""I am willing to settle for something" to finish buying quickly, said 20-year old Kielar, who works at the Denver County Jail, and is a part-time student. The tax credit carrot "is speeding up the process," she said, adding that "$8,000 could help remodel the house, redo carpets and cabinets."
For loans backed by the Federal Housing Administration (FHA), which require a minimum 3.5 percent downpayment, the $8,000 can be also be applied upfront toward the purchase rather than later on tax returns like other mortgages."
And everyone knows that a 20 year old who can barely afford to put 3.5% down is a DAMN fine credit risk.
Buy now before your currency becomes worthless!
vs.
Wait until housing prices fall another 30% to sustainable levels, or farther as deflation kicks in!
It's never been a better time to buy or not buy a house!!
Awesome how the government can spur knife-catching behavior.
Now who do you think is capturing the economic rent on that transaction? Wouldn't you be just as well off to wait until the credit expires, and wring $8K out of the seller?
Than again, most FTHB's are not very good at economics or game theory.
Sacramento's new-home sales are still down and out, but some capital-area builders are betting money that the region's suburbs will soon resume their growth boom.
"but some capital-area builders are betting money that the region's suburbs will soon resume their growth boom. "
Filing this one under: when you're a hammer, everything looks like a nail category. Seriously, what else are they going to bet on? Being royally screwed for the next decade?
Lets be honest, $8000 dollars in subsidy for a house is chump change when compared to "Cash for Clunkers". We really need to up it, and use the idea to spur more 2nd, 3rd, and 4th time buyers with a "Dinero for Dumps" program. We give $50,000 subsidy for buying a brand new energy efficient dwelling, the old house is razed to the ground thus cutting supply, spurring the construction industry, and making money for everyone by growing the economy. What's not to like?
Wow Rob Dawg!
re: Nixon, truer words were never spoken... yes, that election was stolen from him starting with 150k votes in TX
and then the late night shenanigans that happened in IL. yes, he took one for the country but I buy your point that
it created a different Nixon...
yes, today he would be a social liberal, was the first to introduce a national guaranteed family income (killed by Dems
in committee)...
ghostfaceinvestah, the problem for many first time buyers is the downpayment - so this is the time to buy for them. Of course this is another group of buyers with little skin in the game - and that worked out well the last time (but this is better - at least these prices at the low end are much more reasonable).
Somewhat related, for those of you who have access to American Banker (free registration for the best two articles every day), a good article on how Fannie/Freddie are wasting our money because they don't want to borrow more of our money. Or something like that.
"Every month Fannie Mae and Freddie Mac are paying bondholders about $1 billion to cover seriously delinquent homeowners.
Guaranteeing timely payments on mortgage bonds is, of course, the government-sponsored enterprises' main business. But once a loan has been delinquent for four months Fannie and Freddie can buy it out of the pool and stop advancing unpaid interest to investors.
Ajay Rajadhyaksha, an analyst with Barclays PLC, said the companies should exercise this right a lot more often than they have been.
"Every day that passes," he said, "is another day in which wealth is transferred from the U.S. taxpayer" to bondholders.
The problem is that such buyouts would result in staggering hits to the GSEs' capital.
Under bondholder agreements, Fannie and Freddie would have to pay 100 cents on the dollar for the loans, but under accounting rules, they would have to then write the mortgages down to their steeply discounted market prices.
The paper losses would in turn force the GSEs to accelerate their draws on the $400 billion backstop the government has created to keep them solvent."
CR : "Expect prices at the low end to rise (simple supply and demand). "
Prices will rise to eat the $8K tax allowance and a bit more(momentum). Just like it did when the mortgage interest deduction was allowed for the first time, back when.
The median house price in China is about the same in US; average income in China is about 1/7 in US. There is a RRE bubble in China now that is far bigger than it was ever here.
Why the hell is a "part-time student" buying a house? I'm assuming he's not independently wealthy? If not, that's insane but par for the course in BananAmerica.
I wonder what the chances of this getting extended are. They extended CFC to 3x the original commitment. I can just see a bunch of Realtors, homebuilders, mortgage brokers crying to Congress about how they're ruined (and the economy is ruined) unless the credit gets extended another year.
I'm so sick of first-timers feeling like they worked so hard to "scrape together" 3.5%. What a joke..
Just got the San Diego condo in escrow figuring on this situation. It's down 25% from peak, but we're making out OK on it - still up from 2000. The next leg down is going to be a bitch tho. High end cliff diving means more of same for low end once the first timers/tax credits wash through.
"I've talked with several people - and there is a buying frenzy right now. First-time homebuyers, especially those with a limited downpayment, are desperate. "
I have been saying this for months here. As i called a bottom in my local market for the low-end back in April.
"I wonder what the chances of this getting extended are. They extended CFC to 3x the original commitment. I can just see a bunch of Realtors, homebuilders, mortgage brokers crying to Congress about how they're ruined (and the economy is ruined) unless the credit gets extended another year."
I agree. There is no question this will get extended. Remember the increase to conforming loan limits was supposed to be "temporary" as well.
I find it amusing that people are calling for a "recovery" (end to the recession is different, as it is more of a technical term), when absolutely none of the support programs have been stopped in the housing market. The Fed is still the only meaningful buyer of agency MBS. the agencies still have the expanded loan limts. the FTHB tax credit is still in place. The forced modifications are still happening. Fannie and Freddie are still drawing down on their committment.
well, NaRa, I would posit that the shift wouldn't have anything to do with any real ideological, intellectual or social shift, and will more occur as a natural result of the expiration of the boomers as a group. In only 15 years, the 1948 babies get their spin on the carousel.
You know, Yancey, that is a damn good point. It would probably be cheaper than renting. And you have the option if some sort of hyper inflation kicks in of keeping the house.... not that I think we will see inflation.
"I have been saying this for months here. As i called a bottom in my local market for the low-end back in April. "
I wouldn't be so sure it was a bottom. Here's how I see it playing out - the government announces a one-year extension to the program, taking the sense of urgency out of it. Foreclosure sales start to pick up at about the same time.
As long as they keep on not foreclosing it is hard to see where the supply will come from to supply the low end. All the while the wave of defaulted property gets bigger and bigger.
Also for all the "frenzy" sales are still quite low historically. In Ventura County and SFV we are still well below historic norms.
The only frenzy is a bunch of FHA borrowers and cash investors jumping at the same houses on the low end.
The "frenzy" hasn't reached Oregon. I wish it would, there's a glut of condos and entry level homes on the market. You could buy 2 or 3 in an equivalent neighborhood for the price of one in coastal Cali.
"As long as they keep on not foreclosing it is hard to see where the supply will come from to supply the low end. "
That's the thing, they are no longer "not foreclosing".
They are foreclosing. Most banks are tired of the delays, have topped up with capital (and/or now have favorable accounting in place), and are ready to get on with it.
Hearing more and more anecdotes of people here in the Twin Cities who are stopping payment of their mortgage and sitting tight. This could get very interesting if this catches on as it becomes "more normal" (and less stigmatized) to do this. The banks (with an assist from DC) are fueling their own demise. I think it's hilarious.
The 8k credit can be used in addition to the 3.5% down. It can not be used as part of the 3.5% per FHA reqs. I know lots of people who were hot to buy until they figured that out.
I don't know how many times I heard that I had better buy now before I get priced out. Now where have we all heard that before? I'm more then happy to wait for the 8k gimme to go away and then wait a little more as the better parts of my area realize they were too slow to drop prices.
The best story I heard was in the comments on the SacBee article. Some guy said he put his downpayment money into the market rally instead of trying to compete with the frantic knife catcher market. But then again I did the same thing on a smaller basis.
One more thing, what happens when interest rates rise again? I'd think that positioning more into cash for a lower price would make more sense then banking on a free 8k.
So lets see. We stop the foreclosures to try to minimize the growth of inventory. Then we subsidize demand of low end homes with tax incentives and subsidized mortgage rates.
Then we watch artificially boosted demand create a "frenzy" for the artificially low inventory.
Please. Fist of all, the article said, "she," and that she works at the Denver County Jail. They added that she is ALSO a part-time student, so she sounds quite industrious to me. Second, no, the tax credit does not count toward your 3.5%; it can be ADDED to that to increase your down so your amount financed is lower ... which helps loan-to-value tremendously. Third, first-time buyers who work at the county jail are probably not looking at $150k to $300k homes. They are looking at homes for less than $100k, and for many of these buyers, the payment will be lower than rent so they will come out ahead on the deal.
These buyers are not the knife-catchers you are looking for. They are not speculators, and they honestly need a place to live, and they would rather not continue making rent payments to their current landlords. These buyers are the ones who did NOT over-finance a bubble-home in the last five years, do indeed have their 3.5% and are driving a very hard bargain to boot, between REO and HUD properties and desperate sellers-many of whom are failed flippers or wannabe-landlords.
Game theory and financial acumen? Some of these buyers are quite skilled, amigo. They are striking while the iron is hot. As always, it depends on purchase price, location, financing terms, and the amount of remodeling/refurbishing the buyer has the skill and desire to perform. There are deals to be had for a patient and savvy buyer who plans to remain in their area for the near future.
Note that nothing in the above missive should be construed as "investment advice," and your mileage may vary.
It isn't about the P/T student getting a house. It's about numbers and managing the spin. If the world banking system almost collapsed less than a year ago, then it is highly unlikely that it is off life support now. "They" got to restart the engines. Right now it is like we are burning the furniture in the boilers in hope we get enough steam up to turn the propellers and get the USS America moving again.
CR- Would love to see the stats broken down by state....if possible. I am an appraiser and assume the "frenzy" is occurring in the once high priced bubble areas. Good stuff.....I am seeing the affluent areas of metro Atlanta selling at close to 20%-50% off...depending on price point. The bigger the ticket...the bigger the discount. Golf memberships are next to nothing and most courses have opted for group memberships for several NICE courses. Low priced stuff from 100K-180K is firm and folks of ALL income brackets are scurrying to get in one. The 250-350K suburbs are STILL getting hammered. I am betting that a nice Golf S/d will end up with a median price of $200-250K before this is over...and these are 3,000 Sq Ft homes...with basements in GOOD school districts north of Atlanta. Telling sign for the times....MM
The kid that delivers the paper was also telling me that he was hoping to make his first home purchase before the credit expiration, but was being held back because his parents make him spend his downpayment to buy lunch every day at school.
When this changes to "do indeed have their 20%" I will know sanity has returned. 20% down, 3x your income and housing would never have a problem going forward.
Effective Demand,
Keep me informed as to any Ventura/Moorpark/Hueneme Triangle SFRs that cash flow. Whether the banks have started to consummate or not no longer matters. There are the get in now group of buyers and no one else behind them in this rush to make the buy in.
Re: Americans No Longer Seduced By Shopping: The Case Against a 'V' Shaped Recovery
This concept is as bogus as the "Americans are saving more" articles.
What are REAL Mericans gonna do? Sit in Cafe's and discusses phillosophy all day?
When this thing blows-over Mericans are going to take EVERYTHING they saved and blow it on a shopping extraviganza like the world has never seen. People only save because they have fear of the future and doubt of about the safety of the future. If you ask REAL Mericans (which means nobody on this site) about the future it'll be the usual delusional Merican optimism (which IS why Merican is so GREAT).
FHA is 700K in some expensive markets......they are also seeing a MASSIVE spike in defaults with under 24 months seasoning. Ginnie is about to fund 1 Trillion in MBS this year....Gov't monies all around.
