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Gerry Clinchy
09-26-2012, 01:50 PM
Take heart ... your home is now worth as much as it was in ... 2003 ... just 9 years ago. I say that with tongue in cheek.

From RIS Media


Home Prices Rebound to 2003 Levels
By Zoe Eisenberg
More great market news came through yesterday: According to S&P/Case-Shiller, in July, the average home price rose to the same level as those seen during summer 2003, when the housing boom first started its journey toward the 2006 peak. While this may not signify that we are currently standing on the cusp of a market boom, it does show a significant turnaround, and perhaps hints at a definite end to real estate’s bleak streak. The recent S&P/Case-Shiller national home price index showed that in July, prices increased by 1.5 percent for the 10-City Composite and by 1.6 percent for the 20-City Composite.

While this study shows that prices are up 1.2%, that would mean about $2400 on a $200,000 home. Truthfully, that may not mean a whole lot, since selling prices or asking prices don't usually reveal "seller assist with closing costs" ... and we see a lot of that in our current market. People are still buying homes when they don't have enough $ to cover their closing costs (such things as title insurance, tax & insurance escrows, 1st year of HO insurance) Those costs run about 4-5% of purchase price (generally). So, someone buying on an FHA loan with 3.5% down will have a total outlay of about 7.5% to 8.5%.

It may very well be that the low interest rates are prodding people to buy now, even when they are short on cash up front.

menmon
09-26-2012, 02:51 PM
The housing numbers were good yesterday along with consumer confidence....Romney may need to walk a narrow line on bashing the administrations economic policy.

Gerry Clinchy
09-26-2012, 04:13 PM
Menmon, you call that good? Typically, here in my area, due to closing costs going in and coming out, to break even someone would need to have an 8% increase in home price when selling a home. In the "normal" market, in my area, that would have required staying in the house for 4 or 5 years. So, since 2003, 9 years, the home price might have typically increased about 10%, maybe a little more. Instead, it did not increase at all. The net result of the housing bubble. Duh?

Couple that with an 8.2% DECREASE in median income since Obama took office (#s just released), and I'd say that pretty much sucks for "the middle class". Couple that with the increase in the cost of energy and food (NOT included in the COL index) and you've got a LOT of people who are hurtin' ... even if they are fortunate enough to have a job.

You mentioned you are in TX ... one state that has survived the economic downturn better than most. You may not have the best perspective on what is happening in other parts of the country.

menmon
09-26-2012, 04:20 PM
You are right...things are better in Texas. Obama did not cause this so using him as an escapegoat is chicken crap.

The point is housing has bottemed out and in some parts of the country values are going up notably. That's a good thing. Initiatives that were done to reduce inventory you can credit to Obama, but he couldn't snap his fingers and do away with the excessive inventroy...that takes time and time is working, and has supply gets less than demand values will go up.

In houston, you never see any real appreciation in a home, because it is to easy to get new ones.

Franco
09-26-2012, 04:39 PM
You are right...things are better in Texas. Obama did not cause this so using him as an escapegoat is chicken crap.

The point is housing has bottemed out and in some parts of the country values are going up notably. That's a good thing. Initiatives that were done to reduce inventory you can credit to Obama, but he couldn't snap his fingers and do away with the excessive inventroy...that takes time and time is working, and has supply gets less than demand values will go up.

In houston, you never see any real appreciation in a home, because it is to easy to get new ones.

That is generally true of homes built in subdivisons. Homes built on acrage with trees outpace the market because they appeal to people with money/higher income compared to those built in most subdivisions.

I am getting ready to sell a rental duplex that I purchased in 07 for 30% more than what I paid. Its value went up because it is adjacent to a much newer area that has developed with homes in the 300,000 plus range. Location much more so than the economy determines home values.

