There are millions of unwanted, for-sale, wildly overpriced homes in America today. Many are in foreclosure. Many are owned by flippers and fraudsters. Many are sitting empty. Many are owned by regular folks just trying to get out, or into a new home.
In addition, sub-prime has completely melted down, severely limiting the buyer pool (including the fraudsters).
And every sane person in America knows there was a housing bubble, which ended in 2005, and that we're in a housing crash or "correction" now.
So my question, my simple question is...
Who is going to buy all those damn homes?
Oh dear god is this going to end badly.
February 23, 2007
HousingPANIC Stupid Question of the Day
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49 comments:
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Kieth,
I think I have the answer to the nations homeless problem.
Chinese have to spend that trillion bucks somewhere.
JAFO
"Who is going to buy all those homes"?
The HP's of course...
In 2020
I'd be happy to buy some of them....but not yet and not at current prices
Well...let's look at the numbers
69% homeownership
13% poverty rate.
ummm...the other 18%
But...the even bigger question is...
How much of that 18% is *just above poverty levels making $6-10/hr?
Centex is experiencing a wee bit of trouble in Daytona Beach, Florida.
Choice quote:
Vice Mayor Jon Netts said the [unfinished] golf course now resembles "Chernobyl" because of the company's sudden decision to delay construction.
"There's a wasteland in the middle of our city," Netts said. "That's just not acceptable."
Anyone shorting Centex?
there is a price at which anything sells. (i'd say 50% off in LA) Phx probably about 60-70% off
Fire sale prices for the Chinese. Invasion of our country by our own manipulation. Damn they're good. But then again most Americans are asleep anyway.
My bet would be on Realtor Co.'s. If housing is such a win win, they should have no problem investing all of their capital in housing. If they don't I would be very cautious as to why.
ALL THOSE ILLEGALS THAT BANK OF AMERICA IS GIVING LOANS TO. I WAS THINKING WE SHOULD JUST GIVE CALIFORNIA BACK TO MEXICO.
Small Hat
Oh the realtors are going to buy all the houses. And at 2005 prices too. You know right, realestate never goes down. Yea.
Cool.
Cow_tipping.
I'm here just west of Ft Lauderdale, and homes are still selling although about 25% less than last year and with prices having fallen on average about 15%. I think people here are buying and putting all of their money into the houses believing that in a few years the can make a big profit. I talk to a lot of people who still sprout the realtor lies that helped full the bubble.
1. There's no more land.
2. RE always goes up.
3. 1000 people a day move here.
4. The rich baby boomers will all want to come here.
5. California prices are higher (imply S Florida equal Calif)
The Chinese are going to move 200+ million of their people here. Brush up on your Mandarin.
Tamoili said:"Fire sale prices for the Chinese. Invasion of our country by our own manipulation. Damn they're good. But then again most Americans are asleep anyway".
Not even the chinese will want to buy houses when this thing completely blows-up. Most of the sheeple will be focused on a different type of bubble.
Welfare departments nationwide will be seizing abandoned properties for Sec 8 housing. Gotta house those FB's who just joined the welfare ranks somewhere!
I'm going to buy. My realtor says now is the right time.
Subprime has melted down lol? Who here with a 580 FICO and two year job history wants a zero down, 6% seller concession loan? Anyone with the loose requirements above, that dti's under 50% total, can still get one. Untill these kinds of programs go away, we will always have idiots buying over-priced homes.
MY REALTOR SAYS PRICES WILL NEVER GO DOWN IN SEATTLE
I have a buddy moving to Philadelphia, the ONLY mid-Alantic market to show 0% adjustment thus far. He and his wife have been longing to get out of apartmentland and get on with the fun part of buying their own house. They won't be needing much of a mortgage. They found a place they like, so I suggested low-balling. We'll see how it goes, but there's one example of a couple who are tired of waiting and had a forced move. I have a bad feeling Philly will ultimately re-adjust, but their attitude is "take the plunge and never look back".
I WILL, KEITH!
I'LL BUY ALL THOSE HOMES!!!!
Of course, I'm going to buy them all for pennies on the dollar when the time is right!
...waiting patiently...
Got gold
Brokersleaveyoubroke,
You are dead wrong on this one. ANYONE can still get a zero down loan, fixed for two years, amortized for thirty if they meet the very loose requirements I outlined in my above post. They only have to bottom dti with the fixed term to qualify. And yes, no doc and IO loans still exist, though maybe not together.
I agree with most posters here on this subject. There are plenty of buyers for all those homes despite the buildup. The price, however, is what is in question.
The price of all those homes will be determined by what people can afford, what people can get mortgages for. A large portion of suckers vulnerable to the appeal of a suicide mortgage (io, option arm) have mostly already bought their homes and are now being foreclosed on - they won't be buying another home soon.
Everybody else will have to pay for homes with their actual incomes. They will only get mortgages they can afford. That's one of the fundamentals of real estate that has been on hiatus over the last 5 years. Price to income ratios will return to historic norms via dramatic price reductions.
All homes find buyers. But at much lower sales prices.
I'm going to buy them for peanuts. That's why I sold mine at bubble peak and am comfortably and patiently renting until the s*** hits the fan. And if the real estate clerks are thinking that they will make any money when I buy, I've gotten news for you: I'll by FSBO only because there's an ocean of options out there. We don't need those paper pushers to buy a home anymore.
Man, it's so easy to spot the trolls on this blog, isn't?
"The rich baby boomers will all want to come here."
I just spilled soda on my keyboard. If there's a lie, that one tops it off. "Rich baby boomers", oh yeah, that's a group who's swimming in money. Check these graphs out:
http://tinyurl.com/2quby2
Stuck in SO PA said:"Welfare departments nationwide will be seizing abandoned properties for Sec 8 housing. Gotta house those FB's who just joined the welfare ranks somewhere"!
