How's your housing market? (1 Viewer)

[tommyGunZ]

I'm not coming back. Gig Harbor is a relatively unknown paradise. I love it here. Waiting for the offseason and buying a 26' combination cruiser for enjoying the Sound.

 

[the rover]

oh ####. I forgot. It rains all the time, non-stop. cold, gray and rainy. all the time. miserable, suicide-inducing weather. stay far, far away.

 

[piratemike]

What can you tell me about the renter's market gunZ? I'm ready for a new lease.

 

[Red Apples]

Los Angeles Market is offically slowing.

We decided to explore moving our house here in Venice. Realtor is quoting us a list of 1.275

4 months ago it was 1.45

we bought at 1.1 so not bad for 15 months but still not 1.45

 

[BlueOnion]

I'm not coming back. Gig Harbor is a relatively unknown paradise. I love it here. Waiting for the offseason and buying a 26' combination cruiser for enjoying the Sound.

It's not all that, but definitely a secret.They still got a race track there don't they?

 

[Horses Mouth]

anyone informed about the south florida market? i'm in fort lauderdale and noticed a lot of houses for sale but the prices are holding.

 

[tommyGunZ]

"Homebuilders Confidence Shrinks to 15 Year Low"

 

[tommyGunZ]

anyone informed about the south florida market? i'm in fort lauderdale and noticed a lot of houses for sale but the prices are holding.

obviously a biased site, but some interesting links and data: "Sign of where S. Florida RE market is heading"

 

[John Mamula]

good article.

note though that the west and south (which actually improved) is still at or over 50.

regardless, that still has nothing to do with a bubble and you will be better off buying now than in 8 months from now with interest rates rising.

but keep on waiting tommy. when the market corrects and you still not wanting to buy (likely because rates will be too high for you) you will then see housing prices go back up and you will wait for the next correction in 10 years.

 

[tommyGunZ]

good article.

note though that the west and south (which actually improved) is still at or over 50.

regardless, that still has nothing to do with a bubble and you will be better off buying now than in 8 months from now with interest rates rising.

but keep on waiting tommy. when the market corrects and you still not wanting to buy (likely because rates will be too high for you) you will then see housing prices go back up and you will wait for the next correction in 10 years.

Buying now in San Diego is absolutely idiotic. Reductions are everywhere, and the -1% YOY drop in the San Diego median last month isn't anywhere close to representing where the market is right now. Inventory at record highs and sales of 30% YOY, and prices just starting to dip, and you're advocating "buy now"?

Glad I didn't take your advice a few months ago on this place 2 blocks from my apartment, I'd be out $100,000:

Price Reduced: 04/29/06 -- $599,000 to $549,000 Price Reduced: 07/13/06 -- $549,000 to $499,900

1975 BACON ST, SD - Ocean Beach, CA 92107

Listing Price: $499,900*

Your ZipRealty rebate up to: $2,999**

Bedrooms: 2 Bathrooms: 1

Square Feet: 600 Lot Size: N/A

Listing Date: 01/15/06 Year Built: 1920

 

[tommyGunZ]

Oh, and all those exotic loans that are beginning to come due (trillions of ARMs reset between 2007-2010):

A trio of reports on the borrowers situation in California. “Orange County’s foreclosures nearly doubled in June, rising to 65 property sales from 35 in May. Overall, foreclosure activity, including default warnings to delinquent homeowners, was up 60 percent last month, the report shows. The county had 639 new foreclosure filings last month, up from 399 in May.”

“Riverside County had one new foreclosure filing for every 438 households, the area’s highest ratio and the third-highest in California.”

“About 3,350 homes in Riverside County, representing one in 175 of its households, were in foreclosure proceedings at some point in the second quarter, according to the firm. The U.S. Federal Reserve Bank has implemented 17 quarter-point raises in the so-called Federal Funds Rate since late 2004. The result has been that even initial payments on fixed-rate and adjustable-rate mortgages are considerably higher than they were a couple of years ago.”

“‘They haven’t gotten 18 pay raises,’ said Victoria Johnson, president of the North San Diego County chapter of the California Association of Mortgage Brokers.”



