Posted on 09/05/2010 1:01:21 AM PDT by Chet 99
You can't force someone to buy a house.
But as a society we've long tried to make homeownership an offer you couldn't refuse.
And since the real estate mega-bubble burst three years ago, the government has tried even more tricks to get people to sign home purchase contracts.
Now, a grim reality has set in: Despite the still-rich basket of tax breaks for residential property owners, and the lowest mortgage rates in a generation, the pool of willing or able buyers is dwindling.
(Excerpt) Read more at latimes.com ...
$50,000? Then throw in taxes, insurance etc.....
Considering that, I'd say most homes are a bargain.
And the Democrats (read: Fwank, Meeks, Dodd, Waters, et al.) somehow found the "right to affordable housing" enshrined in the Constitution.
Of course, their spin was that housing wasn't affordable because of the high interest rates being charged to people who had a history of not paying their debts.
The answer? Drive lenders into making loans to people who had histories of not paying debts, so those people could buy houses that they couldn't afford.
The result? Lenders created the loans, PLUS ways to get out of being stuck with them.
And eventually, the house of cards came crashing down.
What always gives me a kick is the TV ads which spout, “Get the car you DESERVE!” or, “Get the job/salary you DESERVE!” Nobody ever told me I deserved anything. Actually, they told me to work really hard, and if I don’t get what I want in terms of salary, perks, etc., to stuff it. I turned out OK anyway. :)
No! Let's continue to make one segment of populace pay for the gains of another...after all, we all know that unless we have government mucking around and twisting up every component of our economy, we would have to make decisions based on the market and not just be led around like sheep to do what the State wants! How horrid! </sarc>
Of course, if we didn’t keep propping up home prices, then more people could legitimately afford one.
Only sellers can bring the price down.
I’m in that underwater boat right now. I’ve been trying for years to sell the house in Dallas where we used to live, but can’t get any offers, even for the remaining amount of the mortgage. And we didn’t buy a wildly overpriced house we couldn’t afford. A few years ago, it was appraised at $371K, and the mortgage is only $248K. We just have three problems:
1. Property values were undermined by both the economic slump and the city suddenly revoking our block’s provisional historic district protection, which killed everyone’s property values (this was at the behest of a little weasel neighbor who had pull at our endlessly corrupt city hall).
2. We were advised that our house would sell better if we were not living in it, so we cashed in our stocks (just in time, actually), bought another house as a bank repo, and moved. It still didn’t sell, so we finally had to rent it. But now we can’t refinance the loan to get the rate down because it’s no longer our “primary residence.” It’s now considered an investment property, and God forbid that the laws help any rich businessmen like me.
3. No matter how hard it was at times, we actually pay our mortgage, so the bank (Citimortgage) won’t deal with us. After taking tens of billions of our tax money to bail themselves out, they won’t help homeowners refinance unless they’re at least three payments behind.
So to sum up, I’m stuck with a house I can’t sell or refinance because incompetent crooks in governments both federal and local have killed property values while the banks are punishing us for being responsible.
BTW, just got notice that the renters are moving out this month, so there’s another $2000 a month hit on our income.
The real problem is NOT home prices; it is the ability to pay the loan. Congress exceeded their powers in regulating housing; they should be in prison. Banks were criminally negligent in approving the loans; let them eat the losses. Borrowers who KNOWINGLY committed fraud in overstating their finances deserve no mercy.
Why should someone who doesn’t pay benefit from debt reduction while those who pay get nothing? Anybody heard of equal protection?
With 800 banks on the edge of folding who wants to take out a home loan,your first notice from bank oh by the your loan is now under new management.
Only sellers can bring the price down;
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Not even then. I have been trying to sell one for over two years with no success. It is way down in price now. Nothing is moving.
Too true.
Home prices inflated by a supply/demand curve which has been distorted by extra-market demand pressures, which are the result of too-readily available financing.
I genuinely wish the government would spend as much time and effort in working out how to prevent people who are dishonest, incompetent, and/or worthless from benefitting as they seem to spend in finding ways to make hard-working citizens pay for those benefits.
Sounds like Phoenix AZ
The Dems screwing with who should own a home put us in the mess we're in right now.
Sound like most of the Country.
Maybe an interesting observation.....The one place I’ve heard housing demand has picked up.......Washington DC (area).
..... there’s another $2000 a month hit on our income.
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Why are you taking on the banks burden? Isn’t the house colatteral for the loan? You could simply walk if you like. Do you know FOR A FACT that you even owe the mortgage... most loans made in the last 12 years or so are unenforceable as the mortgage and the note were split apart... The banks kept transferring one half but not both as one... add to that that the servicer is co-mingling funds in violation of the law and with a good attorney you can hold onto this assett, probably paying on a yearly basis no more than you are paying per month now. If you do a records search and find M.E.R.S. is involved I’d stop paying yesterday ,, they were/are an illegal and illigitimate attempt by wall street banks to hide money from local recording agencies and to enable their corruption. MERS linked mortgages cannot be foreclosed in Florida... banned
Get mad and get fighting.. start at http://livinglies.wordpress.com/ we cannot resolve the economic mess until we root out the corruption and make the guilty parties feel the pain they have successfully shifted onto us.