This article once again illustrates the idiocy of wall street analysts.
Buying back a profitable part of your brand is bad compared to making a special dividend with the money?
This analyst still has a job?
From the article:
The transaction would boost full-year earnings, reunite Barnes & Noble's brand and eliminate annual royalty payments for online textbook sales.
Analyst Gary Balter says the acquisition looks good on paper mostly because it will add to earnings near term.
"Taking a deeper look, the deal strategically makes little sense over time as the company essentially doubles its exposure to one of the segments that we believe are most at risk to technology change over the next several years, as well as reduces the cash element of the Barnes & Noble story that has supported it for so long," he wrote in a client note.
Balter added that the deal will eliminate free cash that could have been put toward a special dividend.
The analyst lowered New York-based Barnes & Noble to "Underperform" from "Neutral."
Yeah, paper textbooks are going away. Not.
Paper textbooks are the essence of the new edition swindle, and professors will not allow much cheaper and easily updated ebooks to empty their pockets.
No mention about how Borders is on the edge and a bad Xmas will sink the main competition to B&N.
That's the thing, they are no longer "not foreclosing".
They are foreclosing. Most banks are tired of the delays, have topped up with capital (and/or now have favorable accounting in place), and are ready to get on with it.
Not at the levels implied by NOD, NTS and defaults.
Check my site tmw, I'll have the mid-August trustee sale numbers for several markets in So. Cal. . I don't think they will impressive but I haven't run them yet.
"The 8k credit can be used in addition to the 3.5% down. It can not be used as part of the 3.5% per FHA reqs. I know lots of people who were hot to buy until they figured that out."
Yes, that is a common misperception, that is not true.
"2. Initial 3.5 percent: The measure, however, comes with several key limitations. First, it only applies to Federal Housing Administration mortgages. More importantly, the short-term loans can't be used to pay for the minimum 3.5 percent down payment that FHA loans require. Instead, the loan can be used for closing costs and to finance
the portion of the down payment that exceeds the 3.5 percent threshold. "
Seriously, We joke and praise but your work on HCN is a masterpiece. I can only hope you are rewarded with the recognition and renumeration you deserve.
Besides, v. is a great way to separate the pros from the wannabes.
threetorches, au contraire. some of these buyers are people that DID NOT HAVE ACCESS TO CREDIT from 2002-2008. Basically anyone in the low to middle income bracket who fogs a mirror can obtain an FHA loan.
The first wave of first-time buyer loans are already starting to default as the FHA, FNM, FRE, and ginnie default rates show.
"Bruce McConnell, whose Healdsburg Chrysler/Chevrolet dealership has not been reimbursed for any of the more than 30 vehicles he sold in the “cash for clunkers” program that began last month, said he’s now on the hook for more than $100,000."
“It’s enough to get me worried,” McConnell said. “We did our job. The government hasn’t upheld their end of the bargain.”
poic, I agree that 20% provides a bigger "safety margin," and I think a lot of us question HUD and FHA-backed loans going to homes selling at or above $500k.
That said, if a hard-working jail employee and part-time student can put together $2500 and get herself into a $75k home that saves her a couple hundred a month in shelter expense, I am just not going to complain too much. More good than ill comes of deals like that.
"When does the FHA limits go back to the $417 max? Is it the same that the tax credit expiration? "
Never. Uh, I mean, there is a date, but it is meaningless, as it will be extended without end. I think there is a bill in Congress to extend it through the end of 2010.
That's exactly the case in my county. No decent entry level stuff on the market. Emphasis on the decent. - J
(Sound of jaw dropping.) Seriously? Jeez, is Oregon in some parallel dimension or something? You could buy a lot of nice decent little houses here. What gives with this?
Anything less than 10 (or some would say 20%) is "over-financing", period. Sure, these knife-catchers want the free cash. Who wouldn't, but in the end they'll get burned when the upper end home prices decline because that will further depress prices in the lower end.
The big deals right now are at the courthouse steps. There is an investment group that has absolutely cornered the market in Simi (about 50%-60% of foreclosures they buy).. and somewhat Camarillo.
There are whole sections of Ventura being ignored though. I think there is even more opportunity in the SFV, much fewer sharks over there relative to Ventura.. but Ventura County is smaller and easier to define. So it is simpler for investors to work over.
"You could buy a lot of nice decent little houses here. What gives with this? "
I think the OR (and PDX market, in particular) in still over-priced. Basically its at rough parity with big swathes of socal. Completely ridiculous for this pretentious economically-disadvantaged backwater.
"Check my site tmw, I'll have the mid-August trustee sale numbers for several markets in So. Cal."
Not talking about sales, but foreclosures. Sales take a few months later. Foreclosures are on the rise, sales will start to hit in about a month, month and a half.
Continued from last thread - BB&T, with 1,400 branches, will do nicely buying Colonial's 345 branches - other than Texas and Nevada, their markets overlap.
"Basically anyone in the low to middle income bracket who fogs a mirror can obtain an FHA loan.
The first wave of first-time buyer loans are already starting to default as the FHA, FNM, FRE, and ginnie default rates show. "
Agreed. You can get an FHA loan with a DTI up to 60. totally unsustainable. And many of these FTHBs are defaulting already, they just don't understand what they are getting into. Sometimes they get "counseling". It is useless.
FTHB's have traditionally been terrible credit risks, programs like this 8K only make it worse because you get even less qualified buyers.
Not that originators care - why should they, they are not on the hook for the credit risk.
Not if they do not buy the "assets". When a bank sells deposits, the buyer is assuming a liability, and gets cash equal to the deposits purchased from the seller, in this case, the FDIC (less any deposit premium they agree to pay). They buyer also pays for the value of the fixed assets at the branches. If BB&T does not assume any of the loan portfolio, they have no liability - that stays with the FDIC.
Even if they buy assets, the loans, they usually end up with a loss sharing agreement with the FDIC.
It's hard to find work here too, so anything affordable is long gone. Especially anything stick-built with a 1+ acre lot. - J
You would think that with wages so low and unemployment so high in the Pac NW, prices would drop, but we're still in the middle Case-Shiller numbers. I have no explanstion for this, other than the "Eden effect."
"They extended CFC to 3x the original commitment."
Temporary 250% FDIC hike extended. TALF about to be extended. Temporary postponement of off-balance sheet reporting rule extended. 0-.25% extended.
Fixing too big to fail extended. Capital gains tax reduction extended. Mortgage interest deduction extended.
I think its more due to the fact that bubble defaltion was delayed 12 months in the PNW (desert state equity locust effect). Extrapolating from the bay area (also eden to many) we are about to fall off a cliff this winter.
Effective Demand (homepage, profile) wrote (in reply to...) on Fri, 8/14/2009 - 11:08 am
Rob,
Will do.
The big deals right now are at the courthouse steps. There is an investment group that has absolutely cornered the market in Simi (about 50%-60% of foreclosures they buy).. and somewhat Camarillo.
There are whole sections of Ventura being ignored though. I think there is even more opportunity in the SFV, much fewer sharks over there relative to Ventura.. but Ventura County is smaller and easier to define. So it is simpler for investors to work over.
I don't understand the Simi/Moorpark group. I understand the idea but the prices are not to my mind reasonable. Besides, their approach has been to essentially bid against themselves. Aren't they smart enough to let some go and approach after the bids with an offer?
I see the Santa Paula/Fillmore/Piru corridor as an opportunity. Piru could become the escape location for Newhall refugees.
You would think that with wages so low and unemployment so high in the Pac NW, prices would drop, but we're still in the middle Case-Shiller numbers. I have no explanstion for this, other than the "Eden effect."
..................
There are also a lot of old-time farmers who waited their whole lives to sub out acreage and retire on the profits. They sure as hell ain't gonna take less than bubble prices if'n they can help it. And some areas are being prevented from subbing, to preserve farmland, which keeps bigger lots with smaller houses at a premium.
Just a stuck mentality that keeping prices at bubble will somehow scare up buyers....:shrug:
It is all part of the bid the buyer makes - they get a limited time to review the books, and then can make a bid on the liabilities (deposits) they want to assume and the assets (FF&E, loans) that they want to buy. Any buyer in their right mind is not going to bid much for the loans, and will require the FDIC to shoulder a huge share of potential losses.
@Mannwich- the article describes her as a "she," says she works at Denver County Jail, and that she is also a part-time student; and says she is shopping for a home.
I am guessing that she is not looking at a $250k house, that she has her 3.5%, and that she is probably majoring in Criminal Justice or something like it.
Unknown from the article is whether she is married, and if so what her partner does for a living and if they are both applying for the financing together.
Also unknown is the median home value in her area, amount off peak, local employment rates, her income, the amount of loan she is seeking, her debt-to-income ratio, and her shoe size.
My point was that the article gives no rational grounds for attacking this woman for seeking to better her financial position and own instead of paying rent. That was all.
When I lived in Simi, it was a desireable bedroom community because it was somewhat isolated from the crime & grime of San Frenando Valley but had relatively easy freeway access to jobs in both directions.
Good one CR....the same could be said of the economy as a whole. Unless we can run 2 trillion dollar deficits + forever we need to come up with a new plan and quickly.
What happens exactly after the FDIC uses up the emergency credit ($100BB).
I suppose the FDIC is obligated to make it up in assessments to any bank left standing. But what if the money isn't there? The "Corporation" term is a little scary. I suppose their debts are not backed by full faith and credit, and a bank holiday would ensue.
Just a stuck mentality that keeping prices at bubble will somehow scare up buyers.... J
There's that. Like my neighbor who put his 4 acres + mediocre house + shop on the market for 499k.
There's a theory here that the land use laws make so much land "administratively unbuildable" that that alone drives up prices. Plus all the land that's in a slide area, or marshland. The flood we had last year caused the Corp of Engineers to vastly increase the flood zone area of the Nehalem River valley, for example.
And, weirdly enough, the numbers are actually looking "improved," in the PDX area, at least:
To keep green shoots hope and change alive I wouldn't be surprised if Obamanomics extended $8,000 federal tax credit for first-time buyers day to try and keep the 'pump'' going ( in cahoots with too greedy to fail Wall St shysters who got $12 trillion ) so peak real estate values of the bubble can be miraculously restored
I agree...asking prices don't seem to be based at all on household incomes and the current unemployment rates. More what the knifecatchers need to break even. A house adjacent to mine was bought out of probate for $100k in 2007...buyers gutted it to the studs and remodeled it with basics. They've been asking $200k for a year...my other neighbor offered $196k cash so his daughter could move in...was turned down. This is in a neighborhood where there are 8 other homes for sale...most underwater.
threetorches, she is 20 years old for glod's sake! obviously no college degree (bachelors) at that age, unless she is some super genius, in which case I highly doubt her employer would be the prison system, nor would she qualify for the 8k. 'I want it all, I want it now" (will not submit crown to bad youtube) - Isn't that what is wrong with this country? If people are forced to wait and save, they are much less likely to walk away , no?
Come on, let's have some optimism here. Can you imagine the euphorium when the deficit is "brought under control" and is LESS than 2 trillion. Besides, 2 trillion is only .002 P in the alternate-universe.
My point was that the article gives no rational grounds for attacking this woman for seeking to better her financial position and own instead of paying rent. That was all.
I see the Santa Paula/Fillmore/Piru corridor as an opportunity. Piru could become the escape location for Newhall refugees.
I havent studied the area enough as far as prices and demand, but a lot more homes get bank owned in that area over Simi/Moorpark/Camarillo.