“The increase in foreclosures was just as dramatic in San Diego County. About 2,600 homes were in foreclosure proceedings at some point between April and June, compared with 945 in the same period last year.”

Foreclosures up ~ 300% from last year, and 2006 has just a fraction of the ARM resets compared to the resets coming in '07-'10.It's gonna be UGLY.

 

[John Mamula]

good article.

note though that the west and south (which actually improved) is still at or over 50.

regardless, that still has nothing to do with a bubble and you will be better off buying now than in 8 months from now with interest rates rising.

but keep on waiting tommy.  when the market corrects and you still not wanting to buy (likely because rates will be too high for you) you will then see housing prices go back up and you will wait for the next correction in 10 years.

Buying now in San Diego is absolutely idiotic. Reductions are everywhere, and the -1% YOY drop in the San Diego median last month isn't anywhere close to representing where the market is right now. Inventory at record highs and sales of 30% YOY, and prices just starting to dip, and you're advocating "buy now"?

Glad I didn't take your advice a few months ago on this place 2 blocks from my apartment, I'd be out $100,000:

Price Reduced: 04/29/06 -- $599,000 to $549,000 Price Reduced: 07/13/06 -- $549,000 to $499,900

1975 BACON ST, SD - Ocean Beach, CA 92107 

Listing Price: $499,900*   

Your ZipRealty rebate up to: $2,999**

Bedrooms:  2  Bathrooms:  1 

Square Feet:  600  Lot Size:  N/A 

Listing Date:  01/15/06  Year Built:  1920

you wouldn't be out anything as you wouldn't be selling it.also, people who are selling (i know as both myself and my fiance are selling our condos to buy a home) are willing to cut prices as they are sitting on 150%+ gains. if i only gain 150% instead of 200%, i am not crying in my milk. i am willing to cut prices on my place to sell in a reasonably short amount of time to get into a bigger home cheaper. what i save on a larger place is greater than what i will lose on a smaller place.

you see tommy, people price their places at the maximum amount they think they can get...in this recent market people were adding on 20% on top of last year's price. now that they realize prices are coming off last year or holding steady, they are getting their selling price back in line.

i would have hoped that if you were looking at that condo (which you weren't, we all know you hand picked one for your example) you would have comped out the market and realized the asking price was too high and would not have made an offer.

keep on waiting tommy, let me know how renting turns out for you in the long run.

 

[NFL Sunday Ticket]

Well,

We're numero uno on this list so that can't be good

right there with you (haverhill, ma). this bubble stuff scares me and i usually try to avoid threads like these. however, according to zillow, my house is down only 4% ($413,000) from its peak ($431,000) in Jan06. on the positive side, it is still up 18% from what i bought it at 2 years ago ($365,000). i will be extremely happy if, after all is said and done, it is still worth what i paid for it.

 

[John Mamula]

Oh, and all those exotic loans that are beginning to come due (trillions of ARMs reset between 2007-2010):

A trio of reports on the borrowers situation in California. “Orange County’s foreclosures nearly doubled in June, rising to 65 property sales from 35 in May. Overall, foreclosure activity, including default warnings to delinquent homeowners, was up 60 percent last month, the report shows. The county had 639 new foreclosure filings last month, up from 399 in May.”

“Riverside County had one new foreclosure filing for every 438 households, the area’s highest ratio and the third-highest in California.”

“About 3,350 homes in Riverside County, representing one in 175 of its households, were in foreclosure proceedings at some point in the second quarter, according to the firm. The U.S. Federal Reserve Bank has implemented 17 quarter-point raises in the so-called Federal Funds Rate since late 2004. The result has been that even initial payments on fixed-rate and adjustable-rate mortgages are considerably higher than they were a couple of years ago.”

“‘They haven’t gotten 18 pay raises,’ said Victoria Johnson, president of the North San Diego County chapter of the California Association of Mortgage Brokers.”



“The increase in foreclosures was just as dramatic in San Diego County. About 2,600 homes were in foreclosure proceedings at some point between April and June, compared with 945 in the same period last year.”

Foreclosures up ~ 300% from last year, and 2006 has just a fraction of the ARM resets compared to the resets coming in '07-'10.It's gonna be UGLY.

watch out everone!