Also, don't forget that with QEIII, the Fed is in effect buying bad home loans vis bonds. This practice will only prolong the housing crisis in the areas that have a problem with housing. Had the Free Market allowed to work its magic, there would have been no housing crisis. The increased burden is now placed on tax payers.

v ricci
09-26-2012, 05:18 PM
don't forget the "obamacare" tax when you sell your home...
just sayin

menmon
09-26-2012, 05:21 PM
That is generally true of homes built in subdivisons. Homes built on acrage with trees outpace the market because they appeal to people with money/higher income compared to those built in most subdivisions.

I am getting ready to sell a rental duplex that I purchased in 07 for 30% more than what I paid. Its value went up because it is adjacent to a much newer area that has developed with homes in the 300,000 plus range. Location much more so than the economy determines home values.

Also, don't forget that with QEIII, the Fed is in effect buying bad home loans vis bonds. This practice will only prolong the housing crisis in the areas that have a problem with housing. Had the Free Market allowed to work its magic, there would have been no housing crisis. The increased burden is now placed on tax payers.

There is truth in that but I'm for helping the inocent victims that the financial crisis hurt as oppose to letting the beneficiaries of the financial crisis benefit again on someone's bad forturne. Its the right thing to do. Making the most money is not always the best way. Got to be able to look at yourself in the mornings..you agree?

coachmo
09-26-2012, 05:51 PM
You can't actually believe the economy policy of the current administration is making things better. Really?

gmhr1
09-26-2012, 06:26 PM
Median household income is down 8% since Obama took office glad someone can buy a home

Franco
09-26-2012, 06:47 PM
There is truth in that but I'm for helping the inocent victims that the financial crisis hurt as oppose to letting the beneficiaries of the financial crisis benefit again on someone's bad forturne. Its the right thing to do. Making the most money is not always the best way. Got to be able to look at yourself in the mornings..you agree?

I don't feel sorry for the banks, especially the ones that got bailed out. I also don't feel sorry for the folks that bought more house than the could afford. Whatever happen to living below one's means in order to have a cushion or rainey day fund? Poor fiscal practices and stupid decisons should not be rewarded. There was plenty of available and affordable housing, yet too many choose to be irresponsible in the homes they bought. Now they pay the price for those greedy decisions.

People need to understand that life is not fair and only the frugel will inherit the earth! Nor is it fair to expect tax payers to bail out banks and people who live beyond their means. People lose jobs all the time and that should be a consideration with anyone making a large purchase be it a home or vehicle. Nothing wrong with people being prepared for the worse life can deal them.

This may seem harsh to many but the reality is; work and savings is what built this country and not a big nanny state.

Self reliance is the Libertarian way!

Both Dems and Repubs policy is to punish those that save money through their unwavering support of the Fed and its artifically low interest rates.

Leslie B
09-30-2012, 04:21 PM
I don't believe that anyone is asking you to feel sorry for anyone - individual or corporation.

However, I think that your belief that being frugal is a guarantee for all to be well. I hate to burst your bubble but the average family has lost 40% of their net worth since 2007 and the vast majority of that is due to the drop in home values (70% of the drop in net worth). It is finding yourself with the pay check you had in 1992 - but with the bills and debt that you have today. No matter how frugal you have been or how well you have saved, you might have a little difficulty in making payments on your home.

As for people buying too much home, the American approach to real estate has been to use a Real Estate Agent (paid by commission so the more he/she gets you to buy the more he/she makes) who then goes to a Mortgage Banker (paid by commission so the more he/she gets you approved for the more he/she makes) and subordinated by a Real Estate Appraiser who is paid directly by the mortgage banker. I think that we can all see that the process is not designed with the consumers best interest at heart - it has dollar signs all over it and none of them are for the buyer!!!. This process has a significant contributing factor to the real estate bubble. However, for all the new rules in Dodd Frank (500 of them in this bill alone) there is nothing to change this process of mortgage lending. Shame on both Dodd and Frank for failing to address this basic flaw in the system.