The Simi/Moorpark group didn't spread it out enough.. they educated a bunch of people (too obvious of what they were doing) who are now their competitors all in a narrow area. I think a good interest rate spike or release of foreclosures would really hurt them but TPTB won't give me that gift lol.
edit: The other issue is, by concentrating on a narrow area they will stabilize it and give themselves fewer opportunities and sales in the future. When (if) all the agents figure out they have few sales because of the few investors they will be pissed.. the one group I think is all agents so they probably don't care.
There is a 5 acre hay field down the road from me, zoned open space so you have to pay back taxes to build on it. Been on the market for years and is only down to $249K so far. Wtf?? Pre-bubble would have been maybe $60.
I bought my 1st house at 20 yrs old. FHA too. But we had double income, some cash down, and it was well within the 3x income limit. I lived there 15 years and sweated plenty of equity in that baby
broward (homepage, profile) wrote on Fri, 8/14/2009 - 11:25 am
When I lived in Simi, it was a desireable bedroom community because it was somewhat isolated from the crime & grime of San Frenando Valley but had relatively easy freeway access to jobs in both directions.
Development to the north on the I-5 courtesy of LA County has absolutely destroyed any commute value to Simi vis downtown LA or The Valley. At the same time the planner cadre has crushed much of what made Simi valuable as an independent entity. As a general rule new development was 3x the existing density. Thus what you thought of as Simi is at least twice as dense now with the inevitable urban ills.
With approval, they can actually borrow up to $500B from Treasury. The theory is that they will then increase assessments on the surviving banks to pay back the loan. There is history for the insurer to go bust - FSLIC, which used to isure S&Ls - it went bust, was recapitalized by the taxpayers and then run by the FDIC. The FDIC had two insurance funds at that time, one for banks and one for the thrifts. The thrifts had a higher assessment to pay off the loss.
Been on the market for years and is only down to $249K so far. Wtf?? Pre-bubble would have been maybe $60. - J
The builders here have "banked" land for years to get ahead of land use constraints, especially the run-up due to the Urban Growth Boundary delays. They financed that, of course, and now some of them are selling to all comers, which is unheard of here. But prices are still high-- 160k for a 10,000 square foot lot in the 97229 area code, on the outskirts of Portland.
I have a hopeless fantasy of buying back my house's original homestead land...tearing down all the foreclosed & abandoned empty houses built over 'my' farmland....joke's on me, since nothing is getting foreclosed on yet. The one house up for sale on my land went at a short sale.
And that is the problem. That prison worker/student isn't stealing profits from Wall Street. Mortgage brokers will still get paid - yes there can be YSP on FHA loans, the loan will still get serviced by some entity affiliated with Wall Street. And should this person - with very little skin in the game elect to stop paying - it will mean more fees for the servicer until it is ultimately foreclosed on - at which time the tax payers will get to bear the cost of the failure to pay.
yogi, i agree. and no cap on income for social security. and pay the 6+% social security that one would pay on income on capital gains, too. how much of that blackstone ceo's 720Million $ last year get taxed for ss? same amount as my sorry a$$.
Simi is just gross. But LA traffic is MUCH lighter than a few years ago, as long as you're not talking about the 405 between LAX and the 101, which is as bizarre as ever. In any case, real men know how to use streets like Sepulveda or Victory to get around. Not a big deal.
Thus what you thought of as Simi is at least twice as dense now with the inevitable urban ills.
Inevitable is probably right.
I lived in Palmdale in the early late 1980s.
I revisited it about ten years later and it was swamped with gangs and crime.
I couldn't believe it happened so fast.
I've said it once and I'll say it again: how can there be a bottom in the low-end without a bottom in the high-end? High end homes falling in price puts pressure on mid-range homes, and those falling prices put pressure on low-end homes.
Therefore, as CR indicates, there is only a temporary bottom in the low-end.
since nothing is getting foreclosed on yet. The one house up for sale on my land went at a short sale. - J
That's the thing-- the huge wave of foreclosures that are supposed to be here, just waiting to be snapped up, has not really materialized. There are some, but they are generally dogs in bad neighborhoods, basically tear-downs. I googled RealtyTrac, and the scuttle is that their listings are very misleading-- out of date, and sometimes just showing the junior lien rather than the real price. I'm not seeing the 50% off sale here, for anything worth buying.
Agreed. You can get an FHA loan with a DTI up to 60. totally unsustainable.
Where is there a 60% DTI FHA? I shopped HUD, FHA and all the streamline and 203k variants, CalFHA, USDA etc loans as recently as Jan 09 and I was stopped cold at 41% each time. Not saying it isn't available but I sure wasn't able to find it.
some slightly-smarter-than-average californians will always be moving RE equity up to the PNW, even in times like this. sure, buying a SFR for over 300K in the PNW is dumb, but it is outweighed by the smartness of selling a still wayyyy overvalued rancher in a place like west LA or irvine.
What happens exactly after the FDIC uses up the emergency credit ($100BB).
They borrow more.
If there is one lesson we all should have learned from this by now, its that if something is even remotely successful in fixing a financial issue, it will be extended and expanded. If something isn't successful, it will be expanded until it is, then extended.
If they FDIC needs more money, they will get it. If people need 4.5K to buy a car, they will get it. If people need 8k to buy a house, they will get it. If the FHA needs to offer subprime loans at even better-than-subprime rates with worse than subprime underwriting, they will offer it.
This has clearly been deemed "the way out" by the powers that be.
Mike I've stated more than once my view that the 8k is mainly welfare for the banks, with the buyer and seller getting a small cut.
They can't foreclose on all the underwater homes and stay solvent, and Washington knows it. They're not even paying their condo assessments in Illinois, someone said earlier.
"Can you imagine the euphorium when the deficit is "brought under control" and is LESS than 2 trillion."
I can imagine the spin. But spending was going to explode even if we didn't hit this wall just due to demographics. They will never get these deficits under control. Wait until that little ugly truth enters the collective conciousness of the markets.
The only way they have a chance of even lowering the deficit (to say an even Trillion or something) is if we have a very strong "V" shaped recovery that is sustained by private investment and demand and that lasts for a decade or more. And a reduction in deficit = a drag on the economy as far as growth in GDP so the recovery would have to be so strong it could offset reduced Gov't spending and show real growth.
some slightly-smarter-than-average californians will always be moving RE equity up to the PNW, even in times like this. - HH
I can't document this, but just anecdotally, I think the Pac NW draws from all over the West, and some from the Pacific. The out-of-state licenses I see tend to come from Idaho, Hawaii, Alaska, Canada, Washington, etc. The Cali plates are there, but I think it's more than that.
some slightly-smarter-than-average californians will always be moving RE equity up to the PNW
Like free trade, the thing will eventually reach an equilibrium for some period of time.
The outflow from L.A. died down a lot after L.A. prices fell and refugee area prices rose.
Plus there's local features that put people off like the weather.
I worked with a guy who moved to Portland.
I had dinner with him one year later after he'd moved back to L.A.
@NotaReal: Sure, why not take the free cash and low-risk proposition but from a bigger picture standpoint, it's just not wise to be promoting this kind of behavior. We're going to destroy this countr supporting asset prices at all costs.
broward (homepage, profile) wrote on Fri, 8/14/2009 - 11:41 am
Thus what you thought of as Simi is at least twice as dense now with the inevitable urban ills.
Inevitable is probably right.
I lived in Palmdale in the early late 1980s.
I revisited it about ten years later and it was swamped with gangs and crime.
I couldn't believe it happened so fast.
Even I was shocked by that transformation. I know how it happened but it is too painful to recount. When I first started going to our cabin in the early 80s I relished the Sierra Highway turn off for the darkness. Now it is 30 miles of solid sodium lights. They aren't even in sight of the bottom.
"yes there can be YSP on FHA loans, the loan will still get serviced by some entity affiliated with Wall Street. And should this person - with very little skin in the game elect to stop paying - it will mean more fees for the servicer until it is ultimately foreclosed on - at which time the tax payers will get to bear the cost of the failure to pay."
The rules say you can't stick YSP on a FHA or USDA and the lenders whine up a blue streak. But sit down with the regs and you will find a way and I'm not making a volume call.
I had a friend, a broker, give me a basic outline on how to be a broker of conventional loans. He challanged me to find a way make money off the transaction and within 10 minutes I came up with 3 ways to hide fees with just a pad of paper and a calculator. Imagine what a person employed in the field with excel and a starving family could accomplish.
To summarize, you are exactly right. nothing has changed.
Didn't you just make a ton of money riding the market up from the depths?
I did, and I count that as my stimulus money.
Liquidating a bunch of that was beyond blissfull to liquidate credit card called in debt (thanks, Jamie D, I won't forget when it comes time to stiff you on my heloc!)
This market over the last six months was the biggest gimme in history.
Now, if you can't see the writing on the wall, just look at the supertankers of oil piling up waiting for even higher prices.
Only bunch stockpiling resources at this time are the Chinese, and they are communists who are only concerned with a real return on their dollars, not wallstreet alpha.
The rules say you can't stick YSP on a FHA or USDA and the lenders whine up a blue streak. But sit down with the regs and you will find a way and I'm not making a volume call.
I had a friend, a broker, give me a basic outline on how to be a broker of conventional loans. He challanged me to find a way make money off the transaction and within 10 minutes I came up with 3 ways to hide fees with just a pad of paper and a calculator. Imagine what a person employed in the field with excel and a starving family could accomplish.
To summarize, you are exactly right. nothing has changed
One just needs to stroll over to the broker outpost forum to see that indeed there are ways to stick YSP on FHA.
"first-time buyers accounted for 43% of sales in Q2"
They were the only ones who were not not underwater...yet. Kind of hard to move up or move down if you are under 200-500K or more. What happens to the credit of the walkaways? Could some be claiming first time buyer status, for the incentives?
Plus there's local features that put people off like the weather.
I worked with a guy who moved to Portland.
I had dinner with him one year later after he'd moved back to L.A.- B
This is true. Lots of people have Seasonal Affective Disorder. I ended up with a Vitamin D deficiency, because I was wearing sunscreen out of habit, and not enough light was reaching my skin. People don't realize how grey it is here, most of the year. It is beautiful, though. And the natives don't seem to mind the darkness.
Ya know, it's people like YOU that cause recessions.
I'd suggest 100mg of Hopium. There's also a new experimental drug call exuberance(tm), but I'm not sure if it's available yet. I only heard about it yesterday.
Of course, like all mind altering drugs, you may experience side-effects. If you experience lengthen-green-shoots for over 4 hours you should consult with your CR doctor immediately (and, OF COURSE, stay away from lawnmowers).
If this doesn’t work, I can recommend Fucitol (50mg) which I take everyday before work.
Where do reporters find these characters to report on? It's always baffled me.
As I recently mentioned, i helped my cousin(s) move into a new house which is effectively less than their current rent.
As far as I can tell, one of them IS a student in their twenties.
I taught my son what they were when he was 2- the first time my mother heard the words "organ donors" from the back seats she almost had to pull over from laughing so hard.
Just remember, a motorcycle is proof that we are only smart monkeys showing off- with occaisional evolutionary deadends.
summer in the olympics and winter on the islands is a good plan. a bit like the classic hamptons/palmbeach cycle on the east coast.
.....................
