What percent off of the highs would entice you to start looking to purchase a home or real estate in your area?
April 02, 2008
HousingPANIC Stupid Question of the Day
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A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.
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132 comments:
65
60%
50 on Long Island
25-30% Metro DC/NoVa. For a 2k sq ft TH w/ a garage that would be a drop of ~150k putting them in the mid 300k range off their highs of over 500k
Prices in my neck of the woods are down 15-20% which was my initial price decline entry point.
Now that it's here I'm not even sure if I want to buy again. This past year has been great renting. Furnace needed fixing, I called the landlord. Fridge broke, called the LL. Pool gets cleaned once a week and I pay $0. This fall, the pool got some nasty algae, I made a call to the LL, $800 later (I saw the bill from the pool service company) it was taken care of. Lawn gets chemically treated every few weeks, I pay $0. Same with pest control, termite service, etc. All that shit costs hundreds of $$ a month just for maintenance. Add in property tax, city and county of $400 a month and I'm 1/2 way to my rent without paying a penny in mortgage.
And money aside, life is easier as a renter. When I owned my house it seemed like I was always doing something house related. Since I've rented I've been to Home Depot twice.
50% Upstate NY
About 50%
depends on what we're talking about here in the greater Seattle area. A rare listing may be only 20% overpriced. New condos...50% minimum.
Here in Fairfield County, CT, 50 % sounds about right
start looking when asking prices are 40 from peak
70% off especially in Whitestone/Bayside area of NY
20%
Prices are still going up here.
In Minneapolis, a house listing for 150k will have to drop to 100k.
33%
50% from here. Probably about 60% off the high.
40% in NJ
condos need to get down to 300k or so in sf bay area, so that's around 60%
40-50%, in NEPA. By June, we should be there or damn close to it.
I could buy my old house back, totally renovated, for less than I paid for it back in 2003 once it goes into foreclosure. Which it will. Because they buyers are way underwater and actually MADE 600 bucks when they closed on their no money down loan. That they couldn't afford, but did anyway. Sound familiar????
50% Bergen, NJ
Here in NYC/Long Island: $250K for a starter home would be a good price. That would mean 50-60%.
WE DON'T NEED ANYMORE RED TAG SALES!!!
WE DON'T NEED BAILOUT BEN!!!
WE DON'T NEED PAULSON STUTTERING ON CNBC!!!
WE NEED CONVOYS OF BLUE LIGHT SPECIALS!!!
WE NEED HANDCUFFS!!!
WE NEED FROG MARCHES!!!
WE NEED MEDIA SPECTACLE TRIALS!!!
WE NEED MORTGAGE COMPANY HUSBANDS IN JAIL, AND RICH WIVES CRYING BECAUSE THEY'LL SOON BE PENNYLESS!!!
WE NEED REIC ECONOMISTS IN PUBLIC SQUARE STOCKADES FOR THE KIDS TO LAUGH AT!!!
WE NEED SOME MUTHAF#CKERS TO GO DOWN!!!
DOPES!!!
My area didn't peak until Dec '07. Lehigh Valley Pa. Up 70-100% in past 6 years. 20% would return normalcy. Looking to buy in Phoenix and waiting for 2002 pricing which means 50% from peak. So far I'm seeing 35% in the outlying areas. Scottsdale is still around 100% over 4 years ago. Ridiculous pricing a 1900 sq ft 30 year old house for over $400k.
I'm already looking.good luck renting forever, losers I tell you.Are you stil playing video games in the basement with your blow up doll patches?
good morning HP
stocks are up
gold is down
bailout is here
once again hp losers lose
DOLTS
DOPES
FOOLS
take your pick
20 - 25% in Eastern Massachusetts.
There is some legislation being proposed to give buyers up to $15000 in Federal Tax Credits spread out over five years if they will "do the Dew" and buy a shack. This is not a new idea b.t.w. It was used back in the 70's to try to boost home sales and the amount was less. Couple that with maybe a 10 year property tax abatement on a shack from the municipality where it is located (St. Louis is doing that for some houses) and those incentives can sometimes sway a fence sitter like yours truly. But, for me, my sniffer senses blood in the water and we are in the early innings of a nine inning contest. I think I'll take my sweet ass time. Don't tax me, don't tax thee, tax that fellow behind that tree....
Smug Bastard
Central Maryland:
35% off of the peak will be about right, I think.
40-65%, depending on the neighborhood, in NoVa. Anything above that, screw it.