That being said, if you are frugal and bring 20% down plus the closing costs, on the purchase of your $200,000 home in early 2007, that house dropped in value by 35% by 2010. So you end up with a $160,000 (less payments to date) mortgage on a house that is worth $130,00. Oops, you too, are underwater.

As for work and savings being what made this country, it did not. If you look at the history of our economy it was built by growing our businesses, expanding our markets, and making new and better products. The vast majority of our wealth was generated by companies appreciating in value - not putting money into savings accounts.
I do agree that the suppression of interest rates is a short term fix and is to the detriment of the long term recovery of our economy. Think about it from the stand point of the 15% of our population that is retired. Their income is derived from interest income. As interest rates increase their spending power and their ability to reinvest in our economy goes up.

I also agree that both Republicans and Democrats are equally to blame for the current financial fiasco and neither party has the ability or the backbone to make the changes necessary to head our economy in the right direction.

cpj
09-30-2012, 07:03 PM
I saw Mr. Schiller of the Case Shiller index interviewed a couple of months ago. He believes that if the housing crisis is a baseball game, we are in the fourth inning.

Franco
09-30-2012, 08:18 PM
I saw Mr. Schiller of the Case Shiller index interviewed a couple of months ago. He believes that if the housing crisis is a baseball game, we are in the fourth inning.

Yup! And, the Fed and current administration is only making it worse.

HPL
09-30-2012, 08:20 PM
You are right...things are better in Texas. Obama did not cause this so using him as an escapegoat is chicken crap.



The word is SCAPEGOAT, not EScapegoat.

BrettG
09-30-2012, 08:26 PM
It makes me mad when I hear people taking up for individuals that got those bad loans. When I was house shopping the last time I moved (2001) I received numerous offers for those crazy loans. I was encouraged to buy more house than I can afford. I resisted and got a 15 yr loan with a freckle higher interest rate which will be paid off in a little over 2 years. My interest rate is higher than I would like it to be but I'll own my house outright shortly.

huntinman
09-30-2012, 09:52 PM
The word is SCAPEGOAT, not EScapegoat.

HPL, he is a big smart banker... it might just be a new word found in Obamacare after they passed it...

Jim Danis
10-01-2012, 08:36 AM
don't forget the "obamacare" tax when you sell your home...
just sayin

The tax is only for those that make at least a $500,000 profit on the sale of their homes. It's an increase in the capital gains tax affecting the profits from the sale of homes. There aren't many people who will end up paying that tax.

menmon
10-01-2012, 10:13 AM
The policy of this country both republican and democrat at the collasp was to spend and get the country growing and then address the fiscal responsibility. Makes you mad to bailout someone for their mistakes but it was and still is the best option or not learn from the mistakes of our great depression that took the path that Europe has and so Europe is experiencing what we did in the 30s.

The party not in power has taken the position now that this was all wrong and they have the answers. The answers have not changed....stimulate the economy with monetary and fiscal policy and then when the country is growing rein in the spending and reduce the fiscal burden.

Furthermore, when demand increase given the money supply you will have notable inflation, so the debt burden will be reduced with cheap dollars, all the time things will be growing fast and the country will be prosperous until it catches up with us. Dr Becker a Nobel Prize winner and a former proffesor of mine won his nobel prize for something call "Rational Expectation Theory" This is the only way out, the part of this equation is can we rein it in when the time comes. Having said this, there is no other way out of this and this is what is going to occur who ever is the whitehouse or congress.

Now this is the time to have a large mortgage and the wrong time to have your wealth in cash. Real assets will rise in value as will the stockmarket, but you want no part of the bond market until the 30 year rate is 8% and them buy buy buy!

Marvin S
10-01-2012, 11:02 AM
collasp

but you want no part of the bond market until the 30 year rate is 8% and them buy buy buy!

What's a collasp?

Folks, the advice on the bond market is from someone who said bonds never went above 10% :p. Wasn't that your cutoff?

menmon
10-01-2012, 11:06 AM
What's a collasp?