Living in Whatcom county isn't too bad. Right close to the salt water, with Mt. Baker just up the road. We get about 2 weeks of heat wave and 2 weeks of 'blizzard' most years. But I've never been out of the PNW, so I'm biased
First Time homebuyer = not owning a home in the last 3 years.. There are many programs for low income folks to buy a home right now. Section 8 subsidies will pay 70 percent of your monthly mortgage. So imho this is the government bailing out the banks allowing the banks to give away these homes to investors/flippers who flip to low income folks in bidding wars with government money anyway where the government pays the down payment and closing costs and then subsidize the purchase by using FHA backed loans and after closing paying up to 70% of the monthly mortgage through section 8 home ownership help.
Must be frustrating to be a truly well-qualified potential buyer, not wanting to buy into a still-bubble-market, and yet the gubmint keeps the cheese flowing the the charade going.
Must be frustrating to be a truly well-qualified potential buyer, not wanting to buy into a still-bubble-market, and yet the gubmint keeps the cheese flowing the the charade going.
Yes. Also frustrating to have lost hundreds of thousands of dollars of said qualification by being on the wrong side of the government printing money and propping up zombie institutions, REITs, and insurers.
Paying taxes to a government that is blatantly lying, ruining my trades, artificially propping up home values so that I cannot purchase. But I feel fortunate that they are protecting me from invisible enemies that want to kill me, promising me 70 cents on the dollar for future social security payments, and....actually I can't think of anything else the federal government is doing. All the useful stuff is at the state and local level.
"Must be frustrating to be a truly well-qualified potential buyer, not wanting to buy into a still-bubble-market, and yet the gubmint keeps the cheese flowing the the charade going."
Nope.
Just got a significant rent concession on a "close-in" home in PDX that we have been renting for 9 years. I now pay less than 4% of my gross income on housing!
" FDIC Chief Bair says parts of Obama's financial rules plan won't fly as Treasury struggles to push them.......That is a reality the administration needs to deal with."
......sounds like we have a "chest-beater" here......
And the BDI is suggesting that the Chinese might be getting close to topped off...been digging into corporate, asset and VPP purchases by the combined Chinese NOC's - big ramp up last year (extension of a trend) and the year to date rate if sustained will surpass that - when they are done things will be interesting...
I see consensus is now that repeat transactiion home price indexes, that were ariticially depressed by the sloppy selling of REO in Q4 and the first two months on this year, will now show some pretty decent gains in Q2 and Q3. It is a vaild question as to whether to bounce in measured HPIs == that strangely many analysts didn't see until recently, evern though the data available were crystal clear == will push home prices down later this year, and whether that drop will fully offset the big gain observed from february to july. I don't know the answer, but no competent housing analyst who follows all regional data missed the big jump in repeat-transactions HPI in late spring and summer.
So many properties out there are distressed sales, I wonder if someone shopping now is likely to result in a close before Nov 30. My offer on a short sale was accepted on May 17 and I have still had absolutely no word from either the first or second mortgage holder as to whether the deal will be approved - 3 months later. In fact, I'm a little worried that my deal still won't be done by Nov 30, and that will have been 6.5 months! Both mortgages are held by Wells Fargo, incidentally (where I've been a customer for 20 years, but no longer, once this deal is done).
I'm a first timer, who quietly saved all through the bubble in order to have 15% downpayment in coastal california and have another 7.5% in liquid savings after the deal is done (not including my $8K), and I bought in a location where 15% is enough to put down 50% in much of the country. Not all of us are just wading out to get in over our heads in some kind of second wave of bubble madness. I feel like I am pretty justified in collecting $8K just for being one of the good guys in all the mess - no unsecured debt, no crazy mortgages during the bubble, a reasonable downpayment on a very modest home in Pasadena, enough savings to get through a reasonable economic hardship intact, and I've been in a high tax bracket for years with minimal deductions since I was priced out of the housing market. Personally, I think that if we are going to have a credit in order to stimulate the housing market and 'support' prices, then the credit ought to be proportional to the conforming loan limit for an area, or something else that reflects the cost of housing in the location of the purchase. $8K is big chunk of a downpayment on a $150K home in Kansas (more than the 3.5% requirement for an FHA loan, in fact). However, It's only a little more than half the closing costs on a home in coastal california which costs 3 times as much.
And for what it is worth, my $8K will almost certainly get plowed right back into my local economy as I buy furniture and appliances to replace the crap I've been using for years in the homes I've rented.
"Just remember, a motorcycle is proof that we are only smart monkeys showing off- with occaisional evolutionary deadends."
Citizen AllenM, You have absolutely no clue of which you speak.
The vast majority of motorcyclists couldn't care less about what anyone else thinks of what they are doing. We do it because we love it. For those of us that do it, there is no way to have more fun getting from point A to point B that costs less than $200,000, by land, sea, or air. When was the last time you saw any of the terrain between you and your destination on a trip longer than 500 miles? When was the last time you felt the temperature shift by 10 degrees or more as you dropped into the microclimate between two rises on the road? Did you even know such microclimates exist? How often do you really experience the sights and smells of the terrain you pass through on a road trip? For that matter, when was the last time you took a road trip? Instead of teaching your son to jump to condescending conclusions about others and otherwise come across like a pompous a*s, how much fun could you have teaching him to ride a dirt bike or riding the countryside with him sitting pillion behind you? Some of us choose to teach our children how to be the best people they can be by engaging in such activities with them, rather than teaching them to make snap judgements about others.
To be a successful motorcyclists requires skill and dedication to constantly improving those skills. But once you've removed the drunk riders, the unhelmeted riders, and the unlicensed riders from the statistics, our odds suddenly don't look nearly as bad as you might think.
Life is full of dangers. You could slip in the tub and die tomorrow. The important thing is to be sure that you have lived life to its fullest during each and every day you are given on this earth, and some of us do that, in part, by throwing a leg over a bike on occasion and going for a ride. If my exit from this life should happen to result in my organs being available to save the lives of others, whether in a motorcycle crash or otherwise, then I'm proud to be labelled an organ donor and, quite frankly, totally fail to find mirth in that label. I sincerely hope that you or your family do not one day find yourselves in need of such a donation or you just may wind up regretting your laughter.
A great realtor I've found for those in the Austin area is Kenn Renner. He really knows what he's talking about concerning this $8000 tax credit for first time home buyers. He helped me out in a big way. Check out his website at Austin TX Real Estate Broker :: Buy Sell Investment Home Videos :: Seminars
i think camble survey seems to be real because now the quantity of home buyers are reducing rapidly just because of the current economical situation!
people have no capacity to buy any thing they are living with so many difficulties!
Good broward ! i think now people are slightly moving towards different places! great work
may be now people are thinking to go to take the rent houses instead of buying?
Well of course. This is a once-in-a-lifetime opportunity to get into the CA housing market.
""I am willing to settle for something" to finish buying quickly, said 20-year old Kielar, who works at the Denver County Jail, and is a part-time student. The tax credit carrot "is speeding up the process," she said, adding that "$8,000 could help remodel the house, redo carpets and cabinets."
For loans backed by the Federal Housing Administration (FHA), which require a minimum 3.5 percent downpayment, the $8,000 can be also be applied upfront toward the purchase rather than later on tax returns like other mortgages."
And everyone knows that a 20 year old who can barely afford to put 3.5% down is a DAMN fine credit risk.
"I am willing to settle for something" to finish buying quickly, said 20-year old Kielar, "
Some how I don't think he was priced out of the market a few years ago. But I'll bet he's got a stellar earnings record.
Yeah, why wouldn't people want to over-borrow, default, and live rent free for a few years. I am still kicking myself for doing it the prudent way.
Buy now before your currency becomes worthless!
vs.
Wait until housing prices fall another 30% to sustainable levels, or farther as deflation kicks in!
It's never been a better time to buy or not buy a house!!
Awesome how the government can spur knife-catching behavior.
Now who do you think is capturing the economic rent on that transaction? Wouldn't you be just as well off to wait until the credit expires, and wring $8K out of the seller?
Than again, most FTHB's are not very good at economics or game theory.
the natl RE median in australia was $479K in june - as if that's sustainable...
I cannot wait for the 'pent up demand' to get spent. Once its spent and rates creep up I'll be very happy to buy a home
From today's Sac Bee:
404 - Not Found - sacbee.com
Sacramento's new-home sales are still down and out, but some capital-area builders are betting money that the region's suburbs will soon resume their growth boom.
Any idea to what extent the $8K tax credit is being used as down payment assistance?
"but some capital-area builders are betting money that the region's suburbs will soon resume their growth boom. "
Filing this one under: when you're a hammer, everything looks like a nail category. Seriously, what else are they going to bet on? Being royally screwed for the next decade?
this if from just one week ago:
Good Time to Sell Property
Lets be honest, $8000 dollars in subsidy for a house is chump change when compared to "Cash for Clunkers". We really need to up it, and use the idea to spur more 2nd, 3rd, and 4th time buyers with a "Dinero for Dumps" program. We give $50,000 subsidy for buying a brand new energy efficient dwelling, the old house is razed to the ground thus cutting supply, spurring the construction industry, and making money for everyone by growing the economy. What's not to like?
Wow Rob Dawg!
re: Nixon, truer words were never spoken... yes, that election was stolen from him starting with 150k votes in TX
and then the late night shenanigans that happened in IL. yes, he took one for the country but I buy your point that
it created a different Nixon...
yes, today he would be a social liberal, was the first to introduce a national guaranteed family income (killed by Dems
in committee)...
ghostfaceinvestah, the problem for many first time buyers is the downpayment - so this is the time to buy for them. Of course this is another group of buyers with little skin in the game - and that worked out well the last time (but this is better - at least these prices at the low end are much more reasonable).
This will create a frenzy in the media too ...
best wishes
Somewhat related, for those of you who have access to American Banker (free registration for the best two articles every day), a good article on how Fannie/Freddie are wasting our money because they don't want to borrow more of our money. Or something like that.
Should GSEs Take Lumps on Defaults? - American Banker Article
"Every month Fannie Mae and Freddie Mac are paying bondholders about $1 billion to cover seriously delinquent homeowners.
Guaranteeing timely payments on mortgage bonds is, of course, the government-sponsored enterprises' main business. But once a loan has been delinquent for four months Fannie and Freddie can buy it out of the pool and stop advancing unpaid interest to investors.
Ajay Rajadhyaksha, an analyst with Barclays PLC, said the companies should exercise this right a lot more often than they have been.
"Every day that passes," he said, "is another day in which wealth is transferred from the U.S. taxpayer" to bondholders.
The problem is that such buyouts would result in staggering hits to the GSEs' capital.
Under bondholder agreements, Fannie and Freddie would have to pay 100 cents on the dollar for the loans, but under accounting rules, they would have to then write the mortgages down to their steeply discounted market prices.
The paper losses would in turn force the GSEs to accelerate their draws on the $400 billion backstop the government has created to keep them solvent."
CR : "Expect prices at the low end to rise (simple supply and demand). "
Prices will rise to eat the $8K tax allowance and a bit more(momentum). Just like it did when the mortgage interest deduction was allowed for the first time, back when.
The median house price in China is about the same in US; average income in China is about 1/7 in US. There is a RRE bubble in China now that is far bigger than it was ever here.
Stop it, you're frightening the horses!
Why the hell is a "part-time student" buying a house? I'm assuming he's not independently wealthy? If not, that's insane but par for the course in BananAmerica.
I wonder what the chances of this getting extended are. They extended CFC to 3x the original commitment. I can just see a bunch of Realtors, homebuilders, mortgage brokers crying to Congress about how they're ruined (and the economy is ruined) unless the credit gets extended another year.