40%
80%
40% would do
120% in SoCal
Richmond, VA
35-40%
Where I'm at now?
Sh*t, then it would have to be like 90%....
35% real dollar
naz up 1%
booyah morons
Housing prices have come down an offical 21% here in San Diego from November 2005 highs. . .at least another 15-20%. . .considering at even FOUR times salary 68K x 4 = $272,000 the average house will still have to fall 25% more (currently at 417K) to be within reach of the "average" household income (allowing for a mutiple of better than the usual 2.5) (hey, everyone wants to live here). . .math doesn't lie - so 25% it is.
50% in Calgary.....down 10% so far.
30 - 35 % in MD (we are at 15-20 % now - for most listings). I just sold my condo for about 15 % down from the peak . Condo has almost quadrupled since 2000...
I think we would see market stabilize somewhat this summer . However , there would be huge down pressure starting August .. I hope to buy something by end of 2008 - begging of 2009 .
There are a lot of knife catchers out there .. People who have no idea of what prices should be and f... realtors push them to buy .
Area 51 beat me to it. I wonder if he is in Florida too?
90% would work for me, but any purchase here would be an investment only.
Now find me something 50% off in eastern Tennessee, and we can talk!
Isn't this really a question of how big the bubble got in the HP'ers area? Would not all HP'ers agree that that we should hold out until the accumulation of a 20% down payment for a fixed-term mortgage on which the payments are within 1.2x of the rent being paid currently? Depending on the rate, the time elapsed for accumulating the 20% (or more), and the cost of rent who knows what my entry point will be?
Given that housing prices more than tripled (trebled for you Keefer) in the last 5 years then I'd have to say a 65% reduction would be fair to return to normalcy.
Consider this: CA is overdue for it's 100 year major earthquake. Remember the damage of the big ones that hit in 1805 & 1906 in San Francisco.
So ponder this: we have another major seismic event in CA. People are non or under-insured for earthquake damage. For the policies that exist they are backed by the state (funny, no money there) which will be backed by the Federal gov't (hmm don't see much money there either). So now you have a bunch of trashed houses. How many people are going to mail the keys then?
Sorry to get all doomer on you but the possibility is out there. As Buffett said, the last 3 years have been very lucky in the insurance biz and he doesn't expect this to last. Perfect timing, eh?
-BC
In DC at least 50% from peak. 65% would make things affordable to the average worker. That said, I am not in the business of providing windfall benefits to retirees, flippers and/or others who just happened to buy a home before 2001.
F you you douchebags and I hope your dog dies!
"25-30% Metro DC/NoVa. For a 2k sq ft TH w/ a garage that would be a drop of ~150k putting them in the mid 300k range off their highs of over 500k"
Dude, take a step back and think about what the fuck you are saying - 300K for a townhome that was overpriced in 2001 at 200K - for a FUCKING TOWNHOME! A fucking small ass townhome wherein you don't even own the property? You cannot do with it what you want. You have no yard or land. Oh, and you have HOA fees that will only go up over time!
Dude, you have completely managed to slide down the slippery slope.
Bucks county, PA, 45 cents on the dollar would get me to look.
Glut on the market and sales down 40% YOY Feb 2007/2008. Demand is very soft.
When I'm ready to move up to a nicer house, it won't really matter. The main thing is that there needs to be enough liquidity in the property market that I can sell my house to buy the other one. At the moment, its just very hard to get a grip on what prices actually are, since the transaction volume is so low.
Mid Hudson Valley NY
Its the P/E stupid
When the typical monthly rent amount in this area, can atleast break even with the monthly expenses
This means 60-65% below current asking prices.
.
So Cal 50% to start me looking!
.
to the same price as distressed in 2003, 100.000 hudson valley
Re: Central Maryland 35% and DCMetro 25-30%:
NoVa is 20-45% off already depending on how far you want to go. At least real sales prices. A friend has a nice start house in Arlington he can't sell to save his life because the prices are down from peak, panic is here.
Central-Maryland varies: PG I wouldn't touch because you will see massive catastrophe there due to the fact the county is...well, one giant ghetto. MoCo is 2 counties: you'll never afford the rich-old-white-people part, and as for the 99%-hispanics part...your funeral my man. AACO is a tossup depending on where you are. HoCo...I want to run the people there over, but my new car is much lighter/smaller than my old one so they may dent it.
Charles Co we're about 25% off from peak, so we should be done hopefully, so we're down about 10% from when we bought: tolerable since that'll be eaten in 3-4 years of inflation-level/historical-norm appreciation. If not - Angelo can have his keys. :)
i thought san deigo was dark dank and dirty.................
