It's not just the real estate clerks, appraisers, builders, mortgage brokers and assorted REIC anymore.
Nope, there's some real hatred of HP'ers out there now by, you guessed it...
The Desperate Homedebtors in Denial
And it's only gonna get worse. Tribe versus tribe. Neighbor vs. neighbor. American vs. American as this thing melts down.
Stay safe. Stay cool. And stay renting!
February 01, 2007
Can you feel it HP'ers? The hatred of the Desperate Homedebtors in Denial
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65 comments:
And it's not only regarding the housing bubble/bust that is a "touchy" subject.
In addition to lecturing my sheeple peers about not getting into massive debt on a McMansion (and ESPECIALLY via "creative" loans such as ARM/Neg. Am/I/O and DOUBLE especially HELOCing their way into poverty!), I have also tried to educate them on the 401k/IRA/mutual fund scams.
These programs, similar to the REIC schemes to separate the schmoes from their hard-earned money, are designed to herd all the little sheeple into pens (the 401(k)/IRA), then shear them to death with mutual funds that clip them for fees, and slaughter them outright by having the sheeps "invest" (translation: speculate) on risky stocks that pay virtually ZERO dividends.
Furthermore, NOT ONE sheep has even considered what might happen to their portfolio as three million Baby Boomers per year are forced to cash out of the 401(k), selling their stocks and mutual funds.
Just like the hatred we HPers are experiencing by warning the fools about the housing bust, I am experiencing the exact same denial, arguments, and finally, abuse when I point out they are ALSO being screwed by Wall Street and DC on their retirement plans.
Face it, the vast majority of people don't want to think, trust "experts" to take care of them, and are either too stupid or lazy to really study the issues and look out for themselevs.
Finally, don't look for much to change (at least for the better) even AFTER this historic real estate bust plays out. Sorry, but the sheeple will be clamoring to Washinton DC to "DO something!!", and of course the lawmakers WILL do something: they will try every trick in the book, including passing "The Anti-Terrorist Homedebting Sheeple Act of 2008" to create "RTC II, The Sequel" to try to create an orderly liquidation of the several TRILLION DOLLAR bust.
Of course, the feds will either have to borrow the money to effect thier grand schemes or print it outright.
Either way, we are looking at some hard, hard times coming up. And anybody that has tried to warn the fools will be tarred and feathered for their efforts.
You can see the homedebtor denial in some of the posts on this site. People going on still about HP ers being cranks, bitter renters, loosers, etc. Most people liked the idea that through some magic they actually were not rich and well they did it by being smarter than the next guy. Of course they do not want this fantasy destroyed and they will look at any shred of news that reassures them that they will still have this magically accumulated equity. So in a way they are mad that there bubble is being bursted--in more ways than one. Then there are those who are upside down and those who are smug who cashed out earlier feeling superior (I did, I am not superior just lucky---recognize luck and be humble. It will be rough and slow. Most people may get it in theory, but bubbles unwind slowly not like an explosion as some expect. It will take all the way till 08 or 09. There will be some rallies, but the trend will be down. Yep, the magic of mean reversion.
No not really. I can imagine that sellers that want huge markups for their property and/or who are desperate to sell might get angered by the current pool of buyers who are demanding a more rational price.
I can also imagine bubble buyers w/ toxic loans might get angry at all the players/parties involved in the system & the system in general. I feel for them to a certain extent, but it was there voluntary act to participate in the mania so they need to look at themselves also.
The irony is that we've set up this huge system in real estate transfers which was meant to prevent fraud in the terms of fraudulent conveyance of property, which is rare nowadays. The fraud comes in at all the checks the law has put into place to prevent fraudulent conveyance (agents, appraisers, title check/insurance, mortgage lending processing etc.) We need to now go back and overhaul the entire process and seal off the new generation of fraudulent practices.
Cranks? bitter renters? Those
describe some here, no doubt. not all,
of course.....
Hopefully no kitties were injured in the previous posting!
It has yet to begin. The spring listing season will be an indicator. By summer we could hear 'jingle mail' has returned and lots of condo projects changing over to rentals.
