0/+12Depends on your market.
- kazamx, on 10/24/2008, -0/+11In the UK all those shows are now carrying a disclaimer at the start saying "This show was recorded in the spring of 2007 and may not reflect the current market"
I can't wait until the follow up shows where they go back and look at people who they met in earlier episodes, should make for a laugh. - collution, on 10/24/2008, -1/+12^Then a holy war: Christians vs. Gays vs. Jews
- ScottMitchell, on 10/24/2008, -0/+11There's a ***** of Option ARM mortgages that are going to reset between 2010 and 2012, and Alt-A mortgages are up there, too. You can see a fancy graph of mortgage rate reset amounts over the next decade at:
http://bp3.blogger.com/_pMscxxELHEg/RxzD0s_7EYI/AA ...
The good news is that the amount of resets dollar-wise declines sharply starting 2012. In short, don't expect house prices to go up between now and 2012. They will come down further, but how long it will take to bottom out depends on how much Washington DC interferes with the marketplace. - gobbleplex, on 10/24/2008, -0/+11About a year ago, I looked at the available data on median home price and median income in the state of California. The median home price was aproximately 950% of the median annual income. I cannot have been the only one to do this. Didn't anyone see a train wreck on the horizon in this situation?
- Olfster, on 10/24/2008, -0/+10The unemployment is going to turn this from really bad to OMFG bad. There are alot of people that did not participate in this raping of the economy and played by the book, that are now losing their jobs. No job no ability to pay their mortgage even if they paid their 20% down and only have 10 years left on their 30 year fixed. Very nasty situation on the horizon.
- mobislink, on 10/24/2008, -0/+9 500 square feet and was built at the end of the Great Depression in 1939.
Sale History
07/21/2008: $235,060 *
09/27/2007: $340,000
http://tinyurl.com/67eml8
Did I mention it is in Compton? - mobislink, on 10/24/2008, -0/+8A lot of home owners/sellers are in denial or think the housing market will rebound in a year. Let reality set in and the you will see some good deals. There are a lot of newly built houses sitting empty here in MN just 20 minutes north of the city. They need to be winterized and maintained. Once desperation sets in it will be time to buy.
- Bamboozled, on 10/24/2008, -1/+9I live in San Diego and our house is set for foreclosure by April. They told us not to pay our mortgage until around December because the government may lower the size of the mortgage to the actual value of the home now. It's strange though because a lot of home owners are not paying their mortgage and just waiting also. It seems like that would be very bad for the economy.
- brandita, on 10/24/2008, -4/+12First the wildfires, now the foreclosures are out to get us. What's next an earthquake?
- bjornski, on 10/24/2008, -0/+8Link?
- inactive, on 10/24/2008, -0/+7My Finance professor(PhD from Harvard) told me "That is one million dollar question. People who know answer will make a lot of money."
- SillyRabbits, on 10/24/2008, -0/+7I'm pretty sure the California bottom hasn't happened yet. Depending on how deep the recession is, prices could still fall significantly lower.
- Olfster, on 10/24/2008, -0/+7There are way too many people still in denial. Prices still have alot further to come down. These banks need to start the fire sale ( no pun intended) already and stop listening to realtors that have no clue on how to price a house in this environment. My partner says that it is because they can't afford to reduce the price given the size of the mortgage. I agree to a point but the prices still seem ridiculous. California isn't the only place still to get a very rude awakening. In the midwest people still think their home is worth a ton of money. I feel very sorry for people that have to sell and can't take the hit. Only going to get worse now that jobs are being lost by the hundreds of thousands. The big pinch is on the horizon.
- SillyRabbits, on 10/24/2008, -0/+7Umm, no. For California, the land value/cost is what was expensive. That's why you had 1 bed / 1 bath ratholes in Compton going for $600k+, homes that would sell for $25k in some parts of the country.
- qazz, on 10/24/2008, -0/+7What a moral disgrace. I am sure there are a lot of Californians who think they should steal money out of the pockets of responsible tax payers, is the right thing to do.
- kazamx, on 10/24/2008, -1/+8Its all fun and games until someone gets a skyscraper in the eye
- Olfster, on 10/24/2008, -1/+7I agree, but now we have a new storm on the horizon, unemployment. The next waves are going to be people that have not over extended, but are now losing their jobs. This is going to get scary real quick unless something is done to float this economy.
- kazamx, on 10/24/2008, -0/+6The bottom is years away yet.
In the UK we are currently down 14% but expected to drop over 35% before things steady down. - inactive, on 12/08/2008, -0/+6There's a reason that these mortgage companies are being called "predatory". They took advantage people, relying on they their ignorance and deliberately misleading them about the terms of the loan so they could make a quick buck. Hell, even Alan Greenspan is blaming the lenders. Why are you so quick to condemn the poor?