Reading all of this, you all want to make a national-median income for one of the most expensive areas in the country and buy a median home. HAH! You *do* realize median household income around here is in the 70K+ range? mid-high 80s for *Charles* Co, God forbid NoVa. Are you on crack? More proof that most of you are just self-entitled losers jealous that others can afford things you can't because you're too lazy.
The prices in SoCAl got sooo insane that they need nothing less than a totally insane drop. 65%, really. Tons of bank homed houses with mortgages even the top 25% of earners could not afford.
Prices are dropping but believe it or not some dolts are still thinking about buying/flipping. Lot's of knife catchers.
If you go to an auction you will get outbid by some yahoo with a semi-approved loan (that will die in closing). SOS, people with no money bidding up the price because they figure what the heck, if the bank will lend the money, I'll pay more. If the price goes up I win, if the price goes down I walk away.
We need another 6-8 months before all the knife catchers get their hands cut off, and then the market can truly start to correct.
It's sooo, expensive here. Housing prices are just one part of the problem. We always have the highest gas prices, electric bills never came down from the Enron scam (try $500 mo. for a McMansion), HOA fees $100-$300 mo., MELLO ROOS $100, $500 month tax bills, $5 milk, $4 bread.
Can't wait for the knife catchers to realize we are headed for another 8 years of declining then stagnant prices, ala-Japan.
As long as the mortgage payments are not inline with average monthly salaries, the percentage will need to drop further on house prices.
Heh, get a load of happy homedebtor. s/he/it is so happy that s/he/it is trolling housing panic. (snark, chuckles)
I think this pretty much sums up everything you need to know HP'ers
http://www.youtube.com/watch?v=uR88nKyKj3U
Gotta give it up to Rick on this one
I send my poor schmuck husband out each day with his little brown lunch bag consisting of tuna, crackers, ramen, and two quarters for his drink, so I can stand on the corner with my little brats waiting on our snobby, short bus to arrive each morning.
The phone never rings anymore at his RE office, so my earnings now top his. Even on a bad day, my client list would top his.
A douche and fresh panties by 3 PM and nobody is none the wiser.
Oops, gotta run. Doorbell. It's my 1 PM. He likes to call me Suzanne!
40%
Damn, I miss New Wave.
60% in Phoenix area...it is still way overvalued compared to the incomes that people are making in Phoenix!
In Orange County we're already at over 40% from the highs. Prices will come down to potentially half of what they are today so at least 60% for me (partially because I plan to buy a house in 1-2 years anyway, just to be able to have dogs, customize, etc etc rather than ride the crash out forever.)
% off in real money terms or % off in paper terms? If you mean paper terms, then you have 2 variables and your result will be meaningless.
I tapped the Easy Button from Staples for that one.
The nosedive will overshoot and prices will go back to 1998, especially with the mass unemployment coming up and tougher underwriting. Check the charts since 1998 and you'll see what I'm talking about.
If you bought a home since then and didn't get out at bubble's peak, like many of us with a working brain did, you're a fool who will get screwed for years to come.
It's not so much a percent as to be more worth it for me to buy than to rent. But I'd say probably about 40-50% - 2001 prices was the last time I could comfortably afford something - I just kept getting outbid back then. Don't think it would be a problem now. I've saved enough over the past few years renting that I could pay cash at 2001 levels and still have some leftover
Just wait for ALL THE ARM RESETS the inventory will get larger from here and FEWER PEOPLE WILL HAVE CASH AND OR CREDIT TO BUY.I predict up to 75% off in the bubbliest areas
Housing in Phoenix has dropped to a viable range and people are starting to buy en masse.
There is a great backlog of people sitting on the sidelines to buy and once the stampeed starts up, either run for the prize or get the hell out of the way.
This time, people have gotten much smarter and most of the speculators are hitting the short sale and foreclosure circuit.
The money to be made is mind boggling.
You may already be too late to get the best deals.
Get your financing in line, get a cup of coffee and get ready to rumble.
Don't wait for a specific percentage. That's dumb. Wait until the market has bottomed out and stabilised. This market is dead - there's not going to be any more speculative appreciation for A VERY LOOOONG TIME. So wait till things stabilize and then take your time shopping around for a good deal.
OH MY!
Dow is down 4% for the year.
What a crash!
face it losers you will be renters for life. enjoy the shithole 1 bed 1 bath, you will die in it
47% in Sonoma County, CA. This would line up with mid 2000 prices.
