TripItUp
Footballguy
Disagree. We can all agree that people are idiots. You can't empower the masses to make financial decisions that may adversely impact the rest of us.
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How's your housing market? (1 Viewer)
- Thread starter tommyGunZ
- Start date
RedmondLonghorn
Footballguy
That is actually a problem somewhat inherent in the banking system, rather than something that derived from ARMs or non-amortizing loans.
The specific issues that most contributed to the whole thing blowing up were lending to borrowers who shouldn't have qualified in the first place (subprime and Alt-A) and the low-doc and no-doc loans (liar loans). The financial engineering that created synthetic CDOs was also a contributor.
TripItUp
Footballguy
Mostly agree. My argument is that those products should never have been made available.
RedmondLonghorn
Footballguy
If you mean subprime and liar loans, then I agree.
If you mean ARMs or non-amortizing loans, then I disagree.
mr roboto
Footballguy
TripItUp
Footballguy
Agreed. Although ARMs still are not ideal for unsophisticated borrowers that have good credit.
Chadstroma
Footballguy
There is a place for subprime and Alt-A loans. I would also argue there is a place for low/no-doc loans. Just as much as with ARMs and Options ARMs. The actual problem with all of these were the underwriting on them continued to get looser and looser systematically and it made them all suspect. There are a number of factors that brought that about.
Risk retention rules that came about through Dodd-Frank should help with the disconnect of risk that motivated so many originators like Countrywide for example to loosen their standards for lending to almost nothing. One big part of the problem was you could lend to whomever you wanted and then just package the loan and sell it off to some investor transferring all the risk to them. If you are forced to keep a piece of the loan you originate and actually have some skin in the game, then you will have a little more concern about the credit quality of the borrower instead of just meeting this month's sales goals.
Of course the unknown unintended consequence is how much this will impact available liquidity to make loans in the future. It also really hurts smaller players and institutions that don't have large amounts of capital to tie up.
Of course the unknown unintended consequence is how much this will impact available liquidity to make loans in the future. It also really hurts smaller players and institutions that don't have large amounts of capital to tie up.
Statcruncher
Footballguy
Bought a house in North Dallas area in 2004 and put it on the market this spring at 132% of what we paid for it. Had multiple offers in days and it sold within a week for 137% of what we paid. We didn't do any major upgrades while there. The realtor said we could have easily gotten another 6% if we were willing to wait longer and play buyers against buyers.
RedmondLonghorn
Footballguy
Of course. The whole financial crisis had so many causes...it was a very complex disaster. No single thing caused it.
And bad underwriting is one of the main underlying themes (as is indiscriminate yield-seeking on the part of investors, due to the compression in yields across a variety of assets).
I was simply pointing out, that if you are going to focus on the products that were most instrumental in really sending things in a downward spiral, subprime/Alt-A, low/no-doc loans and synthetic CDOs were the main culprits.
Chadstroma
Footballguy
flapgreen
Footballguy
urbanhack
Fight The Power!
Chicago market is hot right now. Three years ago I was looking to be happy to break even if I sold my place. A lot has changed. From the time I contacted a realtor, I closed on my place in less than a month. My condo was only on the market for 3 days and had 8 offers. Best offer was $50,000 high than the list price and he paid in cash.
Boom!
Boom!
Chadstroma
Footballguy
I just checked Zillow. It has me up about 18% since we bought. Likely even higher since Zillow was significantly lower on it's valuation than actual valuation at time of purchase. What is nice (and I have no idea how accurate Zillow is with this) is the rent it gave me. If I rented out my place, I would be able to pay PITI and still have $1K a month in income. Since I got a 30 year fixed at 3.25% my plan has been to not sell this place but to rent it out when we are ready to move. That rate coupled with expected valuation and the inflationary impact making the loan even further devalued in the future- it is going to be a great income source in the future. I would love to say I timed it but I am not that smart.... stumbled into buying at pretty much the bottom of both the real estate market and interest rates. Going to leverage it as much as possible for the rest of my life.
SameSongNDance
Footballguy
You can check the accuracy of estimates from your area on Zillow. I believe they rate area accuracy on a 5 star scale, with the margin for error increasing rather significantly when you drop below 4 stars.
tommyGunZ
Footballguy
According to Zillow, I'm up 71% from my purchase price exactly 3 years ago. According to my math, it's more like 50% based on recent comps.
We are happy where we are, but I'm still monitoring the local market looking for a steal on a fixer to turn into our forever home. At age 42, I feel like I need to find it in the next 3-5 years.
