Would you be more tempted to buy a home that was marketed as "Half Off!!!" simply because it was a steal versus what some fool, victim or fraudster paid before you (regardless of the fundamentals or whether the home was still overpriced)?
May 11, 2008
HousingPANIC Stupid Question of the Day
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32 comments:
Check out this story from Greg Swann's "year-round-golf" Arizona, with a home falling from $212,000 to $90,000 in just a matter of months... Ouch. But at $90,000, the new owner might, just might, be able to rent it out with a good yield.
http://www.eastvalleytribune.com/story/115953
This question is a continuation of Pat's question.
Until banks start getting serious about dumping their foreclosures house price will still be over price.
http://patrick.net/wp/
?p=601#comments
Why are banks not selling their foreclosures?
Anyone following the market for foreclosures quickly notices that the banks are not offering any good deals. Why is that? Don’t the banks want to get these depreciating assets off their books?
One answer is that if the banks were to really sell their foreclosures for what they’re worth in the open market, that would devalue the collateral they hold on all their other mortgages, rendering the banks instantly insolvent.
The other part to the answer, contributed by reader Jacob F., is that banks are collecting mortgage insurance (PMI) on the defaulted loans every month, covering the expenses of leaving these houses empty.
As PMI and the other mortgage insurers inevitably go under from the sheer number of foreclosures, that will end, and the banks may at last hold the fire sale that responsible buyers have been waiting for.
Patrick
Half off does have a ring to it
The first thing I would ask the realtor is how the price of the particular home compares to average rents and average incomes. And I would ask for those numbers per square foot.
A realtor that can show that the house is a good deal relative to historic per square foot ratios of price to income and price to rent may actually be a worthwhile human being. All others are parasites.
50% off is meaningless when you know that there has been a bubble and the last sale price was not a sustainable one.
Half off today, is overpriced in 5 years.
* Do your own due diligence.
They'll be giving them away within ten years.
It depends on a lot of factors. What market? How much more does it have to fall? Do I like the house? Etc etc.
If I found a house I love that we'd stay in for 10+ years then I'd snatch it up. But if it's just your average run-of-the-mill house that we'll outgrow and wind up moving in 3 years, then hell no.
DRIVE TILL YOU FIND A RENTAL!!!
THEY'RE NOT MAKING ANY MORE RENTAL HOMES!!!
RENT NOW OR FORVER BE PRICED OUT OF THE RENTAL MARKET!!!
RENTING IS THE SAFEST INVESTMENT YOU'LL EVER MAKE!!!
RENTING IS THE KEY TO HAVING ANY WEALTH LEFT!!!
MAIL THOSE KEYS BACK AND FIND A LANDLORD. YOU'LL BE GLAD YOU DID!!!
DOPES!!!
It's only a starting point in most bubble areas. Prices need to go back to 2000 levels since real incomes have not increased at all the past 8 years.
Hell yes!
50 cents on the dollar is a good deal...even if it's worth 20 cents on the dollar.
Did you catch the Laker game?
Well, I've been waiting and watching the real estate market for years. We had a lovely little oceanfront efficiency in Litchfield, SC that we loved, but it doubled in price in 2 and 1/2 years, so we cashed in.
We've been waiting and watching ever since, and just found a 3 bedroom, 2 bath, brand new condo in the same town for $130K. 5 minutes from the ocean. So, we're back in.
We think it's a good deal, and we're buying to enjoy and hold. So there are some deals out there, if you keep your eyes peeled.
Seashore girl
Half off - is a good start.
Well, maybe. The question isn't whether the house is half off, a third off, or anything else.
Here's the real question: if you find a house in a neighborhood you like, a house that you intend to stay in long enough to pay off the mortgage, and you can afford the house, would you buy it? Or would you wait and try to time the bottom of the market?
Pull the trigger and don't look back or hold off just in case?
YES!!! I would buy a house for 50%off peak prices. But I don't live in a hard hit bubble state so this would never happen here (I am in northern NJ). By the time the house is priced at 20%-25% under peak prices a bididng war would break out.
Banks are selling their houes at significant disocunts, but only to investors who buy them in bulk. If your an average HPer looking to steal a foreclosure, FORGET IT. Ain't going to happen (Unless you buy an REO in Detroit for $1, but that is another ball game)
Anonymous Anonymous said...
Half off does have a ring to it
May 11, 2008 9:35 PM
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But half off a home that quintupled in value during the bubble is still 50% over priced!!
No, price before my deposit must be no more that 130x rent (or less), period!
I wouldn't be tempted but (I've just learned) my spouse would.
Ouch.
Half off a $600,000 1,200 square foot house means nothing. 85% off (puts a $600,000 house at $90,000) and i'd at least consider it.
