Can someone explain to me why anyone, I mean ANYONE, is out shopping for houses today in America?
Yields on 10-year US Treasuries have risen above 5pc for the first time since 2002 on heavy selling by big institutions, sending tremors through the US mortgage and corporate credit markets.
Michael Taylor, senior economist at Lombard Street Research, said this year's sudden rise in 10-year yields risked tipping the US economy into a downturn.
"This could be the catalyst for a sharp correction in property prices and wean consumers off their credit binge," he said.
April 14, 2006
Another day, another reason the overheated US property market is crashing... zzzzz...
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24 comments:
"silverisgood said...
wean consumers off their credit binge.............came back and said not acceptable another words sorry no credit account for her
Personaly I think the whole credit score and however they evaluate your credit is a scam and a useless tool. If a homeless guy can get $250,000 large, and someone who always pays on time can't get a dell account for $600 this country is truly fucked."
Its like they want you do go into irresponsible debt. My wife and I both have excellant credit, no strikes according to the big three credit reporting agencies and yet we are in the same boat. Constantly turned down for accounts so that we usually just pay cash, or credit card(have plenty of those,)which we pay off in full every month to spite the bastards. Credit evaluation is indeed a total scam. We have NEVER been late on a payment or defaulted on any financial obligation, and yet are deemed uncreditworthy by the money gods.
And my idiot new neighbor just bought an unbelievably overpriced shithole down the street ,and hasen't sold he first house yet ,in Detroit of all hellholes. He got an I/O,neg ARM
loan with no problem he braggs.
Housing only goes up,right.
This country is totally,totally,totally fucked!
As I wrote in another post the problems with credit are that people payment shop instead of shop with the total price tag in mind.
After being in debt I think there should be NO credit. We should have to pay cash for EVERYTHING. That would solve a lot of problems including the oil demand problem (Chevy Cobalt would be best seller instead of Tahoe), house problem (Trailers would be popular again as would 1000 sq ft houses instead of McMansions) and retirement would be fixed (no more Social security since people actually have their own money).
I have no idea why anyone would consider buying right now, but there are some. I recently sold my place in Malibu to a realtor. Another lady I know is in escrow to buy a place in the Valley for $850k. She is single and is going to do an I/O loan so that she can (sort of) afford the payments. After a very slow start to the year, I am now noticing more and more sold signs throughout the beach communities and the valley. I'm in the camp that things are going to get very ugly.
Anonymous said . . .
"I would say there is no more credit, Christ, my wife and I both have great credit, no scars whatsoever, and she needed a new monitor for her computer, so after doing some research, she decided to go with a Dell.
"So she thought what the hell sign up for a Dell prefered account, now mind you I said our credit is excellent sure enough the computer generated or what ever is is came back and said not acceptable another words sorry no credit accont for her." [Some typos corrected]
Kiss the gods who saved you from Dell's terrible credit-purchase plan. However, your wife must not have done much research, because Dell is possibly the worst, most unethical computer company in the world.
http://www.ripoffreport.com/results.asp?q1=ALL&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search%21&q5=Dell&Search=Search
If the link above doesn't work because it's so long (I tested it, and it worked for me) just go to ripoffreport.com and click on "Dell Computer." The horror stories posted by Dell rip-off victims are hair-raising to say the least.
The better business bureau in Dell's hometown has received more than seventeen thousand complaints against Dell. The actual number of irate customers worldwide must be in the hundreds of thousands, if not millions. However, the Attorney General of Texas has, apparently, done nothing. Dell employs a lot people, and is a major revenue source.
Hah!! Here's a crazy couple buying a house - but, it's outrageously cheap (96K), it's on more land than reasonable, it's close to the city, and we are getting a 30yr fixed loan - despite 'advice' from everyone around us to get a bigger,newer house in a flashier neighborhood and an ARM.
We are buying now because I think that the rates will do NOTHING but keep going up, and I want to lock in the lowest rate I can NOW.
We don't PLAN on moving anytime soon, so hopefully we will be able to ride out the flip in property values, and come out the other side of the bubble with our shirts on.
I'm in the market to buy. I just don't want to get screwed by an ARM that I can't afford. I'm planning on getting a 30yr fixed mortgage but the problem is my wife and I have a combined income of merely 95k per year. That gives us purchasing power around only 270k - which is about $100 grand short of what we need to purchase a decent starter home around here (Williamsburg VA).