I'm so sick of first-timers feeling like they worked so hard to "scrape together" 3.5%. What a joke..
Re: this if from just one week ago:
There's still a HUGE amount of Merican optimism and self-delusion if the hoped for "Libertarian revolution" is ever going to take place.
I'm thinking it will be a LONG wait.
Just got the San Diego condo in escrow figuring on this situation. It's down 25% from peak, but we're making out OK on it - still up from 2000. The next leg down is going to be a bitch tho. High end cliff diving means more of same for low end once the first timers/tax credits wash through.
Re: Why the hell is a "part-time student" buying a house?
Maybe they left off his regular job which is why he's not a full-time student.
watching the SD condo crash wash towards downtown from the university park neighborhood is a little like a 50s "blob" movie
"I've talked with several people - and there is a buying frenzy right now. First-time homebuyers, especially those with a limited downpayment, are desperate. "
I have been saying this for months here. As i called a bottom in my local market for the low-end back in April.
"I wonder what the chances of this getting extended are. They extended CFC to 3x the original commitment. I can just see a bunch of Realtors, homebuilders, mortgage brokers crying to Congress about how they're ruined (and the economy is ruined) unless the credit gets extended another year."
I agree. There is no question this will get extended. Remember the increase to conforming loan limits was supposed to be "temporary" as well.
I find it amusing that people are calling for a "recovery" (end to the recession is different, as it is more of a technical term), when absolutely none of the support programs have been stopped in the housing market. The Fed is still the only meaningful buyer of agency MBS. the agencies still have the expanded loan limts. the FTHB tax credit is still in place. The forced modifications are still happening. Fannie and Freddie are still drawing down on their committment.
well, NaRa, I would posit that the shift wouldn't have anything to do with any real ideological, intellectual or social shift, and will more occur as a natural result of the expiration of the boomers as a group. In only 15 years, the 1948 babies get their spin on the carousel.
@CR,
This is an exceptional analysis of all the distorted forces in the housing market right now.
Tip of the hat and a bow to you sir. Well done!
HH - getting out while the getting is good. Something tells me our equity will be a LOT more valuable in the coming year(s).
Bulldoze McMansions, hire many illegals, start slapping together POS starter homes on the leveled lot
OT - unless you have investment property in South FLA
Hey peeps....
Lots of chatter about Invest 90L possibly hitting S Fl in a few days as a hurricane. A storm-junkie forum thread about it here - STORM2K • View topic - ATL: TROPICAL STORM BILL (03L)
Most homes under $300-$250k get 5-10 offers. Another bubble forming?
You know, Yancey, that is a damn good point. It would probably be cheaper than renting. And you have the option if some sort of hyper inflation kicks in of keeping the house.... not that I think we will see inflation.
"I have been saying this for months here. As i called a bottom in my local market for the low-end back in April. "
I wouldn't be so sure it was a bottom. Here's how I see it playing out - the government announces a one-year extension to the program, taking the sense of urgency out of it. Foreclosure sales start to pick up at about the same time.
Should drop prices another 10% on the low end.
We need an icon for tongue-in-cheek?
As long as they keep on not foreclosing it is hard to see where the supply will come from to supply the low end. All the while the wave of defaulted property gets bigger and bigger.
Also for all the "frenzy" sales are still quite low historically. In Ventura County and SFV we are still well below historic norms.
The only frenzy is a bunch of FHA borrowers and cash investors jumping at the same houses on the low end.
Re: especially those with a limited downpayment
I like this part the best. A good omen of the future.
OT for this thread, but on topic for many thing discussed here. Video of a retail analyst interview:
Americans No Longer Seduced By Shopping: The Case Against a 'V' Shaped Recovery
The "frenzy" hasn't reached Oregon. I wish it would, there's a glut of condos and entry level homes on the market. You could buy 2 or 3 in an equivalent neighborhood for the price of one in coastal Cali.
"As long as they keep on not foreclosing it is hard to see where the supply will come from to supply the low end. "
That's the thing, they are no longer "not foreclosing".
They are foreclosing. Most banks are tired of the delays, have topped up with capital (and/or now have favorable accounting in place), and are ready to get on with it.
Hearing more and more anecdotes of people here in the Twin Cities who are stopping payment of their mortgage and sitting tight. This could get very interesting if this catches on as it becomes "more normal" (and less stigmatized) to do this. The banks (with an assist from DC) are fueling their own demise. I think it's hilarious.
The 8k credit can be used in addition to the 3.5% down. It can not be used as part of the 3.5% per FHA reqs. I know lots of people who were hot to buy until they figured that out.
I don't know how many times I heard that I had better buy now before I get priced out. Now where have we all heard that before? I'm more then happy to wait for the 8k gimme to go away and then wait a little more as the better parts of my area realize they were too slow to drop prices.
The best story I heard was in the comments on the SacBee article. Some guy said he put his downpayment money into the market rally instead of trying to compete with the frantic knife catcher market. But then again I did the same thing on a smaller basis.
One more thing, what happens when interest rates rise again? I'd think that positioning more into cash for a lower price would make more sense then banking on a free 8k.
When does the FHA limits go back to the $417 max? Is it the same that the tax credit expiration?
So lets see. We stop the foreclosures to try to minimize the growth of inventory. Then we subsidize demand of low end homes with tax incentives and subsidized mortgage rates.
Then we watch artificially boosted demand create a "frenzy" for the artificially low inventory.
makes me ill.
Please. Fist of all, the article said, "she," and that she works at the Denver County Jail. They added that she is ALSO a part-time student, so she sounds quite industrious to me. Second, no, the tax credit does not count toward your 3.5%; it can be ADDED to that to increase your down so your amount financed is lower ... which helps loan-to-value tremendously. Third, first-time buyers who work at the county jail are probably not looking at $150k to $300k homes. They are looking at homes for less than $100k, and for many of these buyers, the payment will be lower than rent so they will come out ahead on the deal.
These buyers are not the knife-catchers you are looking for. They are not speculators, and they honestly need a place to live, and they would rather not continue making rent payments to their current landlords. These buyers are the ones who did NOT over-finance a bubble-home in the last five years, do indeed have their 3.5% and are driving a very hard bargain to boot, between REO and HUD properties and desperate sellers-many of whom are failed flippers or wannabe-landlords.
Game theory and financial acumen? Some of these buyers are quite skilled, amigo. They are striking while the iron is hot. As always, it depends on purchase price, location, financing terms, and the amount of remodeling/refurbishing the buyer has the skill and desire to perform. There are deals to be had for a patient and savvy buyer who plans to remain in their area for the near future.
Note that nothing in the above missive should be construed as "investment advice," and your mileage may vary.
It isn't about the P/T student getting a house. It's about numbers and managing the spin. If the world banking system almost collapsed less than a year ago, then it is highly unlikely that it is off life support now. "They" got to restart the engines. Right now it is like we are burning the furniture in the boilers in hope we get enough steam up to turn the propellers and get the USS America moving again.
CR- Would love to see the stats broken down by state....if possible. I am an appraiser and assume the "frenzy" is occurring in the once high priced bubble areas. Good stuff.....I am seeing the affluent areas of metro Atlanta selling at close to 20%-50% off...depending on price point. The bigger the ticket...the bigger the discount. Golf memberships are next to nothing and most courses have opted for group memberships for several NICE courses. Low priced stuff from 100K-180K is firm and folks of ALL income brackets are scurrying to get in one. The 250-350K suburbs are STILL getting hammered. I am betting that a nice Golf S/d will end up with a median price of $200-250K before this is over...and these are 3,000 Sq Ft homes...with basements in GOOD school districts north of Atlanta. Telling sign for the times....MM
The kid that delivers the paper was also telling me that he was hoping to make his first home purchase before the credit expiration, but was being held back because his parents make him spend his downpayment to buy lunch every day at school.
Expcet the frenzy to end . . . until Congress extends the credit like they did on C4C
The c4kids, 8k credit, c4c, it is about kick starting sales. It also smells of desperation. Desperation is not good
Does the FHA still back loans over 400k????
So really this program is just another prop to the MBS holders/insolvent banks, as it distorts the low end market upwards.
"do indeed have their 3.5% "
When this changes to "do indeed have their 20%" I will know sanity has returned. 20% down, 3x your income and housing would never have a problem going forward.
I guess I can dream.
Effective Demand,
Keep me informed as to any Ventura/Moorpark/Hueneme Triangle SFRs that cash flow. Whether the banks have started to consummate or not no longer matters. There are the get in now group of buyers and no one else behind them in this rush to make the buy in.
Kind of late in the morning... but Rob Dawg, in the interest of fairness, this is for you:
Low priced stuff from 100K-180K is firm and folks of ALL income brackets are scurrying to get in one.
...................
That's exactly the case in my county. No decent entry level stuff on the market. Emphasis on the decent.
Re: Americans No Longer Seduced By Shopping: The Case Against a 'V' Shaped Recovery
This concept is as bogus as the "Americans are saving more" articles.
What are REAL Mericans gonna do? Sit in Cafe's and discusses phillosophy all day?
When this thing blows-over Mericans are going to take EVERYTHING they saved and blow it on a shopping extraviganza like the world has never seen. People only save because they have fear of the future and doubt of about the safety of the future. If you ask REAL Mericans (which means nobody on this site) about the future it'll be the usual delusional Merican optimism (which IS why Merican is so GREAT).
FHA is 700K in some expensive markets......they are also seeing a MASSIVE spike in defaults with under 24 months seasoning. Ginnie is about to fund 1 Trillion in MBS this year....Gov't monies all around.
slightly ot from the main thrust of this-
Yahoo! 404 - Page Not Found
This article once again illustrates the idiocy of wall street analysts.
Buying back a profitable part of your brand is bad compared to making a special dividend with the money?
This analyst still has a job?
From the article:
The transaction would boost full-year earnings, reunite Barnes & Noble's brand and eliminate annual royalty payments for online textbook sales.
Analyst Gary Balter says the acquisition looks good on paper mostly because it will add to earnings near term.
"Taking a deeper look, the deal strategically makes little sense over time as the company essentially doubles its exposure to one of the segments that we believe are most at risk to technology change over the next several years, as well as reduces the cash element of the Barnes & Noble story that has supported it for so long," he wrote in a client note.
Balter added that the deal will eliminate free cash that could have been put toward a special dividend.
The analyst lowered New York-based Barnes & Noble to "Underperform" from "Neutral."
Yeah, paper textbooks are going away. Not.
Paper textbooks are the essence of the new edition swindle, and professors will not allow much cheaper and easily updated ebooks to empty their pockets.
No mention about how Borders is on the edge and a bad Xmas will sink the main competition to B&N.
I am starting to feel like Jeff Matthews.
Someday this war's gonna end...
Needs a wisp of steam coming off of it.
@threetorches: How do you know that? Does it say that anywhere in the article? Please point it out for me.
That's the thing, they are no longer "not foreclosing".
They are foreclosing. Most banks are tired of the delays, have topped up with capital (and/or now have favorable accounting in place), and are ready to get on with it.
Not at the levels implied by NOD, NTS and defaults.
Check my site tmw, I'll have the mid-August trustee sale numbers for several markets in So. Cal. . I don't think they will impressive but I haven't run them yet.
Anytime the words "frenzy" show up in any kind of article that is economy related, it pretty much guarantees trouble down the road.