I would have to agree with you PA. Have to house all these bankrupt/forclosed people somewhere.
Anon said:"I have a bad feeling Philly will ultimately re-adjust, but their attitude is "take the plunge and never look back".
They all say that until they see a neighbor buy the same size house for 1/3-1/2 price less.
You assume that people know. I just talked to a co-worker who already bought a new house and hasn't even put her current house on the market yet. Most people are clueless. They still claim that buying is ALWAYS better than renting no matter what! I can run the number by them about the utilities, taxes, upkeep and everything - it doesn't matter.
The chinese are not stupid. They will spend their money more wisely than on overpriced crapbox houses, hummers and plasmas. That money will be spent on raw materials to upgrade and update their infrastructure while ours is falling apart. China and India are the new superpowers. The West is old and dying out due to self-hatred and guilt.
they think the worst is over because Ted Kennedy is introducing a new Senate bill to legalize 30 million uneducated illegal aliens and allow them to bring their immediate and extended family to the good old USA. This will signal that the floodgates are open and China, Africa and India will begin to load up the boats and ship their poor and uneducated masses over here to be taken care of. Expect the population to hit half a billion in 20 years. Los Angeles will look like Mexico City with roving gangs of kidnappers. Drug lords will rule the streets. The 20% that make up the educated middle class will live behind gated compounds. The wealthy will have fled with their loot - Caribbean, Switzerland, Thailand. America will be a cross between El Salvador and Bangladesh. Houses will be worth $2 million, but a loaf of bread will cost $10,000. Remember, housing always goes up.
I'll take a couple McMansions for 10 cents on the dollar and not a penny more.
I'm still seeing those DiTech ads for no doc loans here in So Cal.
DiTech is a GMAC company. I'm just sayin' is all so you know what to short.
Hey now... I know a rich baby boomer- and a hundred poor ones!
Seriously, why the heck do people listen to realtors? as a group, they have got to be about the dumbest.
Ummm.. are 1000 people a day still moving to FLA?
Is RE still going up?
Are those rich 40K/year Microsoftees still holding up the Seattle market?
Have we run out of land?
Hadn't you better buy now before you're priced out forever?
Won't all those government jobs save DC?
Doesn't everyone want to live in CA?
Just remember, if housing were a good investment the government wouldn't be giving you a tax break to get you to buy a house.
Sally said:"You assume that people know. I just talked to a co-worker who already bought a new house and hasn't even put her current house on the market yet. Most people are clueless. They still claim that buying is ALWAYS better than renting no matter what! I can run the number by them about the utilities, taxes, upkeep and everything - it doesn't matter".
Exactly Sally. Thats why I wont bother trying to convince anyone there is a bubble. They wont listen to logic. Its scary we are in the minority that know something is very wrong.
There will be many homes for sale and only us bloggers will be the buyers.
Anon said:"The chinese are not stupid. They will spend their money more wisely than on overpriced crapbox houses, hummers and plasmas".
Agree to disagree. Not all chinese are smart savers. The homes in the bay area are still selling. The chinese are buying them, remember they love to gamble! Our Alameda home just sold again. Its a small cottage on a busy street- it's all of 984 square feet, 2 bed/1 bath sold again for 599K to a chinese family 3 months ago.
This is not ment to sound bad, but I have to say,out of all my chinese friends, only 1 is a conservative saver. The rest have bought homes, and re-fied and bought second homes and enjoy life to the fullest, regardless, none of them have a clue as to how huge and destructive this bubble will be. I keep my "negative" thoughts to myself now, and only post them here with people that understand whats happening.
Anon said:"Los Angeles will look like Mexico City with roving gangs of kidnappers. Drug lords will rule the streets. The 20% that make up the educated middle class will live behind gated compounds. The wealthy will have fled with their loot - Caribbean, Switzerland, Thailand. America will be a cross between El Salvador and Bangladesh".
------
We'll be just like France.
Anon said:"DiTech is a GMAC company. I'm just sayin' is all so you know what to short".
Dont let GMAC "bank" lure your money into their 5.15% MM or CD. Even with "insurence" why trust a sub-prime lender with your money?
Agree with anon-It's better to short'em instead.
I think housing is going to be "the bad investment" - just like gold was the "bad investment" from 1980 until 4 years ago.
There is a bull and a bear market for everything. Just learn the cycles and you will do well.
All of the war refugees are gonna need to live somewhere, when the government promises them free housing for life, with the bilions of cash they are spending in Iraq.
Well, I'd like to buy a house. But the MORONS bid prices up, up, and away. So now I'm waiting for the firesales. I won't buy until the great crash comes in forced liquidations, and then I'll be calling the shots, not the irrationally exuberant.
When the thought of owning a home makes people vomit I may buy a couple.
Re Greedkills comment: February 23
Exactly so.
And further. The figures for poverty are such that help is needed in some form, ie
food stamps, low income health
care and yearly energy assistance to keep body and soul alive.
I believe if the poverty line were drawn at the point at which one could rent the most modest residence in one's area and NOT require additional subsidy,the
poverty percentages would be
considered much higher.
PKK
To Lauravella-
No, the government won't be buying
the houses up for Section 8. Though the Section 8 program is government funded, the actual houses rented
through the program are privately
owned, and a contract is signed
between owner and S8 for one year's
lease at a set amount. Renter pay's their share of rent prorated on income. I know someone who works for S8, and the enrollments are largely closed, number of rooms being allowed being downsized,and
amount paid is less. My guess is
the program is gradually on it's
way out. No rescue there.
I believe it is because there are
less funds, and property owners
have priced themselves outside
what is reasonable.
It is true that S8 benefitted low
income families, but it was also
a great boon to investors.
PKK
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