Butch,
Wondering what you think about home builder stocks (TOL, etc.) and related home stocks (HD, LOW, ETH, etc.) hovering near 52 week highs?
Marky Mark
Well, with moderation enabled, all that hate stops at your PC, right Keith? We did see it when the trolls were infesting your sight, however, not pretty.
The credit bubble will take the deniers down just the same.
Precious metals up, up, and away today!
And to think just a day after the GDP report showing 4th quarter growth. Maybe things aren't as rosy as the headline appeared yesterday?
A lot of paper millionaires are going to see their wealth evaporate. But at least they won't be as bad off as the plastic debtors.
Humankind cannot bear very much reality.
T.S. Eliot
I still want one of those "Are you a Credit Whore?" T-shirts.
The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases.
I thought the Housing ATM machine was closed.
11:45:34, great post!
I sold my house on April 1st of 2006. We decided to sell in November of 2005 when we saw the prices skyrocketing and the crash coming. I'm in my early 30's, so most of the homeowners I know bought their homes after 2000 and many (but not most) are FB's.
I only see the hatred on the RE blogs. When I speak to people in person, what I typically get is "I wish I had sold," and "your lucky." I think this hatred is only found on the blogs because it gives RE clerks and FB's a place to vent. These people can't do it face to face because they would look like complete financial idiots.
Great defensive move, kicking the white cat in the cobbles!
Housing has entered the realm of religion and politics as "do not bring up topic".
Wow - look where the dark cat is ramming his foot! OUCH!!
Don't forget almost every MSM reporter and TV broadcaster is a homedebtor themselves, usually with a massive mortgage - the ego house
I'm a bitter renter...let's have a thread devoted to them.
Sure, I know it's the wrong time to buy. The problem for me is that I can't afford to buy in NYC. I'd like to have kids, but have nowhere to put them in my 600 foot 1 bedroom. The two-bedrooms here sell for $800K - $1 million or more. Exactly who can afford this stuff?
Unfortunately, even the rents for two-bedrooms are oppressive here. Who can afford $5,000 per month to rent a two-bedroom?? And rent increases here are often 5% or more. Who can afford to spend an extra $1,800 - $3,000 a year, every year, on rent?? My annual salary increase doesn't even cover that.
So now I need to either win the lottery or leave the city. I hope that things become more affordable soon.
Another prove that homedebtors are in denial, as shown below by the latest report on Money.com:
"American paychecks and spending both picked up steam in December, according to a government report released on Thursday. The report once again showed a negative savings rate of 1.2 percent, meaning that the typical American was spending $101.20 for every $100 of after-tax income. That's up slightly from the negative savings rate of 1.0 percent in November."
It seems that homedebtors are spinning furiously that hamster wheel just to keep up with outrageous mortgage, PMI, taxes, HOA, and car leasings. Meanwhile, I rent my apartment for $900 / month, front to the beach, ocean view, pool, jacuzzi, sauna, gym, valet parking, concierge, tennis courts, cable TV, central air-cond...all included in rent. My IRAs are all funded already for coming April 15, to take advantage of deferment; emergency fund for one year is done, no debt, vacation savings account is funded for this year's trip to Europe, savings to pay cash for my next used Lexus is half way through, etc. I can do all this with the savings from renting instead of buying. The mortgage for my current rental would be way over $3,000.
Yup my brother in-law has an IO-ARM Ajustable coming in Sept of 07...and he is paying out the nose now..wait till that Sept Mortgage statement come in the mail...I should probally bring over my Portable Defibrillator at our next gathering of fools.
I am a bitter renter. But a word of cautin to Hp'ers. I was ready to buy a Mercedes 500, I had agreed to the price,and was waiting in the finance office. Thankfully, they took a long time to call me and I had a chance to think it over. I said that I worked so hard for this money, flipping mulktiple houses to FB so why should I blow it now. My Toyota runs great and has no payments. So I got up told them adios and left. Remeber Hp'ers you need to keep the money from the flips.