0.50% of homes are foreclosing.

it's going to be a bloodbath!



if you think that all ARMs are comprised of people who can't afford a higher payment, you are severely mistaken.

 

[bigbottom]

Current market value for our place in Orange County is still around 250% what we paid for it.

 

[BGP]

I respect bagger's opinion on this, but I generally try to take anyone's opinion on a market with a grain of salt when they're invested in it.

I really don't have much of an incentive to artificially inflate my opinion of the R/E market here...I don't think anyone here will be buying any land from our group.

I'm not saying you do, and I seriously respect your opinions on this. I just think that when you have skin in the game, you tend to unconciously believe the things that are most favorable to your position. People who own Alexander don't think Hutchinson was that important. People who own Sirius Radio think that they're going to bounce back. People who work in real estate tend to think the market's going to be fine. It's just how things work.

I don't know bagger but in my investing experience I completely agree with your view. The overwhelming majority of investors fail to hold a truly critical eye. They fall in love with their position. I notice that the ones that have such an eye tend to have the following traits:1. They are not afraid to doubt themselves. They are perfectly prepared to tell you they do not know what is going to happen.

2. They are perfectly willing to represent several different views. They are constantly reviewing their opinions.

People that show me these things tend to be the best investors.

I can say that bagger's post did NOT display to me these traits. He did not express any doubt in his view. He dismissed even credibile analysts that disagreed by saying "most analysts here understand that".

Based upon his post, I would believe his opinion is too biased.

When I'm discussing the gold market, I'll tell you what percentage of confidence I have. Even today, I see the gold market as unclear - it depends on a lot of factors that need to be resolved. I'm on the sidelines. I don't mind telling you that.

 

[John Mamula]

the gold market isn't highly regional...

 

[tommyGunZ]

you wouldn't be out anything as you wouldn't be selling it.

Are you kidding? I'd be "out" of $100,000 in equity, and I'd be chain linked to this place for 10 years hoping that it gets back to my original loan amount so that I don't have to bring money to closing if I need to move. And that's if it only falls to 499k. What if it falls to 399k? Or 299K?

also, people who are selling (i know as both myself and my fiance are selling our condos to buy a home) are willing to cut prices as they are sitting on 150%+ gains. if i only gain 150% instead of 200%, i am not crying in my milk. i am willing to cut prices on my place to sell in a reasonably short amount of time to get into a bigger home cheaper. what i save on a larger place is greater than what i will lose on a smaller place.

I couldn't agree more. But why should I buy now when every historical market indicator points toward a correction? In your example, you're willing to cut prices so much because you have huge equity gains. That's awesome - once you sell your condo at 150% gain (instead of 200% gain), your discounted price is now the new comp for similar condos in your neighborhood. With the inventory at record highs, then next seller will have to drop to 140% gain if he wants/needs to sell. And so on.And as you pointed out, people can afford to do this, because they have so much equity. Hell, a 50% short term equity gain is fantastic, so if reductions continue and the market corrects to the point where people are willing to sell a place they've owned for 5 years for 50% gain, the sucker who bought your condo at 150% gain (a bargain according to you) is out a ton of equity. This is the way markets get back to equilibrium.

you see tommy, people price their places at the maximum amount they think they can get...in this recent market people were adding on 20% on top of last year's price. now that they realize prices are coming off last year or holding steady, they are getting their selling price back in line.

Exactly. And IMO, they will continue to do so. Housing prices even at 2004 levels are way out of line with re: to historical norms based on income to housing price.

i would have hoped that if you were looking at that condo (which you weren't, we all know you hand picked one for your example) you would have comped out the market and realized the asking price was too high and would not have made an offer.

You're 1/2 correct: that place is far too small for me and wifey but we've been watching it and several others for months since it's right down the street (2 blocks from the ocean).

keep on waiting tommy, let me know how renting turns out for you in the long run.

