March 26, 2007

HousingPANIC Stupid Question of the Day

How much did all the subprime and "liars loan" Alt-A buyers artificially inflate housing prices the past few years?

5%?
10%?
20%?

And who's gonna buy all these damn houses now?

33 comments:

Anonymous said...

Tough to say, but it sub-prime/Alt-A kept the bubble going for another 1-2 years then I'd say they were responsible for a substantial portion of the above normal appreciation the last two years. No precision here but I'd venture to guess that would peg it in the 20% range.

Uncle Al said...

People who were willing to use these extremely expensive loan products were probably also overpaying for their homes -- 20 pct or more.

cow_tipping said...

Try 200%.
Cool.
Cow_tipping.

Anonymous said...

I'D SAY 50%

Anonymous said...

Pit said:

I'm following the markets since 1998 and I have never seen more BS headlines on AP:

New-home sales unexpectedly decline in February to seven-year low.
U.S. Jan., Dec., Nov. new-home sales revised lower

U.S. Feb. new-homes sales much weaker than 1 mln expected

Home price slide continues but sales pick up

Home Resales Rise

Existing-Home Sales Jump

What the BS is this?

Anonymous said...

Nowhere near as much as 100% loans with the closing costs added to the sales price over and over again in each neighborhood...

Mort said...

And who's gonna buy all these damn houses now?

HPers will buy 10% of them at fire sale prices, the rest will sit.

Anonymous said...

Huh? Prices jacked 100% and more in a matter of a year or so where I live.

Anonymous said...

nyc real estate is bullet proof

Anonymous said...

I don't think there is any way of really telling until all of the excesses are wrung out. IMHO, it will be an exercise of "who shot John" that can only be told afterward.

Smug Bastard

Anonymous said...

Easily 50% in Southern California.

FUNNOMINAL said...

I think most real estate will sell at l/3 the price that was asked in 2005.

Anonymous said...

Here in the DC Metro area a drop of 50% would be required return prices to the historical mean. It might take some time because everyone thinks "its different here" with the gov't teet, but that will be gone soon, and it will happen. It's only a matter of time.

At least 5 TH's went up for sale this past weekend in my neighborhood of about 80 townhouses. I expect that it will only get worse.

Anonymous said...

I'd say that 120% isn't a bad guess assuming that many buyers had no intention of paying it off... thus, if the house was worth 50% of assessed value, then I get 70% overcharge.

Anonymous said...

taXES JACKED UP EQUAL #

Anonymous said...

http://efinancedirectory.com/
articles/90_Percent_of_Appraisers_
Feel_Pressure_to_Inflate_
Home_Values.html

Interesting article about appraisers being pressured into inflating home values.

I forgot why I'm supposed to buy a house. Can someone help me remember?

Frank said...

I was living in Scottsdale, AZ at the time where it was easily 50% or more.

GreedKills said...

50%

the downside may be worse.

Who's going to buy them when their cheap?

probably not me.

I'll buy again when they are cheap...AND the social unrest that we know we will be facing comes to an end.

Anonymous said...

prices are what they were a year ago here. lots of homes for sale but the sellers aren't budging on price. it's a staring contest right now and my guess is the sellers will blink first. but i've been saying that for 12 months and it hasn't happened.

Anonymous said...

I hear there is a lot of fraud by Appraisers, who under pressure by realtors, etc, are jacking up the value of homes. No sense in buying, cause can't trust anything/anyone in the transaction.

Anonymous said...

I went to look at some rentals in Summerlin (Las Vegas) over the weekend. New homes about 2400 to 2800 sq ft, 3 stories with small yards but pretty cool homes and some overlooking a golf course.

I'd estimate there are 100 homes finished in this subdivision and 30-40 being built or in the planning stages of being built.

I counted 9 for sale and 7 for rent out of the 100. Prices last year were going for $545K and up pre-construction. The ones for sale that had a price displayed were $465K to $499K. Ouch!!

