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How's your housing market? (2 Viewers)

My mother just put a bid at about 10% under the asking price for a house that's been on the market for a month or more. They've been sitting on it for a week and a half.

This is in LA (Burbank).

 
proninja said:
Picked up a couple books I've been wanting to read at half price books last night. While I was there, I saw a book called "the coming real estate crash" that was put out in 2003 - the year I bought my first home.

Glad I didn't read the book back then. Would have cost me a lot of scratch if I'd listened to it.
Wish I would have bought in '03 - but I'm guessing I wouldn't be smart enough to sell now if I was up big, so it would have ended up a wash by '08 anyway.interesting chart: Graph of US home values adjusted for inflation from 1890 to present

 
My mother just put a bid at about 10% under the asking price for a house that's been on the market for a month or more. They've been sitting on it for a week and a half.This is in LA (Burbank).
It is a buyers market. The problem is that sellers still think it is the same market as it was a couple of years ago and holding out to get more than what they really can. The smart seller would discount right off the back to attract the bids and sell the house quickly. Keeping it on the market right now sitting hoping you get your asking price is not going to work. There should be enough equity in the property (assuming no recent re-fi, equity spending spree, or recent purchase of the property) to cut a bit off and put the house on the market closer to that 10% discount and get more and better offers.
 
NYC is booming after bonus season. From the NY Times

February 19, 2007Housing Market Heats Up Again in New York City By TRACIE ROZHONSince the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall. Real estate brokers and statisticians are quick to point out that not every single apartment is flying into contract. During the last quarter of 2006, the major real estate agencies differed on which way prices were headed. But now, the three largest real estate companies in the city agree: for January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, buyers’ attitudes have done an about-face. “Their psychology has changed,” said Frederick W. Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.” Real estate experts say they see no reason for the trend to not continue, with economists predicting stable mortgage rates and a continuing city budget surplus. However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.Yet, there is “cautious exuberance,” according to Steven L. James, director of Manhattan sales for Prudential Douglas Elliman.A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast. Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”According to a report released last week by the National Association of Realtors, prices are falling in many other metropolitan areas around the country. The report covered only the last quarter of 2006, and showed a modest increase of 3.1 percent for the New York area, which includes parts of northern New Jersey. Anecdotally, there isn’t much talk of falling prices in Manhattan and in the most sought-after neighborhoods in Brooklyn, where young people looking for a break, empty nesters looking for a guest room and foreigners looking for a pied-à-terre say they want to live. Katalin Shavely, a 30-year-old bedding designer in Manhattan, devotes her weekends to scanning the classifieds and attending open houses, searching for just the right one-bedroom apartment for less than $750,000. She can’t find it. “I made a mistake,” she said last week. “I should have started looking before Thanksgiving.” Mr. Miller said New Yorkers had been reluctant to buy because of the feeling of an impending crash. “Last summer, a lot of information was being dumped on the consumer: stories about the glut of condos in Miami, Washington, D.C., and Las Vegas, exacerbated by the constant debate on the blogosphere about housing bubbles, mixed together with a barrage of negative predictions,” he said in a telephone interview.Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day. He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million. Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.” Within the last month, the Corcoran Group, Halstead and Prudential Douglas Elliman, three of New York City’s largest real estate sales firms, say they have recorded double-digit increases in contract prices and in the number of transactions.In a real estate market where 18 and 22 percent price increases were recorded in 2004 and 2005, last year’s 6 percent increase was depressing, Mr. Miller said. Pamela Liebman, the president of the Corcoran Group, reported that the company’s contracts for this January totaled $1.3 billion, an increase of 53 percent from January 2006. Prices in many areas of Brooklyn are going up, too. According to Marc Garstein, the president of Warren Lewis Realty in Park Slope, prices in what he called the downtown neighborhoods — including Brooklyn Heights, Park Slope, Carroll Gardens, Cobble Hill, Prospect Heights and Windsor Terrace — are now approaching 2004 highs, after being off about 10 percent in the last two years. A town house at 171 Garfield Place in Park Slope, priced at $2,475,000, sold for the asking price one day after it was put on the market. Fifty people had shown up at the open house, Mr. Garstein said. Customers said they had expected a buyer’s market in which they could call the shots, but found a race track, instead.Jane LaFarge Hamill, a 25-year-old painter who lives in a “small, kind of stinky” studio in Chinatown, said she had looked at 60 apartments over three months, trying to take advantage of the lull she had noticed. “We decided to look while sellers were still worried that the market was crashing,” she said. When she started looking last fall, there was still “wiggle room,” she said. But now, there is frenzy, said her mother, Leita Hamill, who, with her husband, Bill, is helping her daughter search for and buy a new home. The Hamills had gotten into a bidding war, one of many reported by brokers these days, for a two-bedroom co-op in Gramercy Park. They had started bidding above the asking price, but it wasn’t enough. “There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.Real estate executives say they do not know how long the market’s heat will be turned up, although they say the regional economy looks strong. They also say that the first two quarters of the year — the spring market — are traditionally stronger than the last two. Thus, the average for the whole of 2007 may or may not show the double-digit growth that the first part of the year is showing. “It’s all about price now,” Ms. Ramirez said. “The market is not in a spike mode, when anything, for any price, will sell.”Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ” she said. “With the number of deals we had last week, it has to calm down. But I feel much more confident than at any time in the last five years when the market had fits and starts and there was always a certain underlying nervousness.” Toward the end of 2004, the real estate market in the city was booming. But then, brokers started seeing “great concern among clients that mortgage rates were about to jump and that house prices would suffer a sharp correction,” Mr. Miller said. Since then, there has been change of leadership in Congress, Mr. Miller noted. In the region, unemployment has dropped. Mortgage rates didn’t soar. “Two years ago, we were predicting they’d be up to 8 percent now,” he said. (Rates for a 30-year fixed loan on a New York City co-op hover around 6.25 percent, according to the Manhattan Mortgage Company.)After months of trying to push shoppers over the edge of indecision, brokers now say they spend time warning house hunters not to rush in heedlessly — advice the would-be buyers don’t always listen to. “When my wife and I got into the market in mid-December, people told me there was a glut of one-bedroom apartments and I could take my time,” said Shelly Cohen, 51, an empty-nester. “When we actually got into the market, I found it was just the opposite.” He just found a newly created condominium in a beige brick high-rise at 1438 Third Avenue at 81st Street and quickly signed the contract. He said he felt he had to.Mrs. Hamill, the mother of the young artist in Chinatown, offers her own advice to friends. “Now I tell everybody: Be ready to write the check the minute you see something you love,” she said. “If it’s any good, it’ll be gone by the next day.” She paused. “Or, even by that same day.”
 