Who said anything about renting long term? Again, I'll happily buy (I'm pretty ####### anxious to be honest) when the price of my mortgage is anywhere close to the price I'm paying in rent. To me, it makes absolutely no since to pay 3k in mortgage for the same place I can rent for 1k, especially if I believe that housing in my area is falling in the short term. Why rent the money from the bank for 3X the cost instead of renting the condo? Especially if a correction is happening?

 

[BGP]

An example of a great analyst we know is Bill Belichick. He displays a lot of the traits I'm talking about. He wins the freaking super bowl, and they ask him about how fun that must be and he comes back with saying "well we've got a lot of issues to worry about on the defense and this didn't work right and I don't know how we are going to fix the problems over here" and on and on. You would think the team had gone 0-16 by listening to him.

 

[commisholio]

Oh, hell, I actually read a BGP post and thought that he made some sense. This has to be a sign of the impending apocolypse.

 

[TommyGilmore]

watch out everone!

0.50% of homes are foreclosing.

it's going to be a bloodbath!

Supply & demand down?

 

[Gigantomachia]

St. Louis has slowed down considerably. The pendulum has swung more towards the middle now, actually favoring buyers more. Good thing, because I'm starting to get sick of the mom n' pop real estate places that are popping up everywhere in my area.

If you're looking to move to St. Louis, it's looking pretty favorable for you. Lots of homes for sale, very saturated market, and lots of realtors looking for business. My mom's trying to sell her house and she's had to whack $6k off the listing price because the damn thing just won't sell. Too many tire-kickers. Never seen it before in my life.

Construction still booming on NW side (IL) where I live. Folks in StL sick of overpaying for 1/2 the house they'd get over here for an extra 20 minute drive. Used to live on the fringes of civilization and now I'm the little guy in the middle of suburban sprawl.

Just wait till they build that bridge connecting I-70 across that little river you all have there.

 

[Gigantomachia]

watch out everone!

0.50% of homes are foreclosing.

it's going to be a bloodbath!

Supply & demand down?

Think bagger has his money in real estate?

 

[Gigantomachia]

My home town of Sheridan, Wyoming has been watching prices go up over the last 20 years with no end in sight. I was told one of the doctors my mom works with just should his house for $100,000 more than he paid for it just two years ago; and it sold in like two days.

Seems like white-flight has begun to reach all the way to the rockies.

 

[mojorizin]

St. Louis has slowed down considerably.  The pendulum has swung more towards the middle now, actually favoring buyers more.  Good thing, because I'm starting to get sick of the mom n' pop real estate places that are popping up everywhere in my area.

If you're looking to move to St. Louis, it's looking pretty favorable for you.  Lots of homes for sale, very saturated market, and lots of realtors looking for business.  My mom's trying to sell her house and she's had to whack $6k off the listing price because the damn thing just won't sell.  Too many tire-kickers.  Never seen it before in my life.

Construction still booming on NW side (IL) where I live. Folks in StL sick of overpaying for 1/2 the house they'd get over here for an extra 20 minute drive. Used to live on the fringes of civilization and now I'm the little guy in the middle of suburban sprawl.

Just wait till they build that bridge connecting I-70 across that little river you all have there.

What I would really hate to see is a new bridge connecting the bluffs and forests of Calhoun County with St. Charles MO. Wouldnt be 30 seconds before they started tearing down peace and quiet for every jackass that wanted to build a prefab mansion at half-price. Only thing that keeps those suburbanites away is having to ride the ferry system.

 

[tommyGunZ]

A few months old, but illustrates my point about the market being way out of whack:

To afford a median-priced house ($550,000) today in San Diego, buyers need an annual income of about $134,000, assuming a 10 percent down payment and a 30-year fixed-rate financing at current interest rates. But according to the San Diego Association of Governments the county’s median household income is $64,273 – less than half of what is needed to afford a median-priced home here. (The Daily Transcript/MarketPointe Realty Advisors, 2/15/06)

No housing market can sustain numbers where a family earning 64k has to pay 550k for a home. None. Zero.