They are down 34% right now (with the properties I look at). And prices are not stabilizing as some HGTV posts are claiming.
Don't know.
My company downsized yesterday. Temporary workers were all kicked out, old people were made to retire under an absurd scheme were the goverment pays a portion and several more were fired.
50% off might seem tempting, but not if one becomes unemployed...
I paid off my mortgage so I don't really care if houses go up or go down.
But consider the costs of owning.
4600sq ft home on one acre in North Glendale, AZ.
Gated Community
Home Value 1.2M
These are just the basics to keep the property up to standard based on yearly average costs.
My property taxes are 3952.25 a year.
Insurance: 1854.00
Pool maintenance yearly: 1650.00
AC/Evap Cooler system yearly 1250.00
Landscaping, gardening: 1926.00
Alarm monitoring: 720.00
Sprinkler and underground drip system maintenance: 75.00
Utilities: 6200.00
Pest control 250.00
HOA 2400.00
I don't have a mortgage payment, imagine if I did.
Add it up, then look at renting.
If you can afford the upkeep, go for it.
If you cant, go rent.
40
I have almost stopped looking for a home that has not yet been foreclosed upon.
The owners are still in the mindset that their homes are worth A LOT MORE than they really are.
Bank owned (REO) PROPERTIES ARE THE WAY TO GO!!!
The banks are going to be dumping these properties soon.
The prices will be 50 to 60 percent lower than peak prices.
I went to look at a 500k home (REO)(peak price) that was for sale for 299K.
It was big and beautiful, and newer 2001 I think.
I would have made an offer, but I was not ready.
I plan to see many more homes like that one, with one exception, they will be much cheaper, much cheaper.
I will not buy a house unless I see a 50% haircut from the peaks, and it must be EXACTLY what I am looking for.
Reading all of this, you all want to make a national-median income for one of the most expensive areas in the country and buy a median home. HAH! You *do* realize median household income around here is in the 70K+ range? mid-high 80s for *Charles* Co, God forbid NoVa. Are you on crack? More proof that most of you are just self-entitled losers jealous that others can afford things you can't because you're too lazy.
-----------------------------------
Hey, the argument here is that home prices should match (2.5x-4x) the median income of the region they are in. It's ridiculous to expect that all prices would collapse to $100K or less.
Take for example Bethesda, MD:
(stats taken from trulia.com)
Median Household Income: $99,102
Median Sales Price:
(quarter ending Feb '08) $735,000
How's that for inflated prices. With that income a median home should be priced at no more than $400K!
More proof that you are a doomsayer, who wants the housing prices to stay high.
Ooops. I just fed a troll.
"electric bills never came down from the Enron scam (try $500 mo. for a McMansion)"
That's not that high. I pay in the $300 - $350 range for a 1950 sq ft house in the summer.
You Californians never quit with the complaining. Just STFU already. You don't even have the highest rates, not even close.
http://www.neo.ne.gov/statshtml/115.htm
keep renting, loosers
Even 50% off on avegrage price here would be kind of difficult, considering low wages and poor job security. It would be difficult but not impossible.
Somewhere in Europe
S. FL here.. I'll start to look when prices return to 1999 levels. We are about 2003-2004 on the retail side. Auctions are going for 20-50% off asking prices. Many are going unsold with NO bids. There is still a HUGE disparity between retail and wholesale prices. Add to that the amount of inventory, foreclosures, ARM resets, credit crunch, and economy, you have to be a total moron to buy now.
I am renting at about half the carry cost of owning, plus I didn't lose $100,000 in value over the last 12 months. You cannot drive down a street without passing a foreclosure or multiple houses for sale.
Go to foreclosure.com or realtytrac.com and plug in your zip code. You will be amazed.
Northeast 30% off the peak would get them down to just fair value based on incomes and rents
50% for the Westside of Los Angeles, at a minimum
The bailout is underway. The tax system favors home debtorship in America. Another $15K tax CREDIT for people to buy foreclosed homes, possibly? I'm afraid I'll be renting forever here in north Los Angeles county. Prices have dropped 20-25% from their 2005/2006 peaks. I haven't seen any major price drops recently and an increasing amount of homes closing in my area according to Zillow. This is a very nice area to live, I must say.
What can I say.... the rich get richer. And the poor, well, get to watch the rich get richer.
70-80%
why does everyone look at this as a "discount from peak" question? Take the comp price from 1997, adjust forward for inflation, and don't buy until it falls to that price.