"The 8k credit can be used in addition to the 3.5% down. It can not be used as part of the 3.5% per FHA reqs. I know lots of people who were hot to buy until they figured that out."
Yes, that is a common misperception, that is not true.
The $8,000 First-Time Home Buyer Tax Credit Program Expands: 5 Things to Know - The Home Front (usnews.com)
"2. Initial 3.5 percent: The measure, however, comes with several key limitations. First, it only applies to Federal Housing Administration mortgages. More importantly, the short-term loans can't be used to pay for the minimum 3.5 percent down payment that FHA loans require. Instead, the loan can be used for closing costs and to finance
the portion of the down payment that exceeds the 3.5 percent threshold. "
frenzy (websters definition):
1 a : a temporary madness b : a violent mental or emotional agitation
2 : intense usually wild and often disorderly compulsive or agitated activity
Why do I keep thinking of the line, " We're from the government, and we're here to help"?
These buyers are the ones who did NOT over-finance a bubble-home in the last five years, do indeed have their 3.5%
3.5% down payment = over-financing.
Oh Ken... thankyouthankyouthankyou.
[that isn't decaf is it?]
Seriously, We joke and praise but your work on HCN is a masterpiece. I can only hope you are rewarded with the recognition and renumeration you deserve.
Besides,
v. 
is a great way to separate the pros from the wannabes.
threetorches, au contraire. some of these buyers are people that DID NOT HAVE ACCESS TO CREDIT from 2002-2008. Basically anyone in the low to middle income bracket who fogs a mirror can obtain an FHA loan.
The first wave of first-time buyer loans are already starting to default as the FHA, FNM, FRE, and ginnie default rates show.
OT:
Feds slow to pay for clunkers, local dealers say
"Bruce McConnell, whose Healdsburg Chrysler/Chevrolet dealership has not been reimbursed for any of the more than 30 vehicles he sold in the “cash for clunkers” program that began last month, said he’s now on the hook for more than $100,000."
“It’s enough to get me worried,” McConnell said. “We did our job. The government hasn’t upheld their end of the bargain.”
poic, I agree that 20% provides a bigger "safety margin," and I think a lot of us question HUD and FHA-backed loans going to homes selling at or above $500k.
That said, if a hard-working jail employee and part-time student can put together $2500 and get herself into a $75k home that saves her a couple hundred a month in shelter expense, I am just not going to complain too much. More good than ill comes of deals like that.
"When does the FHA limits go back to the $417 max? Is it the same that the tax credit expiration? "
Never. Uh, I mean, there is a date, but it is meaningless, as it will be extended without end. I think there is a bill in Congress to extend it through the end of 2010.
That's exactly the case in my county. No decent entry level stuff on the market. Emphasis on the decent. - J
(Sound of jaw dropping.) Seriously? Jeez, is Oregon in some parallel dimension or something? You could buy a lot of nice decent little houses here. What gives with this?
Anything less than 10 (or some would say 20%) is "over-financing", period. Sure, these knife-catchers want the free cash. Who wouldn't, but in the end they'll get burned when the upper end home prices decline because that will further depress prices in the lower end.
Rob,
Will do.
The big deals right now are at the courthouse steps. There is an investment group that has absolutely cornered the market in Simi (about 50%-60% of foreclosures they buy).. and somewhat Camarillo.
There are whole sections of Ventura being ignored though. I think there is even more opportunity in the SFV, much fewer sharks over there relative to Ventura.. but Ventura County is smaller and easier to define. So it is simpler for investors to work over.
Re: hard-working jail employee
Plus this IS one of the real growth areas in Merica. Her job can't be outsourced, anyway.
"You could buy a lot of nice decent little houses here. What gives with this? "
I think the OR (and PDX market, in particular) in still over-priced. Basically its at rough parity with big swathes of socal. Completely ridiculous for this pretentious economically-disadvantaged backwater.
"Check my site tmw, I'll have the mid-August trustee sale numbers for several markets in So. Cal."
Not talking about sales, but foreclosures. Sales take a few months later. Foreclosures are on the rise, sales will start to hit in about a month, month and a half.
Bellingham was on some top 10 places to live lists for a while, so we got a lot of equity locusts.
It's hard to find work here too, so anything affordable is long gone. Especially anything stick-built with a 1+ acre lot.
Continued from last thread - BB&T, with 1,400 branches, will do nicely buying Colonial's 345 branches - other than Texas and Nevada, their markets overlap.
Will BB&T have to eat any future losses from Colonials portfolio?
kcoop, any chance on getting the 'in reply to' comment to show up on hover instead of click?
again, great work.
"Basically anyone in the low to middle income bracket who fogs a mirror can obtain an FHA loan.
The first wave of first-time buyer loans are already starting to default as the FHA, FNM, FRE, and ginnie default rates show. "
Agreed. You can get an FHA loan with a DTI up to 60. totally unsustainable. And many of these FTHBs are defaulting already, they just don't understand what they are getting into. Sometimes they get "counseling". It is useless.
FTHB's have traditionally been terrible credit risks, programs like this 8K only make it worse because you get even less qualified buyers.
Not that originators care - why should they, they are not on the hook for the credit risk.
Not if they do not buy the "assets". When a bank sells deposits, the buyer is assuming a liability, and gets cash equal to the deposits purchased from the seller, in this case, the FDIC (less any deposit premium they agree to pay). They buyer also pays for the value of the fixed assets at the branches. If BB&T does not assume any of the loan portfolio, they have no liability - that stays with the FDIC.
Even if they buy assets, the loans, they usually end up with a loss sharing agreement with the FDIC.
It's hard to find work here too, so anything affordable is long gone. Especially anything stick-built with a 1+ acre lot. - J
You would think that with wages so low and unemployment so high in the Pac NW, prices would drop, but we're still in the middle Case-Shiller numbers. I have no explanstion for this, other than the "Eden effect."
any chance on getting the 'in reply to' comment to show up on hover instead of click?
I'll think about that one. Has to work just right to not be annoying, considering nested comments.
kcoop -
Since it's clear that I will likely never qualify for one as part of any stimulus program is it possible to get a pony icon?
Thanks.
"They extended CFC to 3x the original commitment."
Temporary 250% FDIC hike extended. TALF about to be extended. Temporary postponement of off-balance sheet reporting rule extended. 0-.25% extended.
Fixing too big to fail extended. Capital gains tax reduction extended. Mortgage interest deduction extended.
What have they cut off?
Oh yeah, reality.
Thanx Terry...Even sharing the loss with the FDIC STILL scares me....MM
"other than the "Eden effect."
I think its more due to the fact that bubble defaltion was delayed 12 months in the PNW (desert state equity locust effect). Extrapolating from the bay area (also eden to many) we are about to fall off a cliff this winter.
Got popcorn?
Effective Demand (homepage, profile) wrote (in reply to...) on Fri, 8/14/2009 - 11:08 am
Rob,
Will do.
The big deals right now are at the courthouse steps. There is an investment group that has absolutely cornered the market in Simi (about 50%-60% of foreclosures they buy).. and somewhat Camarillo.
There are whole sections of Ventura being ignored though. I think there is even more opportunity in the SFV, much fewer sharks over there relative to Ventura.. but Ventura County is smaller and easier to define. So it is simpler for investors to work over.
I don't understand the Simi/Moorpark group. I understand the idea but the prices are not to my mind reasonable. Besides, their approach has been to essentially bid against themselves. Aren't they smart enough to let some go and approach after the bids with an offer?
I see the Santa Paula/Fillmore/Piru corridor as an opportunity. Piru could become the escape location for Newhall refugees.
You would think that with wages so low and unemployment so high in the Pac NW, prices would drop, but we're still in the middle Case-Shiller numbers. I have no explanstion for this, other than the "Eden effect."
..................
There are also a lot of old-time farmers who waited their whole lives to sub out acreage and retire on the profits. They sure as hell ain't gonna take less than bubble prices if'n they can help it. And some areas are being prevented from subbing, to preserve farmland, which keeps bigger lots with smaller houses at a premium.
Just a stuck mentality that keeping prices at bubble will somehow scare up buyers....:shrug:
It is all part of the bid the buyer makes - they get a limited time to review the books, and then can make a bid on the liabilities (deposits) they want to assume and the assets (FF&E, loans) that they want to buy. Any buyer in their right mind is not going to bid much for the loans, and will require the FDIC to shoulder a huge share of potential losses.
Meanwhile, you bears had better beware:
Twig snap alerts dog-walker to charging grizzly: Bears in Alaska | adn.com
@Mannwich- the article describes her as a "she," says she works at Denver County Jail, and that she is also a part-time student; and says she is shopping for a home.
I am guessing that she is not looking at a $250k house, that she has her 3.5%, and that she is probably majoring in Criminal Justice or something like it.
Unknown from the article is whether she is married, and if so what her partner does for a living and if they are both applying for the financing together.
Also unknown is the median home value in her area, amount off peak, local employment rates, her income, the amount of loan she is seeking, her debt-to-income ratio, and her shoe size.
My point was that the article gives no rational grounds for attacking this woman for seeking to better her financial position and own instead of paying rent. That was all.
When I lived in Simi, it was a desireable bedroom community because it was somewhat isolated from the crime & grime of San Frenando Valley but had relatively easy freeway access to jobs in both directions.
extending this program is all but a done deal. nobama and the boys need something good to talk about when they get back...
OT:
What Shape Economic Recovery? Watch Back-to-School Spending - Yahoo! Finance
Back to school shopping mentioned-
"Expect the frenzy to end ..."
Good one CR....the same could be said of the economy as a whole. Unless we can run 2 trillion dollar deficits + forever we need to come up with a new plan and quickly.
Legal question:
What happens exactly after the FDIC uses up the emergency credit ($100BB).
I suppose the FDIC is obligated to make it up in assessments to any bank left standing. But what if the money isn't there? The "Corporation" term is a little scary. I suppose their debts are not backed by full faith and credit, and a bank holiday would ensue.
I could look it up, but if anyone knows...
Just a stuck mentality that keeping prices at bubble will somehow scare up buyers.... J
There's that. Like my neighbor who put his 4 acres + mediocre house + shop on the market for 499k.
There's a theory here that the land use laws make so much land "administratively unbuildable" that that alone drives up prices. Plus all the land that's in a slide area, or marshland. The flood we had last year caused the Corp of Engineers to vastly increase the flood zone area of the Nehalem River valley, for example.
And, weirdly enough, the numbers are actually looking "improved," in the PDX area, at least:
Housing market shows improvements | Oregon Business News - OregonLive.com
To keep green shoots hope and change alive I wouldn't be surprised if Obamanomics extended $8,000 federal tax credit for first-time buyers day to try and keep the 'pump'' going ( in cahoots with too greedy to fail Wall St shysters who got $12 trillion ) so peak real estate values of the bubble can be miraculously restored
BONUS: throw another $2B for C4C
I agree...asking prices don't seem to be based at all on household incomes and the current unemployment rates. More what the knifecatchers need to break even. A house adjacent to mine was bought out of probate for $100k in 2007...buyers gutted it to the studs and remodeled it with basics. They've been asking $200k for a year...my other neighbor offered $196k cash so his daughter could move in...was turned down. This is in a neighborhood where there are 8 other homes for sale...most underwater.
threetorches, she is 20 years old for glod's sake! obviously no college degree (bachelors) at that age, unless she is some super genius, in which case I highly doubt her employer would be the prison system, nor would she qualify for the 8k. 'I want it all, I want it now" (will not submit crown to bad youtube) - Isn't that what is wrong with this country? If people are forced to wait and save, they are much less likely to walk away , no?