Rents asked were in the $1800 to $2300 range. Buying today with $0 down and 6% rates, monthly payment would be $3000. Add another $200 HOA, $300 property taxes and you're looking at $3500 a month.

$3500 to "own" vs. $2000 to rent....damn it's gonna be a tough decision!!

Anonymous said...

Anon 9:23 you did the correct analysis. If the rent doesn't cover the mortgage, taxes and insurance it's not a good buy.

If you pay more than that you better really like the house because you are paying a huge premium with no safety net of having the rent cover the expenses if things go bad like they are now.

Anonymous said...

Summerlin is very nice.Way too many houses vacant though.I wouldnt buy anywhere near Vegas.I always go there and I always check out the RE and it is extremely overbuilt.I was there a year ago and one of the Summerlin townhouse projects was just finished,they were way overpriced with alot of homes with the cheap little for-sale-by-owner signs in the windows.LOL!Let ask $250,000,no lets make a little more and ask 300,000,no no make it $350,000.It was crazy.How about $125,000 and you pay closing cost.GEESHHH!Nah forget it,thats too much.HAHAHAA!!!It is gonna be ugly!

Anonymous said...

40 to 50% in so cal. EASILY!

Anonymous said...

Orange County, California is the epicenter of most of these loans.

Why OC is such a hot place to live:

1. OC is the swinging capital of America. Yeah, baby.

2. OC is the land of the hot plastic Coto housewives. Bag 'em, Charles, bag 'em.

3. Irvine is the land of the hot Korean mama driving her MB on her way to her nail appointment. Asian rush, baby.

4. The Santa Ana freeway goes through much of Irvine. A parking lot from 230pm - 630 pm daily. Road rage, baby.

5. Irvine was recently rated the 4th safest place to live in the US.
This is why it is expensive. St. Louis the worst.

OC has high road rage incidents, those are not reported.

6. Irvine is hot, hot, hot...you melt during the summer. Good luck finding relief. All homeownder association pools are packed beyond the imagination during the summer.

7. Realtors in OC need to eat. Pump up the prices, baby. Make up the numbers, sweetheart.

8. The 90's were an interesting time in OC. Filled with homes that look so beautiful in the sunlight. Stucco delights abound. Fantastic HOA approved colors...beige, blue, green.

9. Good schools. Your kid gets beat up four times vs. six times a year.

10.Come on, we celebrate the birthday of an imaginary rodent (George Carlin.)

We have been disneyfied by the mouse, we are lost.

OC Lover

Shakster said...

Was that the the dreaded Devil Formantion I saw in the housing charts next to the MACD,and double tops over at Mishs? OHMY GAWD !Everybody SCRAMM!!WAHahaaaaaaaaahhhhhhhhhh!

Anonymous said...

I'm really shocked that you're only choices are 5,10, and 20%.

You've been outside of the States too long Keith. Remember? This is the place where housing has ballooned 200- 300% in many areas in the past 10 years!

5-20%???!!! you have GOT to be kidding me!

Anonymous said...

i have seen associations that required only cash buyers that seemed to be selling 90% down. nice if your taxes are assessed on comps and you were not a flipper or "infestor", and were aplanning on long term ownership or were a long term owner, and were content with not selling or moving

Anonymous said...

then again there is the neo governmental association dictates and expenses and an ownership" right",by ballot theory...

Anonymous said...

50%

Anonymous said...

Downside 100% +

Anonymous said...

You will get a 30% drop in most bubble areas and than a slow additional 20 % in some areas. Certain houses will drop more than others and foreclosures could go really low .

Anonymous said...

here is a very good examle for everyone to have a feast on:
http://avenue-s.org/flashfraudalert.htm
we tracked this speculative frenzy since 8/2006 in Littlerock, Ca. and now we can see the aftermath which at present time I am hurriedly trying to piece together. $200,000.00 properties sold for up to a million!!! even investors in the firewood and toothpick industry would not take a second glance...