Posted on 10/28/2007 4:14:43 AM PDT by Jacquerie
I bought my home last February and only wish I had waited to buy. I had a lease that was up on my apartment and I didn’t want to stay another year or move into a cheaper place because I wanted to own. I bought a 50+ year old Cape Cod in a neighborhood I grew up in as a child and always wanted to return to. After almost 20 grand in repairs (flooded basement that had to be repaired by a basement foundation company, new flooring, new walls, backed up drains, painting, etc. plus problems in other parts of the house), I could have spent that money and bought a newer home for a higher price. But, I didn’t know the repairs were to occur, obviously, and only hope some of the money I put in will pay off at the end. Had I waited, I could have moved into a newer, nicer place without the hassles of an older home. BUT, it’s my very first place so I’m learning and am just darn happy to be away from apartment living.
The reference is to the massive housing bubble. The question is when will the bottom hit on house depreciation from peak, when will home inventories stop skyrocketing and when will home sales recover.
Why are insurance costs the result of the government?
Are you just complaining that the taxpayers in the rest of the country are not subsidizing your insurance costs?
If you want to live where there is a good chance of hurricanes, your insurance should reflect that cost.
I have been through 3 of these events....and they are all similar...the smart-BUYERS buy low and sell high....the others are the "suckers" that buy high and panic and sell low....
The really smart home owners BUY and HOLD in a great location.....and do NOT look to housing as an investment.....
There has been long term damage inflicted to the banking sector in the US and Europe, and to the dollar. It will take least a generation to restore confidence until then credit conditions will remain tight.
Real estate is reverting to its long term trend, ie as housing not investment.
It will destroy the hopes of a generation who must be weaned from their twisted illusions about money and credit.
BUMP
Because the state government wouldn't let the insurance companies charge what they wanted to for wind coverage. In their foolish, populist wisdom, the state took over wind risk by instituting an insurance pool. As far as I know, there is no private wind insurance in FL.
Caipirabob merely stated facts. You chose to misinterpret them and jump to conclusions.
Yep. Nothing wrong with buying rental property. But the idea that a person puts everything they have in a home as an "investment" is just wacky. An investment is something that you can liquidate when the market dictates. Not your primary residence.
Because the 'regulation' of the insurance industry through government agencies it's captured lets it fix prices and prohibit competition.
They are available around here (northern VA)
There's some evidence that the jumbo market is slowly returning, but it's not functioning normally yet.
If by normally they mean allowing inflated appraisals for overpriced properties, then it will never again be normal, nor should it. The jumbo market is an artificial construct and in some places jumbos have lower risk than conforming loans in others.
Absolutely...and "dictates" seems to be the stumbling point....
The market dictates a SELL when a stock that produces no dividend nor splits but has appreciated to ones objective....or depreciated to ones limits.
Housing is a roof and a place to raise a family, pets and create memories...unless it's rental property which I avoid like the plague....unless it is multifamily and managed by a professional property management company giving me limited liability....and absolutely no midnight calls to unstop toilets.....
Well it looks like they were trying to outsmart the market, because they did not like what the private companies were charging too much. It still results is an attempt to shift the risk of living in a hurricane zone to those who don't.
The higher risk of living in parts of Florida needs to be born only by those living there or with those living in other hurricane zones. I dont see why housing costs in Florida should not reflect the high risk of being there.
There is no problem in the housing market. There was never a problem with mortgages or housing.
Sincerely,
Toddsterpatriot
I’m an optimist that says we’re still a year away!
Lay the run up in real estate over the chart for stocks back in 2000 and it will be identical. Took several years of recovery for the stock market, as things were priced too high for their real value. Same w/ real estate. Pricing is ridiculous.
On the beach in Florida (oceanfront single family) they are still in the $1500-$2000 per square foot range. Until they get realistic and cut that in half MINIMUM, you’re going to see a real lag in sales.
Now letting insurance companies of of the regulatory hook sounds good, do you think they would ever pay another claim? They are the masters of the fine print.
The reason houses are still going up, for the most part, is that the builders have already secured the loans and pulled their developer’s fees out.
The builders and bankers were clearly bamboozled in this last frenzy, into thinking that these were REAL buyers, when in fact, they were phantoms.
So, the majority of homes, imo, going into foreclosure are not primary residences. They are homes speculators bought thinking they’d make a killing on flipping it. And the builders bought into it.
Since the market was overinflated it didn’t take a genius to see a downturn was coming. And I’m not a genius concerning the housing market...or any market. But it makes me shake my head to read the doom and gloomers predictions of utter catastrophe because of the dip. Yes folks, we’re doomed...no doubt about it. We’ll all be living in tarpaper shacks and holes in the side of the road. No one is ever going to buy or sell a house again. None will ever be built anymore. Get out your tin cup, and practice your begging techniques.(smirk)
“Why are insurance costs the result of the government?
Are you just complaining that the taxpayers in the rest of the country are not subsidizing your insurance costs?”
They are the problem of the FLA govt because past commissioners allowed the insurance companies to set up “of Florida” corporations and then plead poor. Taxpayers in the rest of the country are not subsidizing. If they are, its because ins. co’s are ripping them off but the ultimate blame is past Fl govt.
A self-feeding deflation would require banks and brokers stopping their lending which they are not. There is tightening in subprime as there should be, but people who have the income to support a loan can get one. The problem is really in the investment (i.e. speculative) property market.
I looked at sales of townhouses in Springfield VA and saw a slow market through last year in the low 400's, tending towards 400. Early this year some banks unloaded their TH's at less than 300k. This fact has not affected current asking prices (still in the low 400's). Most buyers will still pay 400 even though they could get a wreck for 100k less. The banks aren't happy about the sitution, but they can write off the losses for now (which is obviously what they are doing looking at the headlines).
Currently a massive credit bubble is unwinding, and the house price deflation is just a side effect of that. The Fed will try to keep the credit bubble pumped up as long as possible and credit market losses and writeoffs need not be deflationary.
As for a housing led recession?
Possible but other sectors can also pick up the slack. The banks and builders are laying off, but the R/E agents and remodelers are mostly self-employed and aren't as easy to track. But for now around here (northern VA) they still appear to have plenty of work.
So there is a law that could be passed, that would lower the cost of home insurance in Florida, and they are just refusing to pass it because...?
I dont get it. Would private insurance companies go in and insure a house against a hurricane for less than they are charging now, and the State will not let them? Sounds crazy.
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