50% minimum in WA state.
99% since I am a ruthless el cheapo hehehehe...
Look at the bright side of this whole housing mess. You could buy a house in the ritzy part of town for the same price you paid for a house in the junk heap part of town many years ago. Housing could go by the way of the computer; faster, higher quality (overall), and cheaper. (Too bad cars didn't do this.) Think about it. Get a McMansion with solar panels (or nuclear fusion reactor, your pick), a tungsten carbine frame instead of wood, cryofreezer style refrigerators, maintenance is minimal, and all 2500 sq ft is yours for only $13,000. What a deal, no?
Hey homedebter, there is no way in hell charles co has a 80k + average income. I've live in mont co and now in arlington co. Even these two high incomes places hover around 80k a year in median household income. Charles and Howard counties are not even considered DC metro areas.
I think the DC area will fall, by how much? How about take average household income and mutiply by 3. If this number match the average home price we are there. So DC, something like $170k, Arlington $250k, fairfax $300k, mont co, $270k, PG, $185k. These are the areas that touch Washington DC. The futher out areas will not command the average times 3 prices. More like average income times 2.5.
Something else to think about is HOA fees. In my building, a 700 sq ft condo, has about $350 fee, and the 1400 sq ft condo has a $920 fee, covers everything except electricity. This fee is on top of mortgage, tax, insurance, cable, etc. Why the hell would anyone want to get into this arrangement? especially when you can rent that 700 sq feet for $1350.
To sum it all up, buying at current prices is a bad idea. Buying when three times average income of a given area is roughly the average house price is a good idea.
I rent a place in an expensive area for peanuts. When the price of a house reaches parity with my monthly rent, I'm outta here.
50% San Diego drop. Not planning on moving back because there will be violence and civil war in CA when it happens.
"keep renting, loosers"
------------------------------
Nice spelling, looser.
anon said:
"4600sq ft home on one acre in North Glendale, AZ.
Gated Community
Home Value 1.2M"
Bullshit,
Glendale,AZ is a shit hole...and there's no such place named or designated NORTH Glendale..just Glendale, drab,cookie-cutter, geography-of-nowhere looserville.
And who valued the POS at 1.2M?
Address? Put up or shut up, liar.
Scottsdale: 30 to 35% downward.
Glendale Arizona, home of call center clerks and vatos...75%
50% of bubble high, even if it's not done falling, further drops will be small 10-25% at most if you follow that rule.
60-70%
Now I'll go back and see how I compare.
@ my supposed wife: You're so cute, bitter jealousy is my favorite. QQ more - your tears are delicious! Not even close, THANK YOU, come again! Funny how you equate packing a lunch and getting healthier, higher-quality food for significantly less $ as being broke. You're one of those idiots who blows 90% of their income on going out for food and drinks and clubs aren't you? ;)
@ Arlington renter: Ummm...no, check the statistics. ;) Maybe it's just Waldorf, Charles Co is still 90% farms/emptyish so I could have misspoken. :P
Yeah, you'll see PG Co prices with a median of 185/etc...sure you will...keep waiting for it.
Your numbers are confused - take whichever statistic best meets your needs. ;) I have new neighbors every week these days...kinda weird actually, was getting used to my ghost-town neighborhood last year. :P
On a nicer note, it's gorgeous lately, and all my flowers are blooming! Hopefully the weather holds for this weekend so I can start back on my trimwork around the house. ;) (smooches one and all)
Oh please. Prices in whatever area you can name aren't gonna go down 70, 80 or 90%. Sorry, just ain't gonna happen, not even in Frank's precious OC.
Meanwhile, youse guys are gonna sit around with your thumbs up your butts, waiting for a McMansion to go to 13k, and demanding that they toss in a pony, too, while they are at it.....when you could have gotten a decent deal on a house that isn't so damn huge and fugly, all because you were every bit as greedy as the former "homeowners".
"keep renting, loosers"
Now, that is just classic!
2:28 Gold is down? From where I bought in at 300 gold is up. Way up. Oh, you meant down from 1,000. So my unrealized profits on paper are only 300% now where before they were 333.3% Oh dear, the sky *is* falling! Yawn.
"I have almost stopped looking for a home that has not yet been foreclosed upon.
The owners are still in the mindset that their homes are worth A LOT MORE than they really are.
Bank owned (REO) PROPERTIES ARE THE WAY TO GO!!!
The banks are going to be dumping these properties soon.
