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Thread: Housing Prices

  1. #1
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    Default Housing Prices

    Obviously a buyers market.

    We are trying to list our house and realtor paints a bleak picture. Worth about 3/4 of what we thought it could list for taking into account the economy. Seems as if people around us are all short selling their houses, effectively driving our price down. First time home buyers in the 100 to 150K range are buying like crazy.

    What a big mess this country is in.
    Tom Dorroh

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    Senior Member Goose's Avatar
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    I have a friend who bought a house in Florida just about the time the Florida market peaked. He lost his job and finally decided to mail in the keys to the bank and move to another state.

    He paid (and owes) $270k for this house which is now appraised at $190k and there has been one offer to buy it for $135k!!

    And I can make an argument that housing hasn't bottomed yet and will not bottom for several years.

  3. #3
    Senior Member Julie R.'s Avatar
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    I don't think it's bottomed out either, especially after Obongo trots out the full plan of incentives to buy foreclosures (which show no sign of slowing down).


    While I do think finite resources such as land (acreage) and waterfront properties will come back eventually, I'm guessing we're several years away from that as well as houses reaching or surpassing their 2002 value.

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    That makes me feel good! However, it's about what the realtor said.

    The guy next to me is a perfect example. He has a work visa and owes about 650k on his house. He has pulled money out of it about 3 times in the last 4 years. He has it on the market for 550k. Says the bank OK'd a short sale. If he sells it fine, if he don't the bank can have it. He plans to go back to his native country, but come back to the US when the economy recovers.

    Is this a great country or what?
    Last edited by Thomas D; 08-10-2009 at 09:09 PM.
    Tom Dorroh

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    Senior Member Goose's Avatar
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    I'm reading a book about this subject right now. One of my favorite stories in this book...

    An immigrant living in California wanted to quit his job and open an embroidery business for himself. But he had no money. What does he do? On the advice of a mortgage broker he buys a $584,000 house and would refinance the mortgage a year later when the house had appreciated. He could then take out $70,000 in newly created equity and use it as seed money to bankroll his embroidery business!!

    This man earned $3,600/month but the original mortgage application stated his income at $16,000/month.

    Needless to say this guy never started his embroidery business and lost the home he couldn't afford when his mortgage payment adjusted higher.

    And the sad thing about this story is the fact that this guy thought he could afford this house to begin with. He said, "We felt we were part of America because we could afford to buy a house."

  6. #6
    Senior Member dnf777's Avatar
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    Quote Originally Posted by Goose View Post
    I'm reading a book about this subject right now. One of my favorite stories in this book...

    An immigrant living in California wanted to quit his job and open an embroidery business for himself. But he had no money. What does he do? On the advice of a mortgage broker he buys a $584,000 house and would refinance the mortgage a year later when the house had appreciated. He could then take out $70,000 in newly created equity and use it as seed money to bankroll his embroidery business!!

    This man earned $3,600/month but the original mortgage application stated his income at $16,000/month.

    Needless to say this guy never started his embroidery business and lost the home he couldn't afford when his mortgage payment adjusted higher.

    And the sad thing about this story is the fact that this guy thought he could afford this house to begin with. He said, "We felt we were part of America because we could afford to buy a house."

    Stupid maybe, not sad. What is sad is that the idiotic banker than floated this loan has been bailed out with our tax money, and no measures to stop him from going right back out and doing it again have been put in place!

    I'm sure he could afford a house. Just not a $600,000 one! When my grandparents (Italian immigrants) wanted to start a business, they RENTED and SAVED their money to put towards their business. Crazy, I know.
    God Bless PFC Jamie Harkness. The US Army's newest PFC, but still our neighbor's little girl!

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    probably not a banker more like a mortgage broker, which is a big part of the problem!
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    Senior Member Gerry Clinchy's Avatar
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    From a real estate industry publication:

    RISMEDIA, August 12, 2009-Home values in the United States posted their 10th consecutive quarterly decline, falling 12.1 percent year-over-year, according to a Zillow Home Value Index of $186,500, according to the second quarter Zillow Real Estate Market Reports. But for the first time since home values started to fall in 2007, the rate of year-over-year decline has shrunk slightly compared to the previous quarter, with home values falling 12.1 percent as opposed to 12.4 percent year-over-year in the first quarter. The Zillow Home Value Index measures the value of all homes in an area, and the Q2 Real Estate Market Reports encompass 161 metropolitan statistical areas (MSAs).
    Home values have flattened significantly in the short term, with the Zillow Home Value Index falling 2.7 percent from the first quarter to the second quarter, and falling only 0.9 percent from May to June.
    Nationally, the total number of home sales in June fell 23.7 percent versus a year earlier. However, total home sales rose 3.8 percent in June versus May. Additionally, in 39 markets, home sales increased year over year. Some of these larger markets include Miami-Fort Lauderdale, Los Angeles and Phoenix.
    Despite encouraging signs in some markets, distress signals tracked by Zillow remain high, suggesting that for most U.S. metropolitan areas the bottom of the market has not yet arrived, at least in terms of home values.
    Negative equity remains high, with 23 percent of all owners of single family homes with mortgages owing more on their mortgage than their home is currently worth, relatively flat compared to 22 percent in the first quarter. Foreclosure re-sales made up more than one-fifth (22 percent) of all home sales nationally in June, and 29.2 percent of all homes sold in June were sold for less than what the owner originally paid.
    Meanwhile, 29 percent of homeowners say they would be at least somewhat likely to put their home on the market if they see signs of a turnaround, according to Zillow’s second quarter Homeowner Confidence Survey, signaling an abundance of potential shadow inventory waiting in the wings.
    “While we are encouraged by the increasing sales in many markets and the overall improvement in the rate of decline of the Zillow Home Value Index, I hesitate to be overly optimistic for the near future,” said Dr. Stan Humphries, Zillow chief economist. “There are still many hurdles to true market recovery. Foreclosure re-sales are buoying overall sales numbers, but their low prices are keeping home values down. Reports of increasing mortgage defaults signal that foreclosures are likely to increase again and peak in mid-2010. With increasing unemployment and high rates of negative equity, we have a fertile breeding ground for even more foreclosures, which add to the already-high level of for-sale inventory that needs to be cleared before values begin to rise.
    “While the abundance of affordable foreclosure properties is a boon for many first-time homebuyers, I don’t believe we’ll see significant recovery until demand-side fundamentals improve, and more move-up and move-across buyers re-enter the market.”
    A real estate market bottom may be closer in some areas than in others. Eighteen of 142 declining MSAs have posted at least three consecutive quarters of smaller year-over-year home value declines, signaling a true trend. Nine of those markets are in California, where housing markets have been hard-hit by foreclosures and declining values. Those markets are:
    • Los Angeles MSA
    - Home values there have fallen 34.8 percent from the peak of the market in 2006.
    - Sales were up substantially in June, rising 11.4 percent compared to the same time last year.
    - The Zillow Home Value Index fell 14.9 percent, compared to 18.6 percent in the first quarter.
    • San Diego MSA
    - Home values have fallen 35.7 percent since the peak of the market in 2005.
    - Sales were up 9.7 percent year-over-year in June.
    - The Zillow Home Value Index fell 14.5 percent year-over-year in Q2, compared to 18.1 percent in Q1.
    • Stockton, Calif. MSA
    - Home values have fallen 60.9 percent since the market peaked in 2006.
    - In June, sales were down 12 percent year-over-year.
    - The Zillow Home Value Index fell 29.9 percent in the second quarter, compared to 32.9 percent in the first quarter.
    - Foreclosures continue to be an issue, however, with 69.2 percent of all sales in June being foreclosure re-sales.
    • Other California markets with three consecutive quarters of shrinking year-over-year declines are:
    - Oxnard MSA
    - Santa Rosa-Petaluma MSA
    - Modesto MSA
    - Vallejo-Fairfield MSA
    - Yuba City MSA
    - Napa MSA
    In total, 142 U.S. metropolitan areas experienced year-over-year home value declines, eight markets were flat, and 11 markets experienced year-over-year appreciation in home values.
    The full national report, in its new, interactive format, will be available at www.zillow.com/local-info on Tuesday, Aug. 11. Additionally, in most areas data is available at the state, metro, county, city, ZIP and neighborhood level.
    For more information, visit www.zillow.com.


    Read more: http://rismedia.com/2009-08-11/home-values-flatten-in-short-term-yearly-declines-shrink-but-high-rates-of-foreclosure-negative-equity-expected-to-delay-true-recovery/#ixzz0NyOrFjIz
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  9. #9
    Senior Member Gerry Clinchy's Avatar
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    probably not a banker more like a mortgage broker, which is a big part of the problem!
    Countrywide was a bank. Now it's called Bank of America.

    They have considerably changed their lending practices, but I have received emails of brokers still offering "no document" loans ... but with 30% down

    Due to the constrictions of conventional loans, FHA loans are increasing at an astronomical rate due to 3.5% down payment available. Watch for another "crisis" on FHA loans. There are upper limits on loan amounts for FHA loans, but those limits vary regionally, and places like CA have very high limits.
    G.Clinchy@gmail.com
    "Know in your heart that all things are possible. We couldn't conceive of a miracle if none ever happened." -Libby Fudim

    ​I don't use the PM feature, so just email me direct at the address shown above.

  10. #10
    Senior Member Goose's Avatar
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    The Journal ran an article about the FHA/Ginnie Mae impending train wreck. We'll never learn.

    I also read that the average California foreclosure has a total loan balance of $425,134 on a home now worth $236,739. Wow!

    Can we sell California to the Chinese for let's say $800,000,000,000? They get a big state and we can wipe out all that debt.

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