"Half off" will be next years basis for deciding what is
"Half Off".
Myabe this idiot would buy one
http://www.msnbc.msn.com/id/24569891/
depends on the house/location.
Free couldn't get me to move to some places.
Anyone using a bus tour to assess foreclosed properties deserves to lose every penny they have. Idiots!
The junk homes built with illegal labor in the early 00s will not last over 30 years without major problems. That aside, the days of cheap energy are over for good. Living in the boonies with 4800 sq ft to climate control will never make economic sense again.
They would have to sell for 75-85% off and I would look into one for my retired parents who do not need to drive to work each day and start getting cold when the a/c is set under 78 degrees.
That would take the $600,000 crackhouse in Compton down to $300,000. What do you think?
It depends on a lot of factors. What market? How much more does it have to fall? Do I like the house? Etc etc.
You have a good point Frank.
It still fall back to the seven trends
Three National Trends
1) Inflation
2) Interest Rate
3) Flow of Funds
Four Local Trends
1) Migration
2) Job Growth
3) New Construction
4) Path of Progress
http://www.bls.gov/news.release/
archives/metro_04292008.htm
Seattle-Bellevue-Everett seems to be improving in the area of job growth from last year according to BLS.
Unemployment went are still at 3.8 percent. Not back for a city with a large work force.
It still look like people are still migrating there, but kind of wonder what is driving their path of progress.
http://seattletimes.nwsource.com/
html/realestate/2004379748_
foreclosure29.html
Foreclosure filings up in Puget Sound area; rate still low compared to nation's
No detail was available to explain why the Seattle area is faring better than the rest of the state.
Seattle's economy is stronger than the national average, providing the possibility most local owners have the income to keep their homes.
http://www.pmi-us.com/media/pdf/
products_services/eret/
pmi_eret08v2s.pdf
PMI risk index shows Seattle-Bellevue-Everett Economic and Real Estate Trends risk decreasing from 7.1 to 3.8 percent.
But how much cash-back do I get as signing bonus? The last buyer split 50% of the sale price with the seller. LOL!
50% off a fraudulent price doesn't mean squat. How much is the rental revenue per month? 100x that as price may start to get me interested.
1/2 off with the dollar loosing value is still - 50% too much, give me a stronger dollar and 75% off and we'll talk.
The junk homes built with illegal labor in the early 00s will not last over 30 years without major problems.
Many of them are already falling apart. Cheap, shoddy materials with cheap, illiterate labor makes for a crappy house
Mister Alpine said...
YES!!! I would buy a house for 50%off peak prices. But I don't live in a hard hit bubble state so this would never happen here (I am in northern NJ). By the time the house is priced at 20%-25% under peak prices a bidding war would break out.
===========================
Same here! Using my own home, assessed at 100%, as a yardstick, nice older homes in my neck of the woods, adjusting for average inflation, actually cost equal or LESS than they did 20 years ago.
Anything past 10% sells immediately, 20-25% would be unreal!
Bidding War? Good grief! It would be a shooting war, with real bullets. Winner gets to buy the house!
"The junk homes built with illegal labor in the early 00s will not last over 30 years without major problems. That aside, the days of cheap energy are over for good. "
I want a house with:
-a few acres - so I can grow food if necessary!
- solar panels (new ones that I put on & make money on by pushing the overage into the grid
- wood stove insert to heat the place w/ dead wood from the acreage if need be (and gas is too high)
- instant water heater
anything else that will fight the high energy costs that aren't EVER going to go down!!
To Anon 7:26 PM:
You can build your ‘castle in the sky,’ but then you need to put a foundation for it.
Are you saving for a downpayment? Learning gardening & other self-sufficiency skills? Learning how to control your spending by jumping off the consumer bandwagon and either making/doing/fixing it yourself, buying when it’s on sale, and buying used?
Learn all you can before you dive into it; otherwise you may end up living way out in the sticks with a long daily commute into ‘the big city’ because the wages where you live suck.
Good luck.
-Mammoth
The problem, if you expect to live in the home long term, becomes of what will happen to the neighborhood when this shit blows through. Like other s mentioned what if you save 50% but the price continues to fall? What if the neighborhood was good at the time of sale, but disintegrates as the broke dicks are kicked out of their homes, or what happens if the government Section 8's an area?
I don't think it is wise to buy these days, even if you get a deal, as you don't know what tomorrow may bring and you may not be able to bail out yourself if the afroementioned facets force things to go south. I believe it will be a time to buy when sanity comes to the market and the shit blows away. Only then can you rest with ease knowing that your neighborhood will stay somewhat uniform, and it won't degrade into a ghetto.
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