Skianddive,
hey fellow ski bum. I only know what you went through at that party. Those were probably the same people who said people would not travel all the way to Florida to go to an amusement park (Disney World); no one would ever pay $3 fpr a cup of coffee (Starbucks); take a second mortgage and buy Lucent stock, now you cant give it away by the truck load; Enron is a great buy!!!.
BTW I rent because I refuse to pay todays prices. Were young yet. Matter of fact, my wife and I and one other couple rent and we are the only ones with disposable income left to enjoy life, travel, ski, go out etc... But oh the pain...were not building equity!!!! Im so sick of that stupid brain dead freakin comment. Enjoy.
I own a home. I'm not in denial of anything. I don't hate anyone but I do think most of you are insane.
I know the market has fallen. I would be surprised if it didn't after the huge runup. I bought my home for $345k in late 2000. Homes in da hood were selling for $800K in late 20005. By summer 2006 nothing was selling. The finally the new reality kicked in and they are sporadically selling again but for $700K, but they are selling. Instead of selling in a 2 weeks like they used to in 2005, they are selling in 3 or 4 months. It would be pretty shitty had I bought for $800K, but I didn't and neither did 90% of my neighbors. This is the missing ingedient you wackjobs miss. Not EVERYONE bought at the peak. Not EVERYONE is screwed. MOST people are just fine. Even if prices fall another $100K I'm still smiling.
I read all these comments here saying "I pay $900 for an apartment", "I pay $1000 for an apartment as some sort of in your face ot home owners. Well good for you. I own a 3400 sq ft McMansion in a top tier neighborhood. I refinanced 3 years ago and pay $1500 a month today. Of that $1500, ~$350 is principle and ~$300 is a tax break. Gee I don't know, is paying a net of $850 for a home a better deal than $900 or $1000 for an apartment? Hmmmm let me think long and hard about that.
The reason I think most of you are insane is because you take some valid concerns to an extreme without any rational thought. Housing will crash 70%. Every single owner has a negative option ARM that is reseting to triple the monthly paymnet. Gold will be $1500. Gas will be $8. Stocks will tank. Inlfation will be out of control. The dollar will be worthless.
And you've been saying this for 2 years now. You got one thing right. Gold is up 50% over 2 years granted. You called that one, but the S&P500 was up 30% too, the same S&P500 you were all predicting would be crashing in 2006. Housing is down 10% over 2 years, not 70%. Gas is $2 a gallon, about where it was 2 years ago. Unemployment is lower than 2 years ago. The dollar is where it was 2 years ago. Yet you still sream about hyperinflation and global depressions. How can anyone take you seriously?
You "savvy" homebuyers may say you can tolerate a drop in you housing value because you bought early enough but I know that's a lie. No one is comfortable with a drop in asset values. If you have 300K equity and that equity drops 100K you still have 200K, right? But that loss will keep you up at night especially if you, like so many others, spent that equity on stainless steel appliances, granite countertops, SUVs and adding on a "media room" for the big screen.
It's hard to take people serious who think they're smarter for buying before the boom when they had no idea, as no one had, that RE would rise like it did.
Hey guy with the MacMansion. So you have nothing to worry about, right? You are saving money every month like hell, you probably don't have any debt either...right? Or you don't have to spend most of your life on commutes from burbs in the boonies to work, right? How's that emergency fund going? About that retirement account? about those expensive tuitions for kids? Another thing: for all of you, like my wannabe neighbors, who waited for their parents to die in order to get a free ride in real estate through inheritance, you should be ok, too. BTW, unemployment is low but most jobs created pay low wages or don't offer benefits or substantial raises to keep up with this artificially "low" inflation. Interesting, gas is still way above normal levels from years ago, gold and commodities in general are through the roof, half of Americans can't afford health care, property taxes and insurance are up, hotel room rates are up, dentist bills are up (they need to flip homes, too), tuition is up every year, construction materials and labor are up, deficit has skyrocketed, seventy five percent of Americans live from paycheck to paycheck, but there's no inflation? Sure, if you want to give your money to China by buying Chinese and Indian crap at Wall Mart and Target, or buy insanely subsidized corn products, sure there's no inflation...but for the rest. You guys need to open your eyes, vote smart, question authority, and stop watching Fox channel.
