i don''t see anything wrong with housing price going down...

[Allisonfaye]

Date: 3/11/2009 2:34:34 PM
Author: Beacon
Interesting article.

The last guy, the one in Dallas brings up an interesting point. He mentions that a house went to foreclosure near him, sold for a low price, so he figures he is underwater. He probably is.

But is it wise to ''mark to market'' your home at distress sale comps? This is forced selling and there are few buyers. Of course prices are low!

So is it good to just ''sell at the bottom'' by walking away? Probably not.

I can see the future articles talking about Mr. Average guy who made himself a millionaire with things like, ''hey can you believe I bought this thing for 85K in 2009?''

We all know those articles are out there waiting to be written in our future!

Sometimes I think about all the books and articles that will be written on the economics of this time.

 

[Beacon]

I just watched Obama make a speech to the Business Roundtable. Very good speech. One thing came out: apparently he wants to make the capital gains rate zero for small businesses and startups. ( I swear I heard him say that

)

Hello! I live in the SF Bay area literally surrounded by every venture capital firm on the planet. If what Obama says comes true we will have a huge influx of startup business. This is extremely good for real estate values, at least in this part of CA. It is also helpful in the So Cal areas were there is a lot of biotech startup. Same with parts of Boston. I don''t know where people like Kholsa Ventures are parking their green energy startups, but where ever that is will be helped too.

Real estate is not my fav investment, but I certainly could see some long run advantages to this policy change.

 

[Dancing Fire]

Date: 3/12/2009 5:46:50 PM
Author: Beacon
I just watched Obama make a speech to the Business Roundtable. Very good speech. One thing came out: apparently he wants to make the capital gains rate zero for small businesses and startups. ( I swear I heard him say that

)

saying it is one thing doing it is another.

 

[purrfectpear]

New York Times article on Walking Away From Your Mortgage

"Some lenders aren’t waiting that long to initiate their own foreclosure destigmatization programs. The Golden 1, one of the nation’s largest credit unions, now has a mortgage repair loan for people who have lost a home to foreclosure but want to buy a new one.

It’s hard to imagine that there won’t be a parade of insurance companies, credit card issuers and mortgage lenders in Golden 1’s wake, even though Fannie Mae and Freddie Mac may be unwilling to guarantee the mortgages of such borrowers for several years. In fact, Aaron Bresko, the vice president of lending for BECU, another large credit union based in Washington State, is putting together a panel called “How to Lend to the Newly Credit Impaired” for a conference later this year."

 

[Beacon]

This will happen. It happened before post 1990 recession.

I would lend to a defaulter, provided I got the right interest rate, right amount of origination points and the right downpayment on the right property. It will be very profitable for the lender. At this moment it would be very expensive as the lender has to find investors willing to take on this paper. But they will be out there after a while, once we have a more stable credit market.

Anyhow, this is subprime lending all over again, nothing new about it. It has been a decent business for years ( a very sleazy one to be sure), but profitable up til they hit the wall recently.

This is exactly who subprime caters to: the folks who go bankrupt, default, foreclose.....they seen it all.

 

[tradergirl]

from Irvine Housing Blog about a deluded seller trying to get the 2006 price for their house.

Astute Observation by Texas Triffid Ranch
2009-03-13 06:16 AM
My wife is a professional jeweler, and she’s been seeing the same exact behavior, over and over, from the same sorts of people. Her store, like just about every jewelry store in the country these days, buys gold, and she has a lot of sympathy for those in such a bad state of affairs that they need every penny they can get by selling their wedding rings or college rings. It’s the utterly deluded that drive her crazy. It’s not just the jackasses who figure that she’ll be able to tell them what a ring is worth over the phone (without an actual assessment, she can’t do anything, but these lazy sods don’t want to get up off the couch and get their stuff appraised unless they know it’s worth their time beforehand), who are the perfect victims for CashForGold.com. No, it’s the ones who are told “I can pay x for this” and keep emphasizing “But I paid y! Why can’t you give me y for it?”