The prices will be 50 to 60 percent lower than peak prices.
I went to look at a 500k home (REO)(peak price) that was for sale for 299K.
It was big and beautiful, and newer 2001 I think.
I would have made an offer, but I was not ready.
I plan to see many more homes like that one, with one exception, they will be much cheaper, much cheaper.
I will not buy a house unless I see a 50% haircut from the peaks, and it must be EXACTLY what I am looking for."
I am frustrated because the banks are not exactly giving them away either. I thought that the banks would be begging people to buy them at any price, but alas not happening. I don't know if I just have to wait longer or if they just figure that the market will pay. Unfortunately I have to agree with the earlier post that Phoenix seems to have bottomed. A lot of the property that was at fire sale a month or two ago, is now bought or pending. Even the builders seem to be not as friendly as they were just a month ago. Unfortunately, it seems that folks still really want to live here, just waited for the "bottom". Still looking but may have to continue to rent for a while longer.
"2:28 Gold is down? From where I bought in at 300 gold is up. Way up. Oh, you meant down from 1,000. So my unrealized profits on paper are only 300% now where before they were 333.3% Oh dear, the sky *is* falling! Yawn.
April 02, 2008 10:20 PM"
Hmm you mean like
I bought a house in 2001 for $300K, went up to $900K and now is down to $700K. Oh dear the sky is falling.
Amazing how the gold bugs of 2008 sound just like the homedebtors/realtors of yesteryear.
"I WANT THE GOVERNMENT TO GIVE IT TO ME." Why not? I don't even cheat or lie...Oh that's where I went wrong. >>NOT<<<
keep renting, loosers
Did you graduate from grade school moron? Clueless, completely clueless.
40% in Central New Jersey.
And this would entice me to look. I'd still expect some room for negotiation, as some trash heaps are more overpriced than others.
50% in Newport Coast, OC
To ED 11:19
"Amazing how the gold bugs of 2008 sound just like the homedebtors/realtors of yesteryear."
Amazing how they Don't sound just like the homeDEBTORS of yesteryear BECAUSE the gold is free and clear, owned outright.
Now, if they get greedy, and go into debt to buy real gold on margin, at the top, well, you might have cause to gloat---then. But not now. If the price of gold sinks and they hold on past the entry price and take a loss on paper, well, that happens to stockbugs too. I know a guy who lost his kids' college education when the NASDAQ crashed; another who has to move back his retirement date by 10 years. It happens to everybody. There's no need or purpose for the special kind of contempt people seem to have reserved for gold bugs. We just like to lose our money for pretty yellow metal where you all prefer to lose your money on shares of companies that you hope might earn a profit one day and have a P/E ratio of 30. As the bubbles play out, commodities or equities, all the same personalitites are present and all the same feelings of greed and fear course through us.
"I am frustrated because the banks are not exactly giving them away either. I thought that the banks would be begging people to buy them at any price, but alas not happening."
Eh you're right, the banks aren't giving them away. Why should they? The banks got them for free! You heard me, we gave our homes to the banks. We were the ones giving the homes away. Not we literally, but them, the people involved.
Say there's this old lady living in her paid off house. She puts it up for sale and gets a buyer. The buyer thinks he's borrowing money. But really the bank is extending him credit and fractional reserve allows credit to be brought into existence by stroke of the banker's pen. The buyer is borrowing nothing owned by anyone else. His account is being modified to pretend there's additional money in there. This allows the buyer to write a check that would otherwise bounce. Why would the banker allow this? In exchange for the privilege of writing a big check the buyer agrees to pay a portion of his income to the bank to pay off the "loan" (which isn't because nothing is loaned) plus interest. Either he pays back and the bank benefits from being paid back value equivalent to three houses after 30 years of P&I, for doing nothing more than entering a few numbers, OR he defaults.
In either case, the bank wins. If he defaults the bank gets the house. What did the bank do to deserve the house? Enter a few numbers into the computer---the same thing it did to create the credit so his check wouldn't be returned NSF: nothing. He basically gave the house away to the bank by making a promise he couldn't keep. The bank is happy to have it, for nothing, and sell it to someone someday on banks terms. All the bank needed was this guy to come forward and put his name at risk to get it out of the hands of the lady who owned it.
The lady, she either deposts the check and moves in with her children and spends the money very slowly, so the bank still has it, or she buys another house in which case the bank, still gets it when that buyer deposits the check, either way it finds its way back to the bank, some bank, in the system, which is the same thing.