Re: 2 trillion dollar deficits + forever
Come on, let's have some optimism here. Can you imagine the euphorium when the deficit is "brought under control" and is LESS than 2 trillion. Besides, 2 trillion is only .002 P in the alternate-universe.
My point was that the article gives no rational grounds for attacking this woman for seeking to better her financial position and own instead of paying rent. That was all.
3.5 down is all the rational grounds one needs.
I see the Santa Paula/Fillmore/Piru corridor as an opportunity. Piru could become the escape location for Newhall refugees.
I havent studied the area enough as far as prices and demand, but a lot more homes get bank owned in that area over Simi/Moorpark/Camarillo.
The Simi/Moorpark group didn't spread it out enough.. they educated a bunch of people (too obvious of what they were doing) who are now their competitors all in a narrow area. I think a good interest rate spike or release of foreclosures would really hurt them but TPTB won't give me that gift lol.
edit: The other issue is, by concentrating on a narrow area they will stabilize it and give themselves fewer opportunities and sales in the future. When (if) all the agents figure out they have few sales because of the few investors they will be pissed.. the one group I think is all agents so they probably don't care.
There is a 5 acre hay field down the road from me, zoned open space so you have to pay back taxes to build on it. Been on the market for years and is only down to $249K so far. Wtf?? Pre-bubble would have been maybe $60.
I bought my 1st house at 20 yrs old. FHA too. But we had double income, some cash down, and it was well within the 3x income limit. I lived there 15 years and sweated plenty of equity in that baby
How dare that prison worker/student steal profits from Wall Street?
Actually, I've always been against the tax breaks, especially for long-term cap gains and mortgage interest. Flat 20. No exceptions.
Re: Flat 20. No exceptions.
Kinda removes one of the perks of BEING a politician tho. Giving tax breaks to your buds.
broward (homepage, profile) wrote on Fri, 8/14/2009 - 11:25 am
When I lived in Simi, it was a desireable bedroom community because it was somewhat isolated from the crime & grime of San Frenando Valley but had relatively easy freeway access to jobs in both directions.
Development to the north on the I-5 courtesy of LA County has absolutely destroyed any commute value to Simi vis downtown LA or The Valley. At the same time the planner cadre has crushed much of what made Simi valuable as an independent entity. As a general rule new development was 3x the existing density. Thus what you thought of as Simi is at least twice as dense now with the inevitable urban ills.
With approval, they can actually borrow up to $500B from Treasury. The theory is that they will then increase assessments on the surviving banks to pay back the loan. There is history for the insurer to go bust - FSLIC, which used to isure S&Ls - it went bust, was recapitalized by the taxpayers and then run by the FDIC. The FDIC had two insurance funds at that time, one for banks and one for the thrifts. The thrifts had a higher assessment to pay off the loss.
Been on the market for years and is only down to $249K so far. Wtf?? Pre-bubble would have been maybe $60. - J
The builders here have "banked" land for years to get ahead of land use constraints, especially the run-up due to the Urban Growth Boundary delays. They financed that, of course, and now some of them are selling to all comers, which is unheard of here. But prices are still high-- 160k for a 10,000 square foot lot in the 97229 area code, on the outskirts of Portland.
If you want something really bad,you are more than likely going to get something really bad.
I have a hopeless fantasy of buying back my house's original homestead land...tearing down all the foreclosed & abandoned empty houses built over 'my' farmland....joke's on me, since nothing is getting foreclosed on yet. The one house up for sale on my land went at a short sale.
And that is the problem. That prison worker/student isn't stealing profits from Wall Street. Mortgage brokers will still get paid - yes there can be YSP on FHA loans, the loan will still get serviced by some entity affiliated with Wall Street. And should this person - with very little skin in the game elect to stop paying - it will mean more fees for the servicer until it is ultimately foreclosed on - at which time the tax payers will get to bear the cost of the failure to pay.
yogi, i agree. and no cap on income for social security. and pay the 6+% social security that one would pay on income on capital gains, too. how much of that blackstone ceo's 720Million $ last year get taxed for ss? same amount as my sorry a$$.
Simi's main value still is.. as broward described.. the sole and simple fact that it isn't the SFV.
Simi is just gross. But LA traffic is MUCH lighter than a few years ago, as long as you're not talking about the 405 between LAX and the 101, which is as bizarre as ever. In any case, real men know how to use streets like Sepulveda or Victory to get around. Not a big deal.
Thus what you thought of as Simi is at least twice as dense now with the inevitable urban ills.
Inevitable is probably right.
I lived in Palmdale in the early late 1980s.
I revisited it about ten years later and it was swamped with gangs and crime.
I couldn't believe it happened so fast.
I've said it once and I'll say it again: how can there be a bottom in the low-end without a bottom in the high-end? High end homes falling in price puts pressure on mid-range homes, and those falling prices put pressure on low-end homes.
Therefore, as CR indicates, there is only a temporary bottom in the low-end.
Which is a ludicrous price, even for that part of town. That pencils out to $800k per acre.
since nothing is getting foreclosed on yet. The one house up for sale on my land went at a short sale. - J
That's the thing-- the huge wave of foreclosures that are supposed to be here, just waiting to be snapped up, has not really materialized. There are some, but they are generally dogs in bad neighborhoods, basically tear-downs. I googled RealtyTrac, and the scuttle is that their listings are very misleading-- out of date, and sometimes just showing the junior lien rather than the real price. I'm not seeing the 50% off sale here, for anything worth buying.
Agreed. You can get an FHA loan with a DTI up to 60. totally unsustainable.
Where is there a 60% DTI FHA? I shopped HUD, FHA and all the streamline and 203k variants, CalFHA, USDA etc loans as recently as Jan 09 and I was stopped cold at 41% each time. Not saying it isn't available but I sure wasn't able to find it.
@threetorches: Not "attacking" at all. Just questioning the wisdom of a 20-year old "part-time student" buying a home with only 3.5% down.
some slightly-smarter-than-average californians will always be moving RE equity up to the PNW, even in times like this. sure, buying a SFR for over 300K in the PNW is dumb, but it is outweighed by the smartness of selling a still wayyyy overvalued rancher in a place like west LA or irvine.
Re: my house's original homestead land
When your parents owned the land the US population was probably half what it is today. I bet Beijing had some nice 10 acre plot 1500 years ago.
(I think it was Confucius that said: He who buys today will have happiness in the future, they're not makin any more land, ya know.).
Someone needs to do a "Larry the Realtor" of Palmdale.
What happens exactly after the FDIC uses up the emergency credit ($100BB).
They borrow more.
If there is one lesson we all should have learned from this by now, its that if something is even remotely successful in fixing a financial issue, it will be extended and expanded. If something isn't successful, it will be expanded until it is, then extended.
If they FDIC needs more money, they will get it. If people need 4.5K to buy a car, they will get it. If people need 8k to buy a house, they will get it. If the FHA needs to offer subprime loans at even better-than-subprime rates with worse than subprime underwriting, they will offer it.
This has clearly been deemed "the way out" by the powers that be.
Mike I've stated more than once my view that the 8k is mainly welfare for the banks, with the buyer and seller getting a small cut.
They can't foreclose on all the underwater homes and stay solvent, and Washington knows it. They're not even paying their condo assessments in Illinois, someone said earlier.
"Can you imagine the euphorium when the deficit is "brought under control" and is LESS than 2 trillion."
I can imagine the spin. But spending was going to explode even if we didn't hit this wall just due to demographics. They will never get these deficits under control. Wait until that little ugly truth enters the collective conciousness of the markets.
The only way they have a chance of even lowering the deficit (to say an even Trillion or something) is if we have a very strong "V" shaped recovery that is sustained by private investment and demand and that lasts for a decade or more. And a reduction in deficit = a drag on the economy as far as growth in GDP so the recovery would have to be so strong it could offset reduced Gov't spending and show real growth.
Not. Going. To. Happen.
c4c = BB's helicopter sortie
some slightly-smarter-than-average californians will always be moving RE equity up to the PNW, even in times like this. - HH
I can't document this, but just anecdotally, I think the Pac NW draws from all over the West, and some from the Pacific. The out-of-state licenses I see tend to come from Idaho, Hawaii, Alaska, Canada, Washington, etc. The Cali plates are there, but I think it's more than that.
Re: Just questioning the wisdom of a 20-year old "part-time student" buying a home with only 3.5% down.
It's actually pretty wise from HER point of view. If things turn out badly, she can walk away (if she's smart). If things turn out good, she wins.
I wouldn't recommend ANY 20 yo (or anybody else) to save in Merica.
some slightly-smarter-than-average californians will always be moving RE equity up to the PNW
Like free trade, the thing will eventually reach an equilibrium for some period of time.
The outflow from L.A. died down a lot after L.A. prices fell and refugee area prices rose.
Plus there's local features that put people off like the weather.
I worked with a guy who moved to Portland.
I had dinner with him one year later after he'd moved back to L.A.
When I left Seattle, there were lots from AZ & UT coming in....
Sad part about my tiny farm is that people envy my lot size (visitors from Seattle) which is about 10 of my former Seattle house lots....
@NotaReal: Sure, why not take the free cash and low-risk proposition but from a bigger picture standpoint, it's just not wise to be promoting this kind of behavior. We're going to destroy this countr supporting asset prices at all costs.
broward (homepage, profile) wrote on Fri, 8/14/2009 - 11:41 am
Thus what you thought of as Simi is at least twice as dense now with the inevitable urban ills.
Inevitable is probably right.
I lived in Palmdale in the early late 1980s.
I revisited it about ten years later and it was swamped with gangs and crime.
I couldn't believe it happened so fast.
Even I was shocked by that transformation. I know how it happened but it is too painful to recount. When I first started going to our cabin in the early 80s I relished the Sierra Highway turn off for the darkness. Now it is 30 miles of solid sodium lights. They aren't even in sight of the bottom.
"yes there can be YSP on FHA loans, the loan will still get serviced by some entity affiliated with Wall Street. And should this person - with very little skin in the game elect to stop paying - it will mean more fees for the servicer until it is ultimately foreclosed on - at which time the tax payers will get to bear the cost of the failure to pay."
The rules say you can't stick YSP on a FHA or USDA and the lenders whine up a blue streak. But sit down with the regs and you will find a way and I'm not making a volume call.
I had a friend, a broker, give me a basic outline on how to be a broker of conventional loans. He challanged me to find a way make money off the transaction and within 10 minutes I came up with 3 ways to hide fees with just a pad of paper and a calculator. Imagine what a person employed in the field with excel and a starving family could accomplish.
To summarize, you are exactly right. nothing has changed.
Didn't you just make a ton of money riding the market up from the depths?
I did, and I count that as my stimulus money.
Liquidating a bunch of that was beyond blissfull to liquidate credit card called in debt (thanks, Jamie D, I won't forget when it comes time to stiff you on my heloc!)
This market over the last six months was the biggest gimme in history.
Now, if you can't see the writing on the wall, just look at the supertankers of oil piling up waiting for even higher prices.
Only bunch stockpiling resources at this time are the Chinese, and they are communists who are only concerned with a real return on their dollars, not wallstreet alpha.
Someday this war's gonna end...
The rules say you can't stick YSP on a FHA or USDA and the lenders whine up a blue streak. But sit down with the regs and you will find a way and I'm not making a volume call.
