Posted on 12/28/2007 12:09:11 PM PST by shrinkermd
Bought mine in 1998, re-fi’d three times at lower rates. 15 yr at 4.875% with 9 years left won’t hurt me. If prices go down 25%, will still be up 75k on what I paid.
I have fought the raises each time (taxes are based upon such appraisals) and have won some/lost some and usually split the difference.
I'll have lots more ammunition in my arguments based upon falling prices, foreclosures and stagnant real estate sales.
Good news? Bad news? Medium news?
Prices must and will fall. Everywhere. Probably 25% to 30% from their peak.
This would be true were there no demand for new construction, which can't be built for the price to which they would love the market to fall. What the LA Slimes doesn't tell you is the degree to which the regulatory government of which they are so enamored has driven construction costs that high.
A typical building permit in my county now costs over $50,000 alone, never mind the interest cost while obtaining it, which can take easily over a year and often two. Paying for those two costs is well over a third the cost of the house over the lifetime of the mortgage. IOW if we got leftists like the Times out of the way, the bubble would never have happened.
Could anyone really afford their first house and furniture at the same time? I couldn’t. Now my mortgage payment is equal to my car payment. I don’t know what my house is worth and neither will anyone else until my wife and I are gone and it gets sold.
The problem is with speculators. The housing bubble was basically a ponzi scheme. Those that flipped early and often made tons of money. The ones that got in late took it in the shorts. Mortgage companies jumped in with both feet using the inflated values of the homes as the assessed value. My brother made money and lost money. One of his lawyer buddies put 10% down on 10 $1,000,000 condos in Florida (new construction). He just walked away and let the bank take them back. That’s the problem. This was NEW construction based, not on the demand for housing, but pure speculation. It will take 10 buyers to purchase the units that this bozo ordered. He lost a ton. The bank lost a ton, but the builder made a fortune. Money doesn’t disappear. It just moves around.
About time reality caught up with the housing market
Just keep the government out and let it adjust itself
No it wasn't. A rising market creates speculators, not the other way around.
Based on what is this assumption reasonable? 5% tail of the market does not wag the 95% of the dog
Meanwhile in many areas, the housing inflation continues at a rate near 5%.
I love these guys who tell stuff 9 months to a year AFTER it's already happened.
That’s not how markets correct.
People were saying all sorts of “the market should correct to X level” after the end of 2000 and equities started selling off. They were mostly wrong.
Markets are most irrational at their tops and bottoms. They invariably become absurdly over and under valued at the extremes of market sentiment.
We’re no where close to a bottom on the real estate market(s) yet, ie, the market sentiment has not reached a negative enough level. When the “conventional wisdom” becomes “the smart people always rent their housing” and “only idiots buy real estate” - then we’ll be close to a bottom.
There is one more aspect of real estate markets that many people overlook: at some point, downturns in specific real estate markets become their own problem. When enough houses are sitting empty in a real estate development, crime rates go up, vandalism may start to become an issue and lenders become very nervous about writing mortgages in those neighborhoods, which further exacerbates the problem and forestalls recovery of prices.
I want to know when mortgage rates will go down. They’ve been around 6% for a while now. When will the rate cuts affect mortgage rates?
FL and AZ are getting creamed.
Pass a law that says that, henceforth, you can only own one home at a time. What would happen? Homes would appreciate with population growth and money supply
Besides, rising and falling markets reflect organic supply and demand. Speculation is gambling and it continues until the money runs out (usually borrowed money). Speculation is the cause of all economic bubbles. They pop when the money stops.
It’s not so much the mortgage payments, I’m paying $1000 a MONTH just for insurance and property taxes!
Now that’s a market that desperately needs correction- and it probably won’t happen. Thieves.
All I hear from these doomsayers is blah, blah, blah, blah, and more blah, blah, blah, blah.....
Dog goneit...this story is so very tired.
Not in E. Texas, either. Always could buy a very nice house reasonably here....didn’t soar, so it isn’t tanking.
Hank
I live in “flyover country” too. We bought this house 15 years ago and about 5 years ago paid off the mortgage. Now we are thinking of moving to a different “flyover state”.
I am considering putting a price on my house and letting it sit until I get my price for it. I would go ahead and buy my new house, again, possibly paying cash for it.
I have a son who lives near me and could take care of this house for me while I live in another one. The only disadvantages I can see would be real estate tax and insurance would still have to be paid. $800 tax and about $600 insurance. If it never sold I wouldn’t be bothered too much as my kids would inherit it.
It sounds like the best of both worlds to me - buy low and sell if and when the market is up again but I’m sure that someone will be along shortly to tell me why my plan is full of holes.
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