We are happy where we are, but I'm still monitoring the local market looking for a steal on a fixer to turn into our forever home. At age 42, I feel like I need to find it in the next 3-5 years.
sbonomo
Footballguy
TripItUp
Footballguy
California real estate is overpriced as evidenced of the median household income/mortgage payment ratios. Some estimates have the bay area market 30% overvalued.
If I owned in a CA market and I was up and I saw overvalued warning signs, I'd seriously consider selling and renting.(if money was the only factor)
If I owned in a CA market and I was up and I saw overvalued warning signs, I'd seriously consider selling and renting.(if money was the only factor)
Captain Cranks
Footballguy
I just listed my house in the Tampa bay area about 3 weeks ago. I'm in the higher end bracket and it feels like things are 'toppy'. None of the competition is selling either.
However, my friend is trying to buy a lower priced home in the area and tells me it's crazy competitive.
However, my friend is trying to buy a lower priced home in the area and tells me it's crazy competitive.
tommyGunZ
Footballguy
You also have to look at supply/demand. Here in San Diego, we have ~ 2 months of inventory on the market. Traditionally 6 months inventory is the sweet spot.
bentley
Footballguy
Keep hearing about Austin being overvalued, too. But people keep moving here in droves and supply is short in the city, so I don't see the problem. We bought about 18 months ago and overpaid at the time but the average CPF has blown past ours since.
James Daulton
Footballguy
I will be waiting for TGunz to call the top and subsequent crash. He was spot on last time.
Zegras11
Footballguy
After the election. And only in areas that have seen significant increases in prices. It will be more regional
tommyGunZ
Footballguy
Thanks for the kind words JD. I'd be surprised if we ever see another crash in our lifetimes like that in the real estate area. It was a perfect storm.
FUBAR
Footballguy
Our neighborhood and most of the school district sells quick. Only a few houses have been on the market in our 50 house neighborhood, none lasted more than a week. Last house had 4 full asking price bids the day it went on the market.
(Madison AL / Huntsville, slightly above 300k)
(Madison AL / Huntsville, slightly above 300k)
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Tackling Dummies
Footballguy
Raleigh area is crazy hot, houses selling in a day and before listing at times. Getting a call from a realtor or "are you ready to sell" note in the mail is common and new housing as well as trade up house inventory is hard to find.
The area is growing at a clip that is chewing up land at a rate that is bananas. Population is projected to double, stay out of Raleigh, move to Mecklenberg or go to the beach.
Our house (according to Zillow) is up about 70K in less than 18 months.
The area is growing at a clip that is chewing up land at a rate that is bananas. Population is projected to double, stay out of Raleigh, move to Mecklenberg or go to the beach.
Our house (according to Zillow) is up about 70K in less than 18 months.
The General
Footballguy
Seattle is blowing up again. Up something like 15% - 20% from last year. Multiple offers no contingencies on lots of properties with pretty mediocre looking houses going for well over asking price.
Tanner9919
Footballguy
Nj seems pretty hot.In my town of Ringwood (NE NJ)homes are selling in 2-3 days.some even sell before they RE agent has a chance to publish the listing.
Zillow est on my home went from $349k last year to $399k this year.It'll be on the market in one week. $900k homes in my area now sell for $550/600k..mostly because taxes are $22k/yr. and rising every year.
My taxes are $12500/yr..1ac 4br 3ba IG pool.cul de sac..
Taxes are going to go way up in NJ..time to leave..
Looking at Wellington Fl area, and Royal Palm Beach, Delray Beach, etc..
The SE FL market seems hot right now any one have thoughs to share on the SE Fl market?
Thx.
Zillow est on my home went from $349k last year to $399k this year.It'll be on the market in one week. $900k homes in my area now sell for $550/600k..mostly because taxes are $22k/yr. and rising every year.
My taxes are $12500/yr..1ac 4br 3ba IG pool.cul de sac..
Taxes are going to go way up in NJ..time to leave..
Looking at Wellington Fl area, and Royal Palm Beach, Delray Beach, etc..
The SE FL market seems hot right now any one have thoughs to share on the SE Fl market?
Thx.
Senor Schmutzig
Footballguy
Miami is all about location. There is a glut of condo's on the market as well as what's being built currently in the downtown/Brickell area. In my town (Coconut Grove, on the water, about 10 minutes from downtown), the highest demand is in the sub-$1M market as there just isn't much available there. This segment accounts for about 14% of the market (yes, it's really expensive here). In the $1M+ range, the market is slow as there just hasn't been a lot moving here. One reason for the slowdown is the lack of international money flowing in. Not too long ago there was a bunch of cash buyers from South America but that has really dried up. Values are holding steady though due to the location.
We have been renting for the past 5 years but had the opportunity to purchase the lot directly across the street from where we live and will be building there sometime in the next 6-8 months. With what has been sold in the most recent past, I should make back everything I have spent in rent over the past 5 years plus a healthy bit more. We got lucky. Real lucky.