BORKA!!!!!!!!!!!!!
Anonymous 7:09:52 PM, you address HPers as though we all have one mind and one voice. You are guilty of the same generalizations that some HPers make. Some of us know not everyone bought at the peak and not everyone is screwed. If you haven't extracted any of the equity from your house and you bought > 7 years ago then you're probably in good shape.
But with the savings rate in negative territory, I'm thinking a lot of people will not be in good shape if prices continue to fall.
Also, real estate sales hit record levels over the last few years - many people bought at or near the peak. Many of them will be screwed as prices fall. Many of them had to take out a toxic mortgage in order to by the house - they are likely to be screwed.
No, not everyone who owns a home is an FB. But many are and the consequence will be higher supply, lower demand and a lower equilibrium price in general. In some places prices will be much, much lower.
That's really not such a radical idea. But it sure is amazing how angry some people get when you try to explain it to them.
I agree with anon 7:09:52.
I bought a house for 175 in 2001, refied to 5.5 fixed in 2003, and pay 1050 a month. Even if my house depriciated all the way back to 2001 prices, I've had a 1/4 acre lot, 21,000 gallon diving pool, 2000 square feet of quiet, no neighbors living for around a grand a month. Oh - and I've had the tax deduction for 5 years.
A house just like mine sold for 310K in late 2004 - and the neighbor behind sold for about 2.5 per square foot as what I paid in mid 2005.
If 1 out of 20 people are "FBs" with option ARMs from 2005/2006, then the other 95% are not FBs, and will pick up their forclosed properties cheap. And then rent them to you.
I agree that if you bought 7 years ago, you will be just fine and come out with a nice profit whether you sell now or a few years down the road. You are lucky, you timing was good. How differently would feel if you had bought last year or two and possibly even three years ago? I think a lot of people on this blog just chose to pass buying in the last three years. That does not necessarilly make them stupid or pessimistic, they just saw the writing on the wall.
I am curious - if you are paying down you principal by $350 a month, when will you house be paid off?
QUOTING:
"BTW I rent because I refuse to pay todays prices. Were young yet. Matter of fact, my wife and I and one other couple rent and we are the only ones with disposable income left to enjoy life, travel, ski, go out etc..."
and
"My IRAs are all funded already for coming April 15"
My wife and I are young too. I'm 32, she's 28. We go out more often than eat in. That's due to the fact that neither of us has a clue what to do in the kitchen aside from pressing the cook button on the microwave.
We ski 4 or 5 times a winter, and would do it more often if it were closer to home. I play golf 2-3 times a month. We travel too. In 3 weeks we're off to Spain for 5 days.
Another tell of the low income status of the average poster here; glee in fully funding an IRA. Well you got me there man. My wife and I make too much money to qualify for the IRA deduction and hence we contribute $0 to IRAs. However our 401(k)s are both maxed at $15K a year.
Oh and we own a home too. Imagine that!! Dudes, get over yourelves, you're not that special, really.
Where do you people live that your houses are 340K with diving pools? Oh, that's right - clearly not in the Northeast or West Coast "hot" cities.
For me to get that out in the NY 'burbs, we're talking well over a million. So I tire of smug homeowners acting like they are financial geniuses for having bought in 2000 or before (when I was in school, by the way, and when prices here were even affordable to many). Come to my world and tell me not to worry about housing costs -- spouse and I make about 350K a year (with incomes going up every year), save 5K a month, have no credit card debt, put money into retirement accounts and stocks, and have a little over 100K to put into a POS 800K house that will be old and need updating. Did I mention we have no kids yet? We'll have to find that money somewhere.
So am I bitter renter? Yep - a rich one, but bitter as hell that stupid people who lack self-control f-ed it up for those of us who behave responsibly.
joey said...
Here in southern NH the rent to ownership spread simply isn't that wide. A two bedroom apt costs maybe 1000, month. To own it is about 1400-1500 including taxes. Not chump change but it does negate much fo this FB stuff. THe whol world isn't Cali and Fl.