“nothing is moving”
Like the rabbit having just noticed a mountain lion.
Pretty much. I had one good contract, and the buyer suddenly got cold feet and bolted.
Just as with business building, hiring or any risk, no one is going to twitch when all laws, contracts and rights are subject to random and capricious nullification, penalty or taxation.
Look at the bright side - 20 years from now, that rental house may BE your retirement income.
...”Well, there is one: Leave housing to market forces, let prices fall until buyers are motivated to come in, and hope that the economy can stand one final cathartic wave to clear the excesses of the bubble”...
Market forces should have been allowed to work a long time ago. It is past time to stop the bail-outs and the hand-outs. We need to bear the consequences for what we have done to our children’s future through our stupid decisions at the ballot box. If this does not happen now, they will be paying for it a generation or two down the road, if, indeed, they have a free country to live in by that time.
Redistribution of wealth..It is nothing short of politically motivated confiscation of wealth from people who have worked and earned it and then, giving it to people who have not, and in some cases, will not qualify for such handouts. The only qualification? Why, votes for leftists, of course.
In my area of NY, it’s not the house prices, it the taxes. To by and average new house, the taxes are between $6800 and $10000 per year. When you get your house paid off, you still have to pay a huge amount to the state. This is foolish and killing the house market here.
Gee, what a novel idea.
All of the real estate commercial as well as residential will get absorbed by the market over time.
There will be millions lost and won as trhe market re-establishes prices for all goods and services.
It's going to hurt like sin, but it is necessary.
That's after tax dollars, try $75,000 or more pre tax!
“Considering that, I’d say most homes are a bargain.”
Maybe pickup trucks are overpriced?
Amen, no matter how hard the govt tries to “save us” the price of homes will eventually fall to the point that the average family can afford the average home. and the sooner this happens the better.
You've been sold a bill of goods - probably by a Californian, where you actually can do that (there are a few other single cause of action states as well). Don't be dispensing legal advice on subjects on which you are misinformed.
most loans made in the last 12 years or so are unenforceable as the mortgage
You have been badly misinformed. A few lazy lawyers have gotten their clients burned by showing up with inadequate documentation (or, in Florida, just making it up). Texas is a non-judicial foreclosure state - no judge to look at the documents unless the borrower goes to the expense to initiate a lawsuit.
HHFi - Someone gave you some generally bad advice there. I'd suggest discounting anything further from that source. Were they thinking that it should go as a teardown for a McMansion? (That would also explain someone wanting to kill the historic district). The teardown market has weakened more than most in Dallas.
De-junking is a must, but furnished almost always sells more easily than empty.
I suspect that if you look at the price of the lowest cost pickup trucks then houses are as large a multiple of the price of a pickup truck as was true fifty years ago. Of course those super models were not available back then to compare.
The real question is how do home prices compare to incomes. When I was young most people figured two years income was plenty to pay for a house. I don’t think loans were made for a multiple much higher than that in normal circumstances. How many people now can buy a house with two years income? Three years or so ago there were comments on FR to the effect that five or six times annual income was a “normal” multiple.
So the renters were paying at least 10% of the value of the house per year? Are they perhaps moving because the rent was too high for the market?
Seen the prices of tractors or boats, or a new kitchen?
lol....
Unless you are in inner city Detroit, there is always a price at which someone will buy. You are probably unrealistic in your pricing.
For the comparison I was making the closest match in size would be something like a new Ranger, even though the cheapest would be a luxury model compared to the old F-1. List price starts at under $18000. for that one.
PAR35,
Before you claim to have superior knowledge I’ll just say lets give this a year and see how it turns out... I have the facts on my side and in the states that are ahead of the curve (as you mentioned ,, Florida) it is becoming apparent how the score is going to end up. The wall street banks created a kluge that is unenforceable... and they are about to have their heads handed to them on a silver platter by the actual real money lenders as they are just now gaining control of the trusts and servicing. Wall Street can no longer block discovery as they have in the courts, The people they wanted to keep in the dark now have the books.
HHfi , Do your own research.
And people bitch about the price of homes?
I am putting it back on the market Tuesday. The initial asking price will reflect a 25 - 30% loss.
I think my agent was not very effective too.
We shall see.
Actually, $2,000 a month for a four-bedroom, beautifully-restored historic home in that area is a good deal. The ratio of rent to asking price is not because the rent is too high but because we’ve already paid off a large part of the mortgage and were offering it to the current renters for the remaining mortgage balance just to unload it with as little trouble as possible and move on. The major trouble with selling it isn’t the quality of the house, but the loss of historic district protection on that one block.
The good news is that I’m making decent money in other areas, so there’s no danger of defaulting on the loan. I’ll just keep paying it until I get other renters into it, and maybe the price will come back up someday and I can sell it and get some of my money back. That will, however, require federal and local governments to stop being run by corrupt idiots, so who knows if that day will ever arrive.
And you let him or her get away with it without any consequences? That's your fault.
Ah....Government does it again. It's a harsh lesson but one that hopefully you'll never forget. What Government giveth, Government can taketh away.
And your secret for fighting city hall would be...?
elections....shhhhh don't tell anybody
Bring a flamethrower?
Nobody owns a house anymore. We just rent them from the school district.
Sad but true.
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