- insanebrain, on 10/24/2008, -0/+6Yes.
- collution, on 10/24/2008, -1/+7^ Then a tsunami sneak attack
- RawCoyote, on 10/24/2008, -3/+9They need to start building smaller, more affordable houses and get away from the McMansion mentality that bigger is better.
One reason house prices got way out of whack of average incomes because people were persuaded to want bigger and bigger houses with granite counter tops in all stainless chefs kitchens, Jacuzzi tubs, soaring vaulted ceilings, 3 car garages, etc., etc. because this somehow was construed as a measure of your success, when all it turned out to be for many was a golden cage. - inactive, on 10/24/2008, -1/+7Help us Really Really Big Man!
- davewelsh79, on 10/24/2008, -0/+5When rents are higher than mortgage payments once again.
Rent has to be more expensive than mortgage payments, plus property taxes, plus upkeep/condo fees. Then housing is "affordable." Otherwise you should keep renting indefinitely--you'll come out ahead by investing that money rather than wasting it on a house. - spudhead, on 10/24/2008, -1/+6Your post is spot on.
Blaming the buyer for their greed and ignorance is only part of the picture, but it allows one to feel superior for not making that mistake or as in many cases, having that misfortune. - collution, on 10/24/2008, -1/+6^Then bear brigades will attack your major cities
- rwongphoto, on 10/24/2008, -0/+5Personally I wouldn't mind seeing the home values fall even further w/o govt intervention. The prices are just too unrealistic to sustain a well-balanced economic system here. If people are spending 40 - 60% of their income just on mortgage / rent that is too much. What about quality of life?
- SillyRabbits, on 10/24/2008, -0/+5I wonder how many of these are primary residences and how many are 'investment' properties.
- collution, on 10/24/2008, -1/+6^Did I forget volcanoes?
- DrVic, on 10/24/2008, -0/+5Your finance Prof talks like Mr. Miyagi?
- Olfster, on 10/24/2008, -0/+5What is the normal level. No one in their right mind will buy until this is known and banks don't want to lend until this is known. At least not unless it is reduced so much as to make it a no brainer.
- inactive, on 12/08/2008, -3/+8On a side note, after reading all the comments here and elsewhere about how these foreclosures are the fault of the buyers, rather than predatory lending practices, I have to wonder if it's some kind of projection.
Admitting that the buyers were actually conned by the lenders would mean that it could happen to anyone. By blaming the buyer for being stupid or greedy, the person placing the blame gets to stay in "it can't happen to me" world. I could be wrong, but I've seen this kind of attitude toward the homeless, and I suspect it applies here, too. - govsucks, on 10/24/2008, -0/+4Let me tell you about the backlash that poor and minority people wanting to buy a house will face after this fiasco between government, "community organizers" and banks that thought they had government paid suckers to use up.
If you wanna buy a home in the future, you better have some things called responsibility and income. - edstate, on 10/24/2008, -0/+4Yes. They can rent.
They made a bad decision. They'll lose some money. Their credit will take a hit. But that's the way things work.
You're welcome. - TheInformer, on 10/24/2008, -0/+4California probably has the highest number of mortgages that were issued to people that weren't qualified to have them, i.e. they couldn't pay the mortgages back.
Now there are foreclosures. I'm shocked. - inactive, on 10/24/2008, -1/+5Well right now im a broke ass who got laid off,sucks for me.
- mugupo, on 10/24/2008, -0/+4Well depend where you live in California, cause where I live most home price had not drop for 2 years. I try to buy a home in bargain price, and there 80 bids... there's pretty of buyer out there, but they wanted the best deal and location they can get.
- inactive, on 10/24/2008, -5/+9Ok please tell me if I am wrong, but it is homeowners responsibility to read all agreements and make sure they can pay off mortgage. If they cannot => their fault.
And we have another group of greedy homeowners. They thought they could outsmart market by taking sub-prime mortgage, paying like $800 a month for three years and then selling house and making easy $$$. Well the market just ***** them. - inactive, on 10/24/2008, -0/+4You are wrong. The majority of defaults aren't people buying homes for speculation, but as primary residences. The loan terms and agreements don't spell out the consequences of interest rates nor can they predict the future appreciation of homes. During the real estate boom loan originators were spouting crazy growth estimates and tossing out 150% equity loans like candy.
Turns out you can only refinance up to the equity of the home, bet you the guy making the commission on 150% loan didn't tell you that. - Olfster, on 10/24/2008, -0/+4They are not the only culprits though. There is a paper trail leading from the home owner who falsified his application to the mortgage broker who just fudged the numbers to the bank that used only appraisers that helped them move a mortgage to the investment firms that bundled them for sale as securities. The paper trail is there and they all need to be made to pay the price if they dropped the ball. Indentured servitude anyone?
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