-----------------------------
Yo, Joey.. what is the average income in southern NH
I think its about $17-18 K, don’t think the average person can afford the average home southern NH..
The same house that now costs about 1,400 a month cost about $700 a month
In 01..
So why the increase?
Anonymous said...
Another tell of the low income status of the average poster here...
Your obviously a newcomer to this blog. A lot of posters here have very high incomes, own their own businesses, have cash in the bank, own substantial amounts of RE, etc. And many of these people rent.
Besides, you shouldn't piss on someone because of their income. There's always a bigger dog who can come along and piss all over you.
Hey whizkid homeowner- If you are so smart then why did you not sell at the top. Let me think 100K profit at 2K a month rent would pay 50 months of rent. That is four years. And guess what your house will drop another 200K That is around the time that you should buy. Let's face it our intelect is just superior to your little pea for a brain. So go mow the lawn like a good servant does. My landlors is doing mine as we speak, I have a big glass of ice tea sitting on my ass, watching him work and lose money at the same time. Life is just grand.
Looks like I touched quite a few HP nerves with my post.
- I never once said I was a savvy investor. I suspected that r/e would be a good bet. I was right. You suspected renting would be a good bet. You were wrong. Pretty simple really.
- The home I own is on the west coast, in a "hot" city smart guy. And no I don't have a diving board (??). Did you not read the post? It was $345K in 2000. Now it's $700K. That's how r/e works. You missed out. Sorry.
- Would I prefer to have $400K equity instead of $300K? Sure who woudln't. Am I going to lose sleep because I ONLY have $300K? Uhmmm no.
- No I don't have any debt aside from a mortgage. I know that doesn't fall into your neat little preconceived notion of the FB, sorry to disapoint. No student loans, no credit cards, no car loan, nada. Every now and then I will carry some debt - $200, $300 - on my credit cards just so my FICO stays up. Having absolutely no debt is bad for your credit score.
- I work from home so my commute is the time it takes me to get from my bedroom to my home office. On a good day 10 seconds, on a bad day 15.
- Hotel room rates are up? Are you kidding me? I drove cross country a few months ago on I-40. I stayed at motels along the way for $32 a night in one town. I was in La Jolla,CA recently and stayed at a Radissson for $119 a night. In 2001 I used to go to the area quite often and $150 was about as cheap a room as you could get. You have no idea what you're talking about.
The rest is pure socialist garbage about health care costs and low paying jobs. Wake up people and take a look outside. This economy is booming. Even in the best of times there are losers in the economy. Sounds like many of them are HP regulars. The 45 million uninsured is a myth created by liberals. Take out 20 million illegals and the millions who could afford insurance but choose not to buy it and the "crisis" goes away.
As for the usual Walmart, Fox, China diatribe, doesn't it get old for you socialists? Same bullshit over and over. Again, I ask how do you expect anyone to take you seriously?
I am curious - if you are paying down you principal by $350 a month, when will you house be paid off?
Years before *YOU* stop paying rent...
Yo, Joey.. what is the average income in southern NH
I think its about $17-18 K,
Are you high? 2006 median income for a family of 4 in NH is $79,000. California is $67K.
Nashua's median income is $68K. LA's is $54K. And NH has no income tax and no sales tax meaning that $68K is worth $80K in LA after taxes.
$17K average income what a moron.
Where do you people live that your houses are 340K with diving pools? Oh, that's right - clearly not in the Northeast or West Coast "hot" cities.
HUH? In 2000 $340K could buy you a very nice home with a pool in San Diego, OC, LA, pretty much anywhere in the country actually.
And PS all a diving pool means is 8 feet deep...big deal.
Anon 9:54
310K with diving pool? Chandler, AZ.
Watching as the out-burbs around Phoenix collapse and houses in my close-in 'hood still sell in 30 days or less.
1/4 acre lot with mature trees, 40' between houses, etc.
Never "cash-out Refi'd", owe about 90K, prop taxes about $1300 per year, paying 5.5% fixed.
Countrywide sends refi offers everyday - they go right into the recycling.