 

[Red Apples]

according to zillow.com

ive lost $31,000 this week alone on my house here in venice beach

 

[Nugget]

A few months old, but illustrates my point about the market being way out of whack:

To afford a median-priced house ($550,000) today in San Diego, buyers need an annual income of about $134,000, assuming a 10 percent down payment and a 30-year fixed-rate financing at current interest rates. But according to the San Diego Association of Governments the county’s median household income is $64,273 – less than half of what is needed to afford a median-priced home here. (The Daily Transcript/MarketPointe Realty Advisors, 2/15/06)

No housing market can sustain numbers where a family earning 64k has to pay 550k for a home. None. Zero.

I agree that 64K won't buy a house for 550K. But what % of people under the median are homeowners? I'd bet 85% of the people below this # have been in their house for years, live w/ family, or rent. And if you can sell your home you bought 20 years ago for 400 grand, you'd have a sizeable down payment for your next.

 

[tommyGunZ]

A few months old, but illustrates my point about the market being way out of whack:

To afford a median-priced house ($550,000) today in San Diego, buyers need an annual income of about $134,000, assuming a 10 percent down payment and a 30-year fixed-rate financing at current interest rates. But according to the San Diego Association of Governments the county’s median household income is $64,273 – less than half of what is needed to afford a median-priced home here. (The Daily Transcript/MarketPointe Realty Advisors, 2/15/06)

No housing market can sustain numbers where a family earning 64k has to pay 550k for a home. None. Zero.

I agree that 64K won't buy a house for 550K. But what % of people under the median are homeowners? I'd bet 85% of the people below this # have been in their house for years, live w/ family, or rent. And if you can sell your home you bought 20 years ago for 400 grand, you'd have a sizeable down payment for your next.

What?

 

[Nugget]

What % of people in San Diego are homeowners?

 

[jonessed]

What % of people in San Diego are homeowners?

CA is 57% and both SD and LA lag behind that. In addition you just had a rush of baby boomers buying retirement homes in sunny coastal communities and they don't even have jobs. As age goes up home ownership goes up. Retirees are around 80%+ I believe and I imagine most of them aren't leaving sunny SD.Prices have to come down as interest rates go up, but waiting around expecting the median price for a home in SD to come down to the median household income without a major economic slowdown is wishful thinking. The current run up is ridiculous, but we are still talking about one of the nicest places to live in the country. It's obviously going to carry a premium now that it has good job opportunities to go along with the great real estate.

 

[(HULK)]

People who own Sirius Radio think that they're going to bounce back.

Its not?

 

[commisholio]

I respect bagger's opinion on this, but I generally try to take anyone's opinion on a market with a grain of salt when they're invested in it.

I really don't have much of an incentive to artificially inflate my opinion of the R/E market here...I don't think anyone here will be buying any land from our group.

I'm not saying you do, and I seriously respect your opinions on this. I just think that when you have skin in the game, you tend to unconciously believe the things that are most favorable to your position. People who own Alexander don't think Hutchinson was that important. People who own Sirius Radio think that they're going to bounce back. People who work in real estate tend to think the market's going to be fine. It's just how things work.

I don't know bagger but in my investing experience I completely agree with your view. The overwhelming majority of investors fail to hold a truly critical eye. They fall in love with their position. I notice that the ones that have such an eye tend to have the following traits:1. They are not afraid to doubt themselves. They are perfectly prepared to tell you they do not know what is going to happen.

2. They are perfectly willing to represent several different views. They are constantly reviewing their opinions.

People that show me these things tend to be the best investors.

I can say that bagger's post did NOT display to me these traits. He did not express any doubt in his view. He dismissed even credibile analysts that disagreed by saying "most analysts here understand that".

Based upon his post, I would believe his opinion is too biased.

When I'm discussing the gold market, I'll tell you what percentage of confidence I have. Even today, I see the gold market as unclear - it depends on a lot of factors that need to be resolved. I'm on the sidelines. I don't mind telling you that.

BGP is absolutely correct here. Once most people make a decision, no matter how tough it is, they will automatically start justifying that position in their own mind. It is a truly rare (or extremely experienced) person who can stay completely detached emotionally from their decisions, and I know for a fact that I'm not one of them. Shoot, just look in here for an example. Tommy's brain is obviously trying to justify that he's made the right decision in not buying, and he's absolutely, totally bought into that, and won't even consider that he's made a mistake. The San Diego real estate market is going to crash and burn, drop 50%, and the fact that the asking price for one condo dropped $100k is absolute proof of it.Then, let's look at bagger and I - both of who have an interest in the real estate market's continued success - because if we did let ourselves think the market would crash, it'd create a lot of cognitive dissonance, which people conciously or subconciously try to avoid.