By way of example, the market for diamonds is dead. Many analysts were warning for years that (a) diamonds aren’t particularly valuable or rare, and (b) the market was so badly flooded with mediocre diamonds that things were going to crash hard if enough people tried to sell instead of buy. Well, that crash is going on, and a lot of jewelry stores are going under because they overinvested in diamonds at the beginning of the decade. Most jewelry stores are already overloaded with diamonds, and it’s not worth their time to take more. Rubies and sapphires, yes, but not diamonds. This doesn’t stop sufferers of Cleopatra Syndrome from coming in and going into the elaborate family history behind that diamond engagement ring the seller bought a decade ago. When my wife says “Sorry, but I can only buy it for the gold, and the gold is worth x,” they go ballistic. “But it’s a two-carat diamond! What do you mean it’s only worth x?”

That’s what we’re dealing with here: real estate has finally reached the same level as diamonds, comic books, and CDs, in that it’s only worth what someone’s crazy enough to pay for it. The potential buyers are realizing that they can afford to wait and wait some more for the prices to drop to a sane level. The sellers, though, figure if they just keep hustling, they’ll get someone to pay their price. Keep hustling, kids, because maybe Santa Claus and the Easter Bunny need a new house.

Reply to this astute observation

 

[Beacon]

I love this stuff. Who cares what some sleazy Texas pawn guy does with his clients? The more disaster I hear about, the more opportunity I see.

 

[TravelingGal]

MSNBC ran a Q&A on why it''s a bad idea to walk away from your mortgage...

http://www.msnbc.msn.com/id/29669640/

However, the reasoning mentioned in the answer I would assume would not fly for people like PP who walked. It seemed more of a moral obligation than a practical one, according to the article.

Also, I''m not up to speed on bankruptcy laws...why would it be better to file bankruptcy over just walking away from your mortgage?

 

[steph72276]

TGal, I did not have time to read the article yet, but they might be saying that it is better to file than just walk away b/c when you file you give the property back (in some cases) and then nobody comes after you for the difference. I think CA is a non-recourse state so they won''t come after you anyway and so it would be better to just walk away. In some states they do come after you for the difference though if you just walk away.

 

[Imdanny]

No, let them go down. Do we want middle and working class families not to be able to buy a home? That''s kind of ridiculous. Home prices have doubled, and in some places tripled, in a very short amount of time. That is what is "wrong," not the fact that home prices refuse to keep rising like some kind of stock market gamble.

 

[purrfectpear]

Date: 4/24/2009 1:42:13 PM
Author: Imdanny
No, let them go down. Do we want middle and working class families not to be able to buy a home? That''s kind of ridiculous. Home prices have doubled, and in some places tripled, in a very short amount of time. That is what is ''wrong,'' not the fact that home prices refuse to keep rising like some kind of stock market gamble.

Hey there Captain Obvious

Glad you could join us. I think that''s been going on for more than a year now

 

[movie zombie]

houses used to be homes....homes which one lived in for the rest of one''s life and a luck child got to inherit. somewhere along the way we got the conspicious consumption thing going on AND started expecting houses to perform like the stock market. time to take stock of who we are as a people.

mz

 

[DearBuddha]

Date: 2/21/2009 10:33:40 PM
Author: TravelingGal
I''ve been watching since August 2005 and knew then it was going to get ugly. It''s still not ugly enough to buy. Average home in my area in 2005 was about 800K. It''s now in the 600''s. I need it to come down to low 5''s.


It annoys me when everyone wants to keep prices artificially inflated. Prices, at least in Socal, HAVE to come down. There is no way the average person/couple can afford the average home. Unless it comes down and people buy within their means, the problem will continue.

DH and I were scr*wed no matter where we lived. We lived in La Jolla for three years and now we''re living in Brookline, MA. We certainly couldn''t have afforded anything in North County, where we wanted to be, and the Boston area is generally pretty expensive as well.

We''ve just started our house hunting mission, and we''re looking to narrow down our options for what we can afford, which is low to mid-400s (good luck finding that near Newton!). Our friends have been in the market for about a year with no luck. I have no illusions that it''s going to be a frustrating and expensive mission.