But according to some here AZ is just a shoothole full of dumbarses, right? Maybe in Queen Creek, where all the California-cash-outs thought they would make a few bucks off us desert hicks by buying houses sight-unseen. I'll buy their "$250K" house from them (or their bank) for about $125K, and sell it to a retiree from the midwest for $150 - in around 2009. Until then my $125K in cash grows by about $500 per month courtesy of Uncle Sam's T-bills.
If you really make 350K per year, and you "can't afford" kids or a house, you've got serious money management problems.
Your obviously a newcomer to this blog. A lot of posters here have very high incomes
The income limit for an IRA contribution is $70K. The poster said he maxed out his IRA. If that is your definition of high income, so be it. To me that is low income, middle income at best.
PS: It's you're not your. If you're going to scold me, at least have the decency to use proper grammar.
Anonymous (Thursday, February 01, 2007 7:09:52 PM) said...
"I own a home. I'm not in denial of anything...I bought my home for $345k in late 2000...I refinanced 3 years ago and pay $1500 a month today."
Correction: you're renting the house from the bank.
Even if prices fall another $100K I'm still smiling.
Will you still be smiling if prices drop another $200K or $300K?
That brown cat's got some skills! Poor white cat is toast
Anonymous,
You are right about people who bought long back (i.e. before 2003/2004 according to me ). They will be fine no doubt. But what people here are trying to say is its not a good time to buy now. I can guarantee you would not buy your own place today for 700K so why should we jump in now. Its better to rent it out vs buying NOW and I dont think you can deny that. Also you are underestimating the number of people who jumped in the last 2-3 years using stupid loans..Those are the ones that are going to get screwed.
"HUH? In 2000 $340K could buy you a very nice home with a pool in San Diego, OC, LA, pretty much anywhere in the country actually."
Even in 2000, $340K couldn't buy you a very nice home with a pool in San Diego. It could buy you an OK home in a moderate neighborhood. I got a crappy home in a moderate neighborhood for $270k in 2000.
Anonymous (Thursday, February 01, 2007 8:46:38 PM) said...
"...If 1 out of 20 people are "FBs" with option ARMs from 2005/2006, then the other 95% are not FBs, and will pick up their forclosed properties cheap..."
Actually, if 5% of houses are foreclosed, several things will occur, which might dim your rosy view of that future.
First, since prices are set at the margins, the reduced prices of foreclosed homes will immediately make your home worth less.
Secondly, lending institutions will tighten their credit requirements, (no more liar's loans, or 100% financing) and probably be increasing interest rates to cover their foreclosure losses.
If you've already spent some of your home's "equity", good luck getting financing for a second home.
I imagine that a "bitter renter" with some ready cash will more likely be the new owner.
Anon 7:09:52 PM:
First off we are not insane we are flying monkeys, got it? Capiche?
Secondly, its hard to make the best guess without knowing which "hot city" you live in but most of CA residential real estate is heading back to 2002 prices. That should take care of the majority of your remaining equity.
It is only a question of time.
"Looks like I touched quite a few HP nerves with my post."
Translation: FC troll.
Keep it a little more subtle next time. You might as well have signed that one "PGB".
"First, since prices are set at the margins"
Please don't remind the homedebtors of this. Illegals with suicide loans drove the prices to current insane levels, but now solid middle-class homeowers are going to keep it there while kamikaze borrowers default and their lenders implode. Clearly, prices are only set at the margin on the way UP.
First, since prices are set at the margins, the reduced prices of foreclosed homes will immediately make your home worth less.
I see you have fallen in a common trap. You assume foreclosures sell for 50% off. They don't Do some research you'll see that foreclosures sell for pretty close to FMV, within 10% usually. So OK 5% of homes foreclose, sell for 10% less than FMV, meaning home prices fall 10%. Not great, not a catastrophe either.
Secondly, lending institutions will tighten their credit requirements, (no more liar's loans, or 100% financing) and probably be increasing interest rates to cover their foreclosure losses.
God you're funny. Lenders don't increase interest rates man. Rates for mortgages are set by capital markets not individual lenders. Why do you suppose every lender has more or less the exact same rates? Their differences are in closing costs, origination fees, points and things like that. The actual interest rate is not up to them to set.