I had a friend, a broker, give me a basic outline on how to be a broker of conventional loans. He challanged me to find a way make money off the transaction and within 10 minutes I came up with 3 ways to hide fees with just a pad of paper and a calculator. Imagine what a person employed in the field with excel and a starving family could accomplish.
To summarize, you are exactly right. nothing has changed
One just needs to stroll over to the broker outpost forum to see that indeed there are ways to stick YSP on FHA.
Nothing has changed.
"first-time buyers accounted for 43% of sales in Q2"
They were the only ones who were not not underwater...yet. Kind of hard to move up or move down if you are under 200-500K or more. What happens to the credit of the walkaways? Could some be claiming first time buyer status, for the incentives?
Where do reporters find these characters to report on? It's always baffled me.
For those of you wondering what a 20-year-old prison guard/student credit risk looks like...AKA the new hope of the US housing industry:
http://profile.ak.fbcdn.net/v228/949/117/n625029467_7537.jpg
It's one of those two girls.
Plus there's local features that put people off like the weather.
I worked with a guy who moved to Portland.
I had dinner with him one year later after he'd moved back to L.A.- B
This is true. Lots of people have Seasonal Affective Disorder. I ended up with a Vitamin D deficiency, because I was wearing sunscreen out of habit, and not enough light was reaching my skin. People don't realize how grey it is here, most of the year. It is beautiful, though. And the natives don't seem to mind the darkness.
Re: Not. Going. To. Happen
Ya know, it's people like YOU that cause recessions.
I'd suggest 100mg of Hopium. There's also a new experimental drug call exuberance(tm), but I'm not sure if it's available yet. I only heard about it yesterday.
Of course, like all mind altering drugs, you may experience side-effects. If you experience lengthen-green-shoots for over 4 hours you should consult with your CR doctor immediately (and, OF COURSE, stay away from lawnmowers).
If this doesn’t work, I can recommend Fucitol (50mg) which I take everyday before work.
fucitol - Google Search
Here's a link to a brokeroutpost discussion of YSP and FHA
http://forum.brokeroutpost.com/loans/forum/2/274438.htm
"One just needs to stroll over to the broker outpost forum to see that indeed there are ways to stick YSP on FHA."
Or just go to the mortgage grapevine to find examples of 60 DTIs on FHA loans.
Re: We're going to destroy this countr supporting asset
It's already destroyed. We're just watching the post-game-show.
Fried I left you a response on the last thread.
Where do reporters find these characters to report on? It's always baffled me.
As I recently mentioned, i helped my cousin(s) move into a new house which is effectively less than their current rent.
As far as I can tell, one of them IS a student in their twenties.
HollywoodHack (homepage, profile) wrote (in reply to...) on Fri, 8/14/2009 - 11:41 am
Simi is just gross.
Oldthink HH.
But LA traffic is MUCH lighter than a few years ago, as long as you're not talking about the 405 between LAX and the 101, which is as bizarre as ever.
You obviously haven't hit the Victory to Castaic Junction corridor during rush hours in the last 5 years.
In any case, real men know how to use streets like Sepulveda or Victory to get around. Not a big deal.
Real men lane split on BMW RSs.
"BB&T Corp. is taking over Colonial BancGroup Inc., the Alabama lender whose collapse would mark the biggest US bank failure this year"
Presumably, that saves the FDIC some $ and does not count as a BFF?
summer in the olympics and winter on the islands is a good plan. a bit like the classic hamptons/palmbeach cycle on the east coast.
Castaic Junction corridor
This has the feel of "Alpha Centuri Junction Point".
I guess you had to be there.
"Oldthink HH. "
uh, not really. slimy valley then and now. but really more in the future than ever.
if you're going to exile yourself out to Castaic you might as well give up, buy some treasury strips and move out to Barstow.
Opps
again
Thanks for the link Ghost. Now to go snooping.
Or any Ninja bike.
I taught my son what they were when he was 2- the first time my mother heard the words "organ donors" from the back seats she almost had to pull over from laughing so hard.
Just remember, a motorcycle is proof that we are only smart monkeys showing off- with occaisional evolutionary deadends.
Someday this war's gonna end...
summer in the olympics and winter on the islands is a good plan. a bit like the classic hamptons/palmbeach cycle on the east coast.
.....................
Living in Whatcom county isn't too bad. Right close to the salt water, with Mt. Baker just up the road. We get about 2 weeks of heat wave and 2 weeks of 'blizzard' most years. But I've never been out of the PNW, so I'm biased
Buy now or be priced out til December!
move into a new house which is effectively less than their current rent.
You won't really know that until they sell it. If they aren't underwater when they want to sell, it will have been a decent deal for them.
First Time homebuyer = not owning a home in the last 3 years.. There are many programs for low income folks to buy a home right now. Section 8 subsidies will pay 70 percent of your monthly mortgage. So imho this is the government bailing out the banks allowing the banks to give away these homes to investors/flippers who flip to low income folks in bidding wars with government money anyway where the government pays the down payment and closing costs and then subsidize the purchase by using FHA backed loans and after closing paying up to 70% of the monthly mortgage through section 8 home ownership help.
I dream about becoming low-income someday..
Must be frustrating to be a truly well-qualified potential buyer, not wanting to buy into a still-bubble-market, and yet the gubmint keeps the cheese flowing the the charade going.
Yogi,
answer for you on previous thread. and 8/10 of 200 million is 40 million, not 100 million.
That's 40 with a 4.
Must be frustrating to be a truly well-qualified potential buyer, not wanting to buy into a still-bubble-market, and yet the gubmint keeps the cheese flowing the the charade going.
Yes. Also frustrating to have lost hundreds of thousands of dollars of said qualification by being on the wrong side of the government printing money and propping up zombie institutions, REITs, and insurers.
Paying taxes to a government that is blatantly lying, ruining my trades, artificially propping up home values so that I cannot purchase. But I feel fortunate that they are protecting me from invisible enemies that want to kill me, promising me 70 cents on the dollar for future social security payments, and....actually I can't think of anything else the federal government is doing. All the useful stuff is at the state and local level.
Go America!! We're number one!!
"Must be frustrating to be a truly well-qualified potential buyer, not wanting to buy into a still-bubble-market, and yet the gubmint keeps the cheese flowing the the charade going."
Nope.
Just got a significant rent concession on a "close-in" home in PDX that we have been renting for 9 years. I now pay less than 4% of my gross income on housing!
.....and re. the FDIC:
" FDIC Chief Bair says parts of Obama's financial rules plan won't fly as Treasury struggles to push them.......That is a reality the administration needs to deal with."
......sounds like we have a "chest-beater" here......
Yahoo! 404 - Page Not Found
And the BDI is suggesting that the Chinese might be getting close to topped off...been digging into corporate, asset and VPP purchases by the combined Chinese NOC's - big ramp up last year (extension of a trend) and the year to date rate if sustained will surpass that - when they are done things will be interesting...
I see consensus is now that repeat transactiion home price indexes, that were ariticially depressed by the sloppy selling of REO in Q4 and the first two months on this year, will now show some pretty decent gains in Q2 and Q3. It is a vaild question as to whether to bounce in measured HPIs == that strangely many analysts didn't see until recently, evern though the data available were crystal clear == will push home prices down later this year, and whether that drop will fully offset the big gain observed from february to july. I don't know the answer, but no competent housing analyst who follows all regional data missed the big jump in repeat-transactions HPI in late spring and summer.
So many properties out there are distressed sales, I wonder if someone shopping now is likely to result in a close before Nov 30. My offer on a short sale was accepted on May 17 and I have still had absolutely no word from either the first or second mortgage holder as to whether the deal will be approved - 3 months later. In fact, I'm a little worried that my deal still won't be done by Nov 30, and that will have been 6.5 months! Both mortgages are held by Wells Fargo, incidentally (where I've been a customer for 20 years, but no longer, once this deal is done).
I'm a first timer, who quietly saved all through the bubble in order to have 15% downpayment in coastal california and have another 7.5% in liquid savings after the deal is done (not including my $8K), and I bought in a location where 15% is enough to put down 50% in much of the country. Not all of us are just wading out to get in over our heads in some kind of second wave of bubble madness. I feel like I am pretty justified in collecting $8K just for being one of the good guys in all the mess - no unsecured debt, no crazy mortgages during the bubble, a reasonable downpayment on a very modest home in Pasadena, enough savings to get through a reasonable economic hardship intact, and I've been in a high tax bracket for years with minimal deductions since I was priced out of the housing market. Personally, I think that if we are going to have a credit in order to stimulate the housing market and 'support' prices, then the credit ought to be proportional to the conforming loan limit for an area, or something else that reflects the cost of housing in the location of the purchase. $8K is big chunk of a downpayment on a $150K home in Kansas (more than the 3.5% requirement for an FHA loan, in fact). However, It's only a little more than half the closing costs on a home in coastal california which costs 3 times as much.
And for what it is worth, my $8K will almost certainly get plowed right back into my local economy as I buy furniture and appliances to replace the crap I've been using for years in the homes I've rented.
"Just remember, a motorcycle is proof that we are only smart monkeys showing off- with occaisional evolutionary deadends."
Citizen AllenM, You have absolutely no clue of which you speak.
The vast majority of motorcyclists couldn't care less about what anyone else thinks of what they are doing. We do it because we love it. For those of us that do it, there is no way to have more fun getting from point A to point B that costs less than $200,000, by land, sea, or air. When was the last time you saw any of the terrain between you and your destination on a trip longer than 500 miles? When was the last time you felt the temperature shift by 10 degrees or more as you dropped into the microclimate between two rises on the road? Did you even know such microclimates exist? How often do you really experience the sights and smells of the terrain you pass through on a road trip? For that matter, when was the last time you took a road trip? Instead of teaching your son to jump to condescending conclusions about others and otherwise come across like a pompous a*s, how much fun could you have teaching him to ride a dirt bike or riding the countryside with him sitting pillion behind you? Some of us choose to teach our children how to be the best people they can be by engaging in such activities with them, rather than teaching them to make snap judgements about others.
To be a successful motorcyclists requires skill and dedication to constantly improving those skills. But once you've removed the drunk riders, the unhelmeted riders, and the unlicensed riders from the statistics, our odds suddenly don't look nearly as bad as you might think.
Life is full of dangers. You could slip in the tub and die tomorrow. The important thing is to be sure that you have lived life to its fullest during each and every day you are given on this earth, and some of us do that, in part, by throwing a leg over a bike on occasion and going for a ride. If my exit from this life should happen to result in my organs being available to save the lives of others, whether in a motorcycle crash or otherwise, then I'm proud to be labelled an organ donor and, quite frankly, totally fail to find mirth in that label. I sincerely hope that you or your family do not one day find yourselves in need of such a donation or you just may wind up regretting your laughter.
A great realtor I've found for those in the Austin area is Kenn Renner. He really knows what he's talking about concerning this $8000 tax credit for first time home buyers. He helped me out in a big way. Check out his website at Austin TX Real Estate Broker :: Buy Sell Investment Home Videos :: Seminars
Hi1
i think camble survey seems to be real because now the quantity of home buyers are reducing rapidly just because of the current economical situation!
people have no capacity to buy any thing they are living with so many difficulties!
good article and a very nice attempt!
Reverse mortgage lenders
why be priced out till December? i also want to buy but thinking what will be a better step for me?
Reverse mortgage lenders
Good broward ! i think now people are slightly moving towards different places! great work
may be now people are thinking to go to take the rent houses instead of buying?
Reverse mortgage lenders