If you think you can be truly impartial on an issue in which you have a financial stake, you're either lying to yourself or an extremely rare person.

Like I said, apocolypse coming soon - BGP is making sense.

 

[pigskinliquors]

Bryan/College Station Market =

Updated July 2, 2006 7:55 AM

Home sales boosting local economic growth

By LAURA HENSLEY

Eagle Staff Writer

Booming home sales have been a major contributor to the Bryan-College Station area's economic growth and stability in the past six years, says Karr Ingham, a Texas economist who analyzes the area's fiscal health.

The housing market is one of several factors Ingham considers when calculating the economic index for the area.

It's a good indication of the overall economic health of a city, he said.

"The thing that continues to strike me is the real estate market - the sale and pricing of existing homes," Ingham said. "That's a sector that year in and year out, no matter what else is going on, performs amazingly well."

With help from home sales, the local economic index compiled by Ingham improved again in May to a value of 116.8, up 6.3 points from the index in May 2005. The April index was 116.2.

During the six years Ingham has been tracking the local economy, the residential real estate market has grown tremendously. Through May, 992 homes had been sold locally, compared with 510 that had been sold by that time in 2000.

The 328 homes sold in May represented an increase of more than 36 percent over May of last year.

The average price for a house was $143,896, compared with $111,000 in 2000.

Mike Beal, owner of Century 21 Beal, said retirees drawn to the area and college students who decide to remain here after graduation have driven the demand for housing.

"A strong housing market is dependent on the job market," he said. "As the job market grows, things will continue to grow. It's very affordable to live here, and it's an easy, comfortable place to live."

Ingham said the housing market suggests residents are becoming more confident when it comes to their finances.

"It's phenomenal growth in a market that's been steady," Ingham said. "To me, it means people's economic circumstances are improving. People have the ability to trade up and buy homes that better suit their circumstances. They also have the confidence in their economic futures to take on the commitment of financing a home."

Other aspects of the local economy are favorable, Ingham said.



"The local economy is functioning at a higher aggregate level than ever before, and it continues to be higher with the passage of time," Ingham said.

Link

 

[pigskinliquors]

Hey, hey, this is the crashing thread. None of that. Besides, that's just the media's spin on it because they're biased.

In many ways I wish it were just media bias. Are little city keeps growing faster than I'd like. Last year we had the label as "cheapest place to live in America" (Money Magazine) and the "most underpriced housing market" = people are moving here fast and furiously. Are unemployment rate is less than 2%, yet we have more than 1,000 new jobs coming in the next quarter = even more people will be moving here. I've seen my commute to work increase from 10 minutes to 12 minutes, and it won't get any better. I like quiet. We are getting noisier.

 

[(HULK)]

I have a 3 year ARM @ 4.25%, with a max of 5 annual increases of 1%. It unlocks December of 2007. It was a zero down VA loan.

Guess what though? If I stay in my place my rate rises all the way up to 9.25%, I'll still have no problem paying it. I plan on selling this winter (it is appriased at 36% more than what I bought it for), and I really just wanted the lowest rate for a place that I'd live in for a handful of years.

So, I can assure you all that at least 1 of the zero down, 3 year ARMs out there will not be resulting in foreclosure. And I suspect that many more are situations similar to mine.

 

[tommyGunZ]

BGP is absolutely correct here. Once most people make a decision, no matter how tough it is, they will automatically start justifying that position in their own mind. It is a truly rare (or extremely experienced) person who can stay completely detached emotionally from their decisions, and I know for a fact that I'm not one of them. Shoot, just look in here for an example. Tommy's brain is obviously trying to justify that he's made the right decision in not buying, and he's absolutely, totally bought into that, and won't even consider that he's made a mistake. The San Diego real estate market is going to crash and burn, drop 50%, and the fact that the asking price for one condo dropped $100k is absolute proof of it.