Nice try though, you get a solid B+ for effort and trying to think through the problem which is more than I can say for the majority of the hysterical posters here.
anon: said
Yo, Joey.. what is the average income in southern NH
I think its about $17-18 K,
Are you high? 2006 median income for a family of 4 in NH is $79,000. California is $67K.
Nashua's median income is $68K. LA's is $54K. And NH has no income tax and no sales tax meaning that $68K is worth $80K in LA after taxes.
-----------------------------
Perhaps there are 3-4 CEOs that have ‘addresses’ in NH due to the Tax benefits, this brings up the median income numbers, just like housing..
The average NH resident is lucky to earn 18K a year.
Perhaps there are 3-4 CEOs that have ‘addresses’ in NH due to the Tax benefits, this brings up the median income numbers, just like housing..
The average NH resident is lucky to earn 18K a year.
You are an idiot and have no idea what MEDIAN means. Lemme esplain it to you so you don't sound so stupid next time.
What your little brain was trying to say AVERAGE might be skewed due to the evil CEOs. Median however doesn't get affected by a few at the top. MEDIAN income for a family of 4 in NH is $79,000. MEDIAN income for Nashua is $68,000. That measn 1/2 make more 1/2 make less. Whether the few evil CEOS makes a gajillion a year or not makes no difference.
Here is an example that your little renting brain can understand:
Bill makes $85
Joe makes $100
Mary makes $120
Kim makes $122
Dale makes $123
Don makes $125
Kyle makes $127
Median is $122, ie 1/2 make more, 1/2 make less.
Now 2 CEOs move in and they each make $100,000,000,000,000 raping and pillaging poor socialists.
Median is now up to 123, again 1/2 make more and half make less. Get it now renter?
tabby kicks greg i mean the albino square in the nuts
smack down tabby
"I see you have fallen in a common trap. You assume foreclosures sell for 50% off. They don't Do some research you'll see that foreclosures sell for pretty close to FMV, within 10% usually. So OK 5% of homes foreclose, sell for 10% less than FMV, meaning home prices fall 10%. Not great, not a catastrophe either."
I don't buy this logic. I think a large number of foreclosures can impact fair market value such that foreclosures and non-foreclosures need to be priced lower and lower to sell.
It's a vicious cycle. Where will it stop? 10% lower? 20%? It was a virtuous cycle that resulted in the increases so why couldn't the correlative cycle be equal?
Not that foreclosures are the only element putting downward pressure on prices.
at the mean time
tabby is chewing gregs i mean albinos chest looking for a heart
gregs i mean albinos mouth wide open
Anonymous (Friday, February 02, 2007 12:15:38 AM)said...
"You assume foreclosures sell for 50% off..."
OK, now you're trying to put words into my mouth. I said that prices at the margins (foreclosed houses) would make un-foreclosed houses worth less. I didn't say they would be worthless. It seems that it's you who is making the assumptions here.
"...Do some research you'll see that foreclosures sell for pretty close to FMV, within 10% usually..."
Let's make some assumptions here (you seem to be comfortable with them). Assume that not all of the foreclosed houses come on the market at once. Let's pick the arbitrary figure of 1% of all houses are foreclosed in a year. Let's also assume that a foreclosed house sells for 10% less than FMV. (I believe it to be much greater difference than that, based on the short selling I've read about) The first year, the FMV of the un-foreclosed homes will fall by 10%, to match the prices of foreclosed houses. This makes the reduced prices the new FMV. Repeat for 4 more years, and tell me how much prices have fallen.
I'll do it for you.
year 1 = 100-10%=90
year 2 = 90-10%=81
year 3 = 81-10%=73
year 4 = 73-10%=66
year 5 = 66-10%=59
Assuming all other things stay the same, the foreclosed houses will have the effect of reducing FMV prices to 59% of what they were prior to the rash of foreclosures.
Have you given any thought to what might happen once upside-down homedeptors see house values falling, and realise they have no hope of rising prices pulling them out of debt? I suspect they'll either hand the keys to the bank, or drop their asking price for a quick sale.
