March 20, 2008

Now is NOT a great time to buy a home. Freddie Mac CEO thinks prices have much, much, much further to fall

"We have absorbed a little more than half of the expected losses in the housing decline. We have seen only a third of the housing price decline that we expect."

- Freddie Mac CEO Richard Syron, March 2008

20 comments:

Anonymous said...

When he is saying that, imagine what will really happen. I smell way worst than that.

Dny

LauraVella said...

The average house should only cost 2-3x income.

We're being prepared for this major event.

million said...

and yet the GSEs feel the need to re-finance $200 billion worth of stuck home-debtors.

just piling on the inflationary bailout.

Anonymous said...

One of my co-workers just bought a house. It was built in 2005 and sold for $435K. He bought it in foreclosure for $275K. That's a 37% haircut from the peak. The other FB's in that neighborhood must be crapping in their pants.

Happy Homedebtor said...

Yeah, 80% off right guys? :P

If it does, the entire global financial system will collapse. :P Good luck with that...

Anonymous said...

I heard on Bloomberg this morning that Bernanke bought his DC 4 bedroom house in 2004 for about $800k, and that his house is worth a lot less now. Didn't he know there was a housing bubble and bought at peak? Helloooo??? Is this the right guy to run the Fed?

Someone dig the details up so Keith can make a thread. I'm google lazy today.

k.w. - southern ca. said...

Just wait till someone new comes into the neighborhood and picks
up one of these over-priced shacks for $100K.

Don't believe it? Just wait till after the election when the cr*p really starts to let loose.

We had a bunch of greedy buyers and sellers these past few years who have literally out-priced themselves.

~~~~

One of my co-workers just bought a house. It was built in 2005 and sold for $435K. He bought it in foreclosure for $275K. That's a 37% haircut from the peak. The other FB's in that neighborhood must be crapping in their pants.

Anonymous said...

tell that to the Greedy Sellers!

Anonymous said...

Anonymous said...
I heard on Bloomberg this morning that Bernanke bought his DC 4 bedroom house in 2004 for about $800k, and that his house is worth a lot less now. Didn't he know there was a housing bubble and bought at peak? Helloooo??? Is this the right guy to run the Fed?

Someone dig the details up so Keith can make a thread. I'm google lazy today.

March 20, 2008 3:53 PM




He knows the bail is comming! He has his hand on the bucket!

Anonymous said...

"Yeah, 80% off right guys? :P

If it does, the entire global financial system will collapse."

It already is, you stupid idiot!

Anonymous said...

"The other FB's in that neighborhood must be crapping in their pants."

Happy Homedebtor sure is.

area 51 said...

Famous Last Words From That Story:

Mar 12
"Freddie Mac, the second-biggest U.S. mortgage-finance company, said it has sufficient reserves and won't cave in to requests by the Federal Reserve and U.S. Treasury to raise more capital at the expense of shareholders.

``This company will bow to no one,'' Chief Executive Officer Richard Syron said


But wait a minute....part of the govt. deal to lower capital requirments is they HAVE TO RAISE CAPITAL.......

1 week later.........

"As a key part of this initiative, both companies announced that they will begin the process to raise significant capital."
--Seeking Alpha

"(WE)..WILL BOW TO NO ONE."

HAHAHHAHAHAHAHAH

Anonymous said...

>> stupid idiot

Isn't that sort of redundant, you stupid dumbass?

Anonymous said...

Kind of offtopic question, but what will happens when its more expensive to rent than buying and when an apartment costs about 20 years of income?

PJ

Anonymous said...

Fall baby fall!

Anonymous said...

I don't understand how housing prices will come down. I put an offer on a house this past week. It is an estate home, and a complete gut job. The asking price 425k, I offered 365k knowing it will take another 150k to get the house livable. The sellers came back with a "full price" counter! They won't budge on the POS. I would think in this market the sellers would at least make an effort to negotiate. I do live in a "desireable beach town" if that makes a difference.
So, is it possible that real estate is local and some areas are just bubble proof?

redondo_beach_dude said...

"I do live in a "desireable beach town" if that makes a difference.
So, is it possible that real estate is local and some areas are just bubble proof?


This from another post re LA Times several months ago:

"Regional economists say it is typical for prices to remain stubbornly high well after a sales decline, marking the beginning of a down cycle", said Ed Leamer, director of the closely followed UCLA Anderson Forcast in an interview last week, and that the 1990's trend was a classic example. Los Angeles-area sales totals fell by half from November 1988 to March 1991, while home prices continued to rise until June 1992, when prices began a long decline."

I believe they bottomed out around 1996 - four years after the long decline began. If the timing is the same this time, that would take us out to 2010 or so.


Being in Redondo, renting, watching the listings come and go. Some sold, most listed and taken off, many listed and reduced over and over as new listings. Markets are complex, seemingly living and breathing, always in flux. The most desirable areas like the beaches will be the last to fall, as these homes are owned by those least affected by all of this... but fall they must. In ALL real estate downturns, the priciest zip codes eventually fall an equal percent as everywhere else in the area.

Anonymous said...

Thanks redondo. That explains the craziness in prices here still, but it is nice to hear that this town too will become more reasonable eventually.

Anonymous said...

>>>>The asking price 425k, I offered 365k knowing it will take another 150k to get the house livable. The sellers came back with a "full price" counter!<<<<

I'd counter with $250 and laugh my ass off as I'm signing the papers.

Anonymous said...

I call bottom