The buyer is forgiven debt, pays a tax because the IRS views debt forgiveness as income. But what was forgiven? The bank has the free house, and isn't out any money. It's only out his promise to write checks for 30 years at % interest. Not having to do that now, that's considered income? When he has nothing to show for anything he is still viewed as having income? The bank got the free house. The bank or some bank has the money because the old lady or someone redeposited it. The buyer has nothing but a note excusing him from paying for a house he doesn't have. Yet that is income and he must pay a tax.
Meanwhile the bank, having a free house, and, by way of the lady depositing it, the money the buyer "borrowed," claims financial hardship and being too big to fail, gets a taxpayer financed bailout.
The bottom line is, banks should be forbidden from extending credit this way. No more pretending money is in an account. If it is backed 100% by cash, be it paper money or gold coins, then that material can be lent. But if not, there will be no pretending to lend or borrow. If the cash is there, and it is lent, then that means another depositor or the institution has less to lend. The banks should be money brokers. Not credit creators.
And if there's a default, and a forclosure, the true lenders, the depositors who put up the money (yes their names along with their stakes individually should be kept track of) should be the creditors first in line at the auction, not the bank.
In no way should any bank ever get to keep the forclosed house, unless, and only in the case that the bank's own cash assets earned from fees and services were what was at risk in a mortgage loan.
However, I have a feeling that when it isn't any longer a breeze to get title to forclosed houses by creating credits by stroke of the bankers pen, banks won't be so eager to be the mortgage holders. They'll instead be employing their hard-earned capital in the normal course of banking business, brokering loans, and being the agent of the true lenders in the rare forclosure.
>>>Housing in Phoenix has dropped to a viable range and people are starting to buy en masse.<<<<
Give me a fucking break! You MUST be a 6%er!
"Glendale,AZ is a shit hole...and there's no such place named or designated NORTH Glendale..just Glendale, drab,cookie-cutter, geography-of-nowhere looserville."
Actually, Arrowhead Lakes in Glendale is the #1 wealthiest zip code in Arizona.
The problem is assholes like you from Scottsdale and Paradise Valley just can't handle the fact that you're not even close to being tops.
Go drive through Arrowhead Lakes one day - those houses put P.V. to shame. And people there are actually normal and friendly.
Now get some rest so you can get up bright & early at 6am to your workaday job to pay your mortgage forever.
DC area: 50-70% off peak (part way already).
Or: $250k to low 300's for a *substantial* house, not a little condo, not a ticky-tacky suburban rowhouse with plastic shutters.
Or, as someone said above, roll a pre-bubble price forward with an allowance for inflation (single-digits, that is). I could live with any of the above, but thing is, I'm on my own and now I don't want or need a house!
In Frederick County, MD, I'd say about 48% off peak to make the prices reasonable. Houses that I like that were right at 200K in 2000 (pretty decent brick 1500 sf ranchers on at least 1 acre) were about 480K at the peak. Reasonably, they should be about 250K today. Thus 48% off peak.
Sounds crazy, but so was the run-up in prices.
Go to Zillow.com, do a 10 yr price plot for your county (or city). For Maricopa County (Phoenix area) you see a nice straight line until 2004. Trace that line out, and start looking when the median gets close to that line again. In Maricopa County it works out to about 37% from the peak. Prices may fall below for a while, but then you're trying to time the market.
--Chet
"face it losers you will be renters for life. enjoy the shithole 1 bed 1 bath, you will die in it"
Kill yourself
"good morning HP
stocks are up
gold is down
bailout is here
once again hp losers lose
DOLTS
DOPES
FOOLS
take your pick"
I just want to smack your ass. Do you really think because stocks went up for one day, this whole debacle, one you probably helped create is over? No matter how much the Fed, congress, homeowners try to worm their way out of this one, there's no way to save them from substantial future losses. Why in the hell would anyone want to own a home right now you fuck head.
The worst is just beginning. You're going to come back to HP in a year from now and think these were the good times.
"keep renting, loosers"
Ahh, the brilliant homeowners are back like gnats between the storms.
Prices will drop to or below their starting points (1999 or so prices in Florida). Buy now and you will just be a new bag holder. You can see the similar percentage declines as those who bought during the peak. I'm perfectly content paying $1300/month for this 2800 sq.ft. 4/2/2 while my landlord is dishing out $2600+/ month.
50% off peak in Pacific/Presidio Heights.