It's going to be a bloodbath.
PS: It's you're not your. If you're going to scold me, at least have the decency to use proper grammar.****
Hey Assclown, it's guys like us who are f*cking your wife while your out earning that high income. Woman only want losers like you for money. They come to us when they want to feel like woman and be satisfied. You are a freaking liar and and probably a closet6 homosexual.
How was that grammar?
@anon 7:09:52 et, al-
***Emergency Announcement***
The sky is not falling. Your equity is safe. The new asset paradigm is secure.
That is all.
Wow, Keith. The troll(s?) on this post are making the point of the post for you, aren't they? Ironic. The obvious question, with maybe an obvious answer, is what is/are these troll(s) doing reading your blog? The self-assured homedebtor smugness of 2005 seems to have turned into the homedebtor-desperately-wanting-to-remain smugness of 2007:
"It was $345K in 2000. Now it's $700K. That's how r/e works. You missed out. Sorry."
It's okay, I don't mind. The way r/e works going forward:
"One guy on my block sold for 700k after pumping in 50k for upgrades and 50k cash-back at closing. Boy should I have done the same, here in 2009 I'd be lucky to sell it for 350k. I so miss being all smug. Really, it was all I had. *sigh*."
Anonymous said...
The income limit for an IRA contribution is $70K. The poster said he maxed out his IRA. If that is your definition of high income, so be it. To me that is low income, middle income at best.
Hey genious, I wasn't talking about this one specific post. Please re-read.
PS: It's you're not your. If you're going to scold me, at least have the decency to use proper grammar.
You always know you touched a nerve when people fall back on spelling or grammar. Does this blog make you a little nervous?
Shakster said...
David in JAX said...
Anonymous said...
Hey Shakster. I hope you're not throwing me in with this Anon. I'm trying to suggest NOT tearing people down because of income.
"Not EVERYONE is screwed. MOST people are just fine. "
True, but... Do all home owners have to be screwed for the global credit bubble to crash? Is the economy truly healthy, or has it been propped up by a combination of liqidity and foreign investment?
What about the trillion dollar war? What about derivatives and collarteralized loan obligations? What about the inverted yield curve?
No one knows with certainty how it's going to play out, and you could make the case the world-wide RE bubble won't have a big impact on the overall economy. Are you saying, because you are OK, that a strong economic downturn is impossible? That boom-bust cycles of the past are not likely to apply to the present one?
Buyers in 2000, you're sort of out of bounds for current discussions. When I speak, I am considering those who are ready to buy thier first home and have the option of rent or buy. Too many parties out there want your money and they will try thier best to market it out of you.
When rent was similar to mortgage payment, of course you buy. Today, you may see mortgage and taxes reach 4-5 times what you can rent for. Now its a no brainer. I simply see renting as the better option. Save money, which is equity, and have the bank GIVE YOU 5-6% back on you money. If you buy, you pay 5-6% in finance charges and you dont own the house until your debt is settled.
I feel that renting and saving will enable you to have a large down payment when you are ready to buy in a few years. Also, 100% of your deposits is 100% yours, plus interest! Imagine that.
I don't suppose you'll find information like that on your local www.realtor.com site under financial strategies. If you do please share.
anon said:
You are an idiot and have no idea what MEDIAN means. Lemme esplain it to you so you don't sound so stupid next time.
What your little brain was trying to say AVERAGE might be skewed due to the evil CEOs. Median however doesn't get affected by a few at the top. MEDIAN income for a family of 4 in NH is $79,000. MEDIAN income for Nashua is $68,000. That measn 1/2 make more 1/2 make less. Whether the few evil CEOS makes a gajillion a year or not makes no difference.
---------------------------------
Look mister,
You can go on name calling, twisting the numbers so they add up to your FB way.
Fact still remains, overwhelming majority of citizens of the state of NH,
have a gross income below $25K and the average income is approx. $17-18K
I know… I live in Keene NH.
Like the rest of the Country average person cannot afford an average House.
So who’s buying ?
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