We have been renting for the past 5 years but had the opportunity to purchase the lot directly across the street from where we live and will be building there sometime in the next 6-8 months. With what has been sold in the most recent past, I should make back everything I have spent in rent over the past 5 years plus a healthy bit more. We got lucky. Real lucky.
St. Louis Bob
Footballguy
Incredible here. Parents and cousin both sold their houses for the asking price first day on the market.
Senor Schmutzig
Footballguy
Zegras11
Footballguy
Probably not. Priced right and hot markets will get multiple offers. Start at the top and you might not get an offer.
fruity pebbles
Footballguy
Hot around Portland, Maine as well. Sold our house 5% over asking with three offers in 4 days. Bought a larger house and had to increase our budget three times to get what we wanted. Nice houses in nice neighborhoods fairly priced are selling immediately.
St. Louis Bob
Footballguy
My cousin, probably. Parents definitely not. After he sold his house right away Dad asked for 15k more than the agent suggested which was a total of 35k more than the Zillow estimate. I heard STL is one of the hottest markets though, too.
Zegras11
Footballguy
It's pretty hot everywhere right now. We are down to 4-5 weeks of inventory in some areas.
I'm seeing agents price them low on purpose to create Ebay type bidding wars.
If you're not in a hurry, why not start high and then reduce the price periodically? That's what flippers in my old neighborhood near Miami Beach have done in a few recent sales.
Zegras11
Footballguy
This can work, but it's not as effective. Price too high and you limit initial amount of pool of potential buyers.The vast majority of people interested in a home will look at it only in first 21 days.
And then after that chase that down until you get it sold. Stats show this strategy nets less money, especially when a house goes over average days on market stats and the perception changes to something is wrong with it.
All the flippers here in Boise area price them lower for quick sales.
Zegras11
Footballguy
Not sure I'd call it a bubble. I do see the markets going up 15-20% a year correcting back to the 4-6% growth line. Historically that happens about every 6-8 years.
We don't have the loan issues that we had that really exploded the bubble.
Idaho has a 0.5% down, 3.25% program I'm getting many buyers into, but they have to have two years of employment with no gaps and a 620+ score. Payments for these wind up $200-300 under rent and I have a FB ad for this that is killing it.
Quez
Footballguy
What part of town are you in? South Tampa is really hot. 300k+ for 1 bathroom houses isn't uncommon. Most buyers are looking around $200k, so those houses are in really high demand, as the supply just isn't there. I do feel like the market is peaking. A friend of mine in real estate said he has stopped buying houses for his investors.
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Captain Cranks
Footballguy
Yeah. South Tampa didn't suffer the declines that the 'burbs did and demand continues to surge...especially for the lower priced homes. Location, location, location.
I'm in a neighborhood in Lutz where prices are between $600K and $1.5M. I'm up nearly 50% on my home since 2010, but like I said, buyers are starting to reclaim power at the higher end of the spectrum and you're seeing many in my 'hood slashing prices. It's time to cash in the chips.
The Ref
Footballguy
You will feel at home down here. Nothing but New York/Jersey and Mass transplants in this area. I'm in an area called "suburban boynton beach", basicaly the area between Delray and Wellington. We have a bunch of walled in communities down here and new 3/2 construction is going in the low to mid 3's.
The Z Machine
Footballguy
Still not hot in Baltimore. Prices might be lower now than in 2014.
I get jealous when I see these increases, since my home won't likely appreciate anywhere near as much. If / when I decide to leave Baltimore, my equity won't be worth much if real estate appreciates like this elsewhere.
I have heard about Chinese investors parking their money in US real estate as a way to get their Yuan into a more long term stable asset. I can see that driving up prices in certain places like major cities, but not in spots like Raleigh or St. Louis.
Zegras11
Footballguy
I read a report on Chinese investing about four weeks ago. About 20% of their purchases are in rural areas and small towns you would not think possible. 58% was in cookie cutter sub divisions.
FUBAR
Footballguy
how accurate is Zillow? Our house was listed on Zillow at $15k more than the appraisal. FWIW we (and everyone we've discussed it with) believe the appraisal was way low, as the VA just wants to protect their investment so it's better for them to come in low.
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jonessed
Footballguy
Chinese investors have been parking their money in hotspots like London, New York, San Francisco, Sidney, Vancouver, etc. for several years. Australia and Canada have buckled down on this, but our real estate laws are much more lax. It's an easy way to launder money (for anyone really, not just Chinese). Set up a foreign LLC and buy whatever you want. There are no background checks or verification of where the funds are coming from like there are for American citizens.