In the future home prices will fall which will force the banks to demand 20% down. There will be no sellers and no buyers = no market! If I don't buy today, I will be priced out for YEARS to come. If I DO buy today, I will pay top dollar for a depreciating asset. If I continue to rent, I move that much closer to retirement with no equity. It seems you just can't win anymore.
silverisgood said...
"well First Anonymous, i was pressed for time that is why there were typo's, I dont need a spelling course on your behalf thank you.
"Second I build and sell custom built gaming computers with my own hands.
"I never said i was buying a dell "computer" I said "monitor"
and you obviously have no idea what you are talking about, dell makes the No.1 monitor on the market, they use LG pannels which are the best in resolution and have high marks across the board dont make me prove you wrong and a fool, but then again I did not ask you for your opinion on what I wanted to buy i was making a point tword the credit weaning, you want to talk comps bring it on."
-------------
Well silverisgood, you need to re-read what I wrote.
Firstly, because I fixed some of your typos so the sentences could be read more easily, I made a note of this. This had nothing to do with your spelling. One cannot put something in quotations if one has altered it unless one notes the alterations. To do so would be to FALSIFY the original. I deal in publishing, so I know what I'm doing.
Secondly, I never said you bought a Dell computer. I said Dell is possibly the worst, most unethical computer company in the world. I did not write a word about the quality of Dell computers.
I couldn't care less who makes the #1 monitor or computer. Dell is an unscrupulous company with a horrible customer track record.
Incidentally, if you return a defective NEW monitor to Dell, you almost certainly will receive someone else's repaired USED monitor in its place.
I thought you would be pleased to know that your apparent misfortune was, in fact, you good fortune. But, I guess you would rather feel slighted and abused. Certainly your misapprehension and misinterpretation of my remarks do not speak well.
Speaking of credit cards.. I am balance-free for the last 2 years or so. Always pay balance in full and on time. I even settled a few scars from the past in my credit report. Guess what? my score went down!!!
People are still buying because delusional realtors are telling them to. They drank the purple Kool-Aid and are repeating the "real estate never depreciates" chant. People believe what they want to hear. Nobody likes to hear the negative stuff. Everyone likes warm fuzzy rainbows even if it's a lie.
We have an acquaintance who works for a realtor and she insists real estate is going to keep going up but not 25% per year, maybe "only" 15%. We live near a FL air base that is due to get about 3,000 more airmen over the next 2 years due to base realignment. The realtors around here insist that when all those people come in, real estate sales will skyrocket. I don't know too many military personnel that can afford $400,000 houses. Realtors are evil.
notbuyinganymore said
"It is just nice to know that there are other people out there without blinders on. Two years ago there was very little on the internet about the real estate bubble and I was starting to feel like there was something wrong with me for being so pessimistic about the housing market."
It reminds me of the movie The Matrix where in the beginning Nero feels like something isn't right but he can't put his finger on it.
Also, later in the movie the discussions about people's complacency in the matrix and they will do whatever it takes to protect it. You can't tell them otherwise.
I feel like that too, 6 months ago it was a lot worse but slowley I think people's perceptions are changing, but man, it takes a long time. This should have been the biggest no brainer.
I think I will rent The Matrix again for old times sake...
asdf said "In the future home prices will fall which will force the banks to demand 20% down. There will be no sellers and no buyers = no market! If I don't buy today, I will be priced out for YEARS to come. If I DO buy today, I will pay top dollar for a depreciating asset."
Dude...it's called SAVING. You are right that RE prices will drop but if you have liquid savings, you will be able to write your own deal. And the bank will thank you profusely. They will not make demands when they have 400 foreclosed properties on their books...but will try to accomodate you in every way.
Start saving everything you can right now. Cut all unnecessary expenses from cable TV. Sell the Hummer. Stop subsidizing Starbucks. Don't go within 5 miles of a shopping mall.
Cash will be king and you will be welcomed with your paltry lowball offer on a variety of foreclosed homes.
silverisgood said...
"As a big man I stand corrected, and do apologize if I came across harshly.
"stressfull day leads to stressful typing or opinions, again my bad"
I'm the original anonymous. You should see me when I'm stressed. I yell about everything, but I'm working on it.
To the writer above who says Dells are good deals, you may be right, but try to get Dell to repair something for which you have a 3-year extended warranty and expensive in-home service repair contract. You can spend days, even weeks, on the phone dealing with recordings and dozens of "technicians" (all in India), getting absolutely nowhere, and having to repeat everything you've said and done over and over and over and over, always ending up back where you started.