Then, let's look at bagger and I - both of who have an interest in the real estate market's continued success - because if we did let ourselves think the market would crash, it'd create a lot of cognitive dissonance, which people conciously or subconciously try to avoid.

If you think you can be truly impartial on an issue in which you have a financial stake, you're either lying to yourself or an extremely rare person.

I've stated up front many times that I'm biased and am hoping for a correction for my own personal benefit. I've never claimed to be objective.On the other hand, my wife and I could easily qualify for a 400k condo today, and I would buy today if I felt the market was appreciating and my research resulted in the conclusion that buying is the better move fiscally.

 

[bigbottom]

On the other hand, my wife and I could easily qualify for a 400k condo today, and I would buy today if I felt the market was appreciating and my research resulted in the conclusion that buying is the better move fiscally.

This makes sense. I wouldn't buy my house in OC if it were on sale today.

 

[tommyGunZ]

I have a 3 year ARM @ 4.25%, with a max of 5 annual increases of 1%. It unlocks December of 2007. It was a zero down VA loan.

Guess what though? If I stay in my place my rate rises all the way up to 9.25%, I'll still have no problem paying it. I plan on selling this winter (it is appriased at 36% more than what I bought it for), and I really just wanted the lowest rate for a place that I'd live in for a handful of years.

So, I can assure you all that at least 1 of the zero down, 3 year ARMs out there will not be resulting in foreclosure. And I suspect that many more are situations similar to mine.

I bet there are a lot of people like you out there. In San Diego, there are also a ton of people who took the ARMs the past 2/3 years b/c they hoped appreciation would outpace interest rates, and it hasn't. If you don't believe me, check the foreclosure statistics I cited earlier. Foreclosures are up 200% this year. Coincedence?

 

[BowieMercs]

On the other hand, my wife and I could easily qualify for a 400k condo today, and I would buy today if I felt the market was appreciating and my research resulted in the conclusion that buying is the better move fiscally.

This makes sense. I wouldn't buy my house in OC if it were on sale today.

I couldnt buy my house in Fairfax county at todays prices... correction or not.

 

[bigbottom]

On the other hand, my wife and I could easily qualify for a 400k condo today, and I would buy today if I felt the market was appreciating and my research resulted in the conclusion that buying is the better move fiscally.

This makes sense. I wouldn't buy my house in OC if it were on sale today.

I couldnt buy my house in Fairfax county at todays prices... correction or not.

Well, that's true for me too. Good point.

 

[Caesar]

Bought my house last August at 200K, just had it appraised for 238K i would say the market here isn't too shabby.

 

[(HULK)]

I have a 3 year ARM @ 4.25%, with a max of 5 annual increases of 1%.  It unlocks December of 2007.  It was a zero down VA loan.

Guess what though?  If I stay in my place my rate rises all the way up to 9.25%, I'll still have no problem paying it.  I plan on selling this winter (it is appriased at 36% more than what I bought it for), and I really just wanted the lowest rate for a place that I'd live in for a handful of years.

So, I can assure you all that at least 1 of the zero down, 3 year ARMs out there will not be resulting in foreclosure.  And I suspect that many more are situations similar to mine.

I bet there are a lot of people like you out there. In San Diego, there are also a ton of people who took the ARMs the past 2/3 years b/c they hoped appreciation would outpace interest rates, and it hasn't. If you don't believe me, check the foreclosure statistics I cited earlier. Foreclosures are up 200% this year. Coincedence?

Earlier in this thread someone was railing against these types of loan products. Clearly there are people out there who use them and use them correctly, and I was providing myself as an example. Taking them away isn't the correct answer. Asking mortgage companies to evaluate potential customers is a better way to prevent mass foreclosures.FYI, I'm not ready to proclaim that the sky is falling. Of course, I'm on the otherside of the country, and know little about the SD market.

 

[tommyGunZ]

I have a 3 year ARM @ 4.25%, with a max of 5 annual increases of 1%. It unlocks December of 2007. It was a zero down VA loan.