Folks, the advice on the bond market is from someone who said bonds never went above 10% :p. Wasn't that your cutoff?

Opinions are like a<<holes...everyone has one.

Jason Glavich
10-01-2012, 11:10 AM
I blame the people who could not understand they could not afford their home loan. If you do not understand the loan you shouldn't sign the papers. I know a lot of people fell on hard times and lost homes, but most took loans they never could afford. When I was house shopping I was approved for much more than I could afford, I bought in the range I knew I could afford.

Local story, a waitress buys a home for 750k for her and her 3 kids. Her business laid her off, she said her mortgage should be reduced to show the new home value and let the rest go away. More investigating showed she never could afford it and never made a payment. Liar loans got us into this mess, the banks and the people are to blame.

Someday I hope this country returns to a state of personal responsiblity. No one is to blame except youself when you take a loan you cannot afford, or when you refinance to take a loan you cannot afford.

huntinman
10-01-2012, 12:06 PM
Opinions are like a<<holes...everyone has one.

you should know... someone sent me your graduation photo...

9036

mngundog
10-01-2012, 01:40 PM
I blame the people who could not understand they could not afford their home loan. If you do not understand the loan you shouldn't sign the papers. I know a lot of people fell on hard times and lost homes, but most took loans they never could afford. When I was house shopping I was approved for much more than I could afford, I bought in the range I knew I could afford.

Local story, a waitress buys a home for 750k for her and her 3 kids. Her business laid her off, she said her mortgage should be reduced to show the new home value and let the rest go away. More investigating showed she never could afford it and never made a payment. Liar loans got us into this mess, the banks and the people are to blame.

Someday I hope this country returns to a state of personal responsiblity. No one is to blame except youself when you take a loan you cannot afford, or when you refinance to take a loan you cannot afford.
Lots of blame to go around, individuals who took out loans they couldn't afford, banks for giving loans to individuals that knew they couldn't afford it, politicians for bailing out banks when the inevitable happened.

Leslie B
10-01-2012, 04:42 PM
It makes me mad when I hear people taking up for individuals that got those bad loans. When I was house shopping the last time I moved (2001) I received numerous offers for those crazy loans. I was encouraged to buy more house than I can afford. I resisted and got a 15 yr loan with a freckle higher interest rate which will be paid off in a little over 2 years. My interest rate is higher than I would like it to be but I'll own my house outright shortly.

Not everyone is as savy as you were with your home purchase. Often times, people believe the "experts" that tell them they qualify for a mortgage and encourage them to "buy as much as you can". There were a number of sales pitches, used by the financial industry, to push people to buy more home than they should. Why? Because they were PAID to do so. It lined their pockets.

I never liked them these sales tactics and felt that they were deceptive long before the financial crisis. With one hand the financial industry has promoted itself to be there to "help you reach your financial goals" all the while the decisions they were promoting were really the ones that paid them the most.

They made used car sales people look like missionaries!!!

menmon
10-02-2012, 09:57 AM
Not everyone is as savy as you were with your home purchase. Often times, people believe the "experts" that tell them they qualify for a mortgage and encourage them to "buy as much as you can". There were a number of sales pitches, used by the financial industry, to push people to buy more home than they should. Why? Because they were PAID to do so. It lined their pockets.

I never liked them these sales tactics and felt that they were deceptive long before the financial crisis. With one hand the financial industry has promoted itself to be there to "help you reach your financial goals" all the while the decisions they were promoting were really the ones that paid them the most.

They made used car sales people look like missionaries!!!

Free market...folks pursuing money will benefit society the most....flawed...there must be rules or people get hurt.

huntinman
10-02-2012, 10:01 AM
Free market...folks pursuing money will benefit society the most....flawed...there must be rules or people get hurt.

Risk and reward... no pain no gain... There are no guarantees in life except death, taxes and now Obama phones.