The complaints at ripoffreport.com are really worth reading. I don't see how Dell has gotten away with this scam for so long. I don't even bother with Dell customer support now. Dell's phone-support "technicians" haven't a clue as to how to fix anything, and the only time you'll get a Dell repairman to your house is if your computer completely crashes and requires a new C-drive. The warranty means nothing. The in-house service contract means nothing.
Desbear,
Sure, I could try saving! Let's run some numbers...
I have my eye on a condo which is selling for a wallet-busting $375k, about $100k more than I can afford w/o going the suicide arm route. If the price falls by $100k to $275, then it now falls within my affordable price range. If the bank requires 20% down then I need to save $55k. Let's add another 5% for closing costs so that's 13k + 55k = $68K.
I bought an espresso machine so we can make our own espresso w/o subsidizing StarBucks, but, gotta have cable (basic). At best I can put away $2k per month. So 68/2 = 34 months. That is, I can save and scrimp for 3 more years, and then throw down almost 70Gs in CASH and get the place:
-IF- the bank will take my loan with my piss-poor, sub par 650 credit score and
-IF- interest rates don't climb so high I'm once again priced out and
-IF- my wife doesn't decide to blow X# of Gs on lippo-suction/boob job/divorce my poor a$$!!!
asdf: If you buy now, you'll still come closer to retirement with no equity and more likely with a negative net value for ten plus years.
If you bought in SoCal around 1989, it took owners nine to twelve years to recover their purchase price. During that time, they had to pay carrying costs.
If those buyers waited until ~1996 (enough time to save up a nice down payment), they could have bought a house and be ahead of the 1989 buyers.
At least you know everyone is warning you.
There can be a rationale to buy for the right price, in a few good markets.
In my zip code, the city is building a light rail system. Now, I see letters to the editor all the time from people in other parts of the city calling it an expensive boondoggle, and that money should be spend elsewhere for road improvements.
Buuuttt... it's helping my area, and I do see homes continuing to be sold. The lower priced ones are picked off, new listings appear above those prices, they get bought, etc.
This called a...? Ding ding! Rising market. :-) And with gas prices shooting to $3 soon I don't see this pattern will change anytime soon.
Bond-market instruments should remain under selling pressure, with global yields likely to strike yet more multi-year highs, when the market reopens on Monday.
(CBS MarketWatch story after the market closed on Thursday)
We're in the range for new 52-week lows for some of the homebuilders; it'd be nice to see a couple of them crack on Monday on this bond news, and then again on Tuesday if D.R. Horton lowers expectations.
"Anonymous said...
Speaking of credit cards.. I am balance-free for the last 2 years or so. Always pay balance in full and on time. I even settled a few scars from the past in my credit report. Guess what? my score went down!!!"
Same here,balance free for years,no strikes against the record, NEVER miss a payment on anything. Lousy credit rating.
Credit reporting agencies about as useful as helicopter Ben and the FED. Scam,scam,scam! They want everybody in debt/slave hell!
Love the Market Watch report linked above:
Calling interest rates a "wild card" (!!!) after the May meeting.
Yup. You johnny-come-lately last minute buyers better do like the realtors say and get out there and BUY!BUY!BUY! before rates go so high that the cost of owning becomes prohibitive. LOL!
The scam with credit scoring is that scores are sold.
The buyer of the scores (lenders) want to max their profits, so the typical idiot who forgets to pay his bills on time and gets hit with outragous late fees a few times a year and continues to pay his bills... is rewarded with a higher score...
You see how the lenders would much rather have this profitable idiot on thier books; than responsible americans who pay thier bills on-time.
Did you know that in the credit card industry, people who pay in full every month and deny the lenders interest and pentalty fees are labeled, "deadbeats".
The smart thing to do is stop supporting the evil financial lending system. Get rid of your credit cards. Use 1 debit card for mail-order and write checks or pay cash for everything else.
Face it, they hit the merchants for 2% to 6% of your purchases (total merchant cost for accepting slave cards -- oops i meant credit cards). Damn it, I really did mean slave cards. At any rate the cost to merchants is reflected in higher prices. I have found that many retailers will offer discounts for cash when pushed (for example, negotiate your best deal on that new furniture purchase... then ask them what credit cards they accept. Tell the manager that you hate the banks and know that he has an additional 3% added in for the cost of processing your credit card... so write them a check for 97% of the agreed price and tell them this is your final offer. If they refuse start to walk out... 9 times out of 10 they will stop you and agree to your terms... after all they are going to net out the same amount. I have used tactic this myself saved hundereds of dollars over the years.
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