Looking for nice SFR for ~$3MM.
around fitty
I live in San Francisco proper, hasn't gone down here except in the south of the city. But it will, my daughter works at SF Honda and they layed off 11 people in a week because they aren't selling cars. Its going to get way worse, even the rich are losing money.
Thank you for all the interest you give me happy homedebtor, I buy mortgage cheap.
60
face it losers you will be renters for life. enjoy the shithole 1 bed 1 bath, you will die in it
Face it dumbshit, you're going to be scraping pennies together for the next 30 years on that home you paid twice more than it's worth while today's renters buy twice the house you have.
20% in Socal.
DaveO hallucinting in Frederick said "A house that was 200K in '00 should be 250K today in terms of inflation..."
Ok, so that's about 2-3%/yr inflation/appreciation, you do realize this right?
If you go by "Core" inflation, which is utter crap, you're pulling about that. However, as we all know, Core factors out everything like RENT/HOUSING, FUEL, and FOOD - you know, the stuff we actually *need*. In real terms, your gallon of milk is up at least 75%, your gas is up a good almost 200%, and rents/housing we'll factor out sinc ethey're th eodd one. So even with just the cost of food we're talking 50-100% depending on what it is (christ, my BAGELS are up almost 50% the last 2 years alone). With that in mind, you're talking at least 300-350K. 350K is probably more realistic and you may see it: everything should be 20% off peak, +/- 10% for location/region. Exceptions being places like FL/AZ where there was nothing there to begin with, and Cali where it's always fantasy land. But, you keep waiting for those prices where your idea of inflation is the reigning factor...
Anything over 40% off the California highs I live under would entice me to start looking. 40% means that even if they dropped 59%, I would still be above the water...I just don't think housing prices, even in California, will drop more than 60%. Highly unlikely.
Frank@scottsdale....
Shut up you loser..you couldn't even make it in Scottsdale, land of easy money and twat...you were run off like a weasel into California trying to hide from your disastrous past.
I live in San Francisco proper, hasn't gone down here except in the south of the city. But it will, my daughter works at SF Honda and they layed off 11 people in a week because they aren't selling cars.
Just Curious. If the only job your daughter can get is working in a Honda dealer, why are you living in the most expensive city (state) in the country?
My wife and I were earning 6 figures when we left the California rip-off in the 90's already, so we could save our money, instead of subsidizing illiterate Mexicans, lazy unions of high school drop outs, Enron, and Hollywood celebrities.
Not sure why some Americans like to be financial slaves, throwing their retirement money away in BS high tax states and welfare parasites from Mexico.
Don't you worry, the Messiah Obama will make everything tip-top for you in San Francisco. Your daughter will be earning $200k per year for selling hondas to Mexicans and ghetto America through Obama's/Rev. Wright's 10 points of ghetto welfare heaven.
Core factors out everything like RENT/HOUSING
Actually, CPI replaced housing cost with rent to fool the sheep and make the corrupt gov look good.
A 50% haircut in Rome might entice me to start seriously looking again; 30-40% outside the major cities (a small villa with some land) might get me looking in the country again. A million euros for a falling-apart shack with no roof ain't cutting it anymore.
My sister and her live-in boyfriend are looking this weekend (to buy in the Bay Area - Vallejo) at the same time that they're both looking to leave California. They think they're "throwing away" their money by renting, and are desperate to "build equity". I don't even know what to say to her anymore, since rational arguments make no sense. Maybe she'll get lucky. Eh.
-PM
Shut up you loser..you couldn't even make it in Scottsdale, land of easy money and twat...you were run off like a weasel into California trying to hide from your disastrous past.
The guy's got a point, Frank.
Hey anon at 7:54, you is ignorant. Some mexicans actually come here, work, pay taxes, and don't leach off welfare. Why are you opposed to people trying to support their family. Didn't your ignorant ancestors come from another shithole across the pond. Why don't you go back.
moron
To all the a-holes saying, "yer stoopid, you'll be a renter all your life, loser..." well, here's some perspective: Me personally, I'm worth in excess of $4.5M with zero debt. I looked at the housing market in 2004 and said absolutely no way I'm going to get involved in another speculative mania. I rented. My family and I have been quite happy in a rental amidst all the SoCal mansions, and I've been bemused by my neighbors saying, "what? you rent?" Well, my vindication is here. Renting has been one of the shrewdest arbitrages I've made in recent years. Loser? Yeah, right. In 18 months, I'm going to pay 50% down on a place that's 65% discounted from this year's price. Stupid? Stupid for renting? Eat sour grapes much?
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