Guess what though? If I stay in my place my rate rises all the way up to 9.25%, I'll still have no problem paying it. I plan on selling this winter (it is appriased at 36% more than what I bought it for), and I really just wanted the lowest rate for a place that I'd live in for a handful of years.

So, I can assure you all that at least 1 of the zero down, 3 year ARMs out there will not be resulting in foreclosure. And I suspect that many more are situations similar to mine.

I bet there are a lot of people like you out there. In San Diego, there are also a ton of people who took the ARMs the past 2/3 years b/c they hoped appreciation would outpace interest rates, and it hasn't. If you don't believe me, check the foreclosure statistics I cited earlier. Foreclosures are up 200% this year. Coincedence?

Earlier in this thread someone was railing against these types of loan products. Clearly there are people out there who use them and use them correctly, and I was providing myself as an example. Taking them away isn't the correct answer. Asking mortgage companies to evaluate potential customers is a better way to prevent mass foreclosures.FYI, I'm not ready to proclaim that the sky is falling. Of course, I'm on the otherside of the country, and know little about the SD market.

Tightening lending standards is the answer, not necessarily pulling the products. I think we're going to find out that there has been quite a bit of fraud going on in a couple of years when bankruptcy and foreclosures start to really hit the fan. Those no documentation loans scream fraud - I know of people in San Diego who were told to adjust their stated income so that they could qualify.It will be interesting to see what happens. Either we are going to see a giant correction, or the real estate market as a whole was SEVERELY underpriced in 2000.

I'm betting on the former, but who knows.

 

[stbugs]

I think a 29% drop from peak is just the beginning. Plus, I'd rather buy with a lower puchase price and higher interest rate, rather than the other way around. Interest rates can be refied in the future, not many banks willing to cut the principle.

Meh, I still would have to disagree on that, but just my opinion. I would rather have the lower monthly payment and ride out the housing bubble.You might think you could refi down the road, but did you realize that the rates we have seen around 6% are historical lows that haven't been around since the 60s? Good luck if you think rates are headed back down anytime soon.

Of course, if the prices drop and the rates remain steady, you would be better off waiting, but if you just looked at the 40 year rate chart I just looked at, it is pretty easy to see why prices were able to jump as much as they have. Imagine having a 10-14% interest rate on a mortgage, holy crap!

 

[TommyGilmore]

Bought my house last August at 200K, just had it appraised for 238K i would say the market here isn't too shabby.

Put it on the market for 238K and let us know if you get any offers.

 

[stbugs]

BTW, where in DC? I have friends in the Springfield area and I have suggested that they consider getting out now while they still can. IF they still can.

In Ashburn, near Dulles Airport.Don't know if Springfield is like where I was, but I would say the time has passed. We have neighbors that just listed their house at 60k less than we did. Granted it is a smaller house, but they also have 3 other houses as competition and we had only 1, which still happens to be unsold.

Unbelievably, another house just went up for sale for $170k less that what we listed our house at. Again, it is the smaller model (no office and about 400 sq ft less) and doesn't have a finished basement, but they are just dumping it.

To be honest Tommy, I remember seeing that NoVA was still recording a rise in the latest sales numbers, but I think a lot of that is just because houses are the market so long now there that the decreases haven't hit the books. Every house that we were looking at while we were selling lowered their price and new homes on the market are starting to get more realistic with the current market. When we first went on the market in March the average sale time in Ashburn was 20-30 days. When we sold our house just two months later, the time was up to 78 days. Just stagnate.

 

[(HULK)]

Sidebar: How accurate do you think Zillow is at this point?

 

[Red Apples]

Bought my house last August at 200K, just had it appraised for 238K    i would say the market here isn't too shabby.

Put it on the market for 238K and let us know if you get any offers.

house in LA, bought for 1.1appreciated to 1.45 a few months ago

now appreciated at 1.3

 

[stbugs]

Bought my house last August at 200K, just had it appraised for 238K    i would say the market here isn't too shabby.

Put it on the market for 238K and let us know if you get any offers.

Exactly. Who cares about appraisals. A few years ago, appraisals were on the low end, not keeping up with the real prices, but I would say now that appraisals are on the high end and not keeping up with real prices. Just a typical system where real things are happening faster than what gets recorded.