Round Rock and Northwest Austin is still climbing at a ridiculous rate. The city is wisely investing in infrastructure to support the fact that Round Rock is the fastest growing city in Texas. Similarly, new jobs are coming to town and shopping/amenities are popping up like mushrooms.

The market here is on fire. I imagine my house has appreciated about 40-50% in the 3.5 years I've lived in it, and I imagine that growth will continue for the foreseeable future.

 
proninja said:
Picked up a couple books I've been wanting to read at half price books last night. While I was there, I saw a book called "the coming real estate crash" that was put out in 2003 - the year I bought my first home.

Glad I didn't read the book back then. Would have cost me a lot of scratch if I'd listened to it.
Wish I would have bought in '03 - but I'm guessing I wouldn't be smart enough to sell now if I was up big, so it would have ended up a wash by '08 anyway.interesting chart: Graph of US home values adjusted for inflation from 1890 to present
:wall: Bought mine pretty much up there at the top. :confused:
 
proninja said:
Picked up a couple books I've been wanting to read at half price books last night. While I was there, I saw a book called "the coming real estate crash" that was put out in 2003 - the year I bought my first home.

Glad I didn't read the book back then. Would have cost me a lot of scratch if I'd listened to it.
Wish I would have bought in '03 - but I'm guessing I wouldn't be smart enough to sell now if I was up big, so it would have ended up a wash by '08 anyway.interesting chart: Graph of US home values adjusted for inflation from 1890 to present
Interesting that values have only doubled in 120 years. I bet the average income is up quite a bit more than 100% (adjusted for inflation)
 
urbanhack said:
They are building too many ### #### condos in Chicago. :bag:
Bought Chicago condo at $225K end of Nov. but valued at $250K. Just got another appraisal in (today) which came in at $250K. Two seperate appraisals a few months apart. I am feeling good about the purchase.I think there will be a fairly decent upswing in activity- including the condo market, here in Chicago in about a month or so as the season kicks in. I also think that condo development and conversions will decline as the 'easy' money disappears.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:thumbup:
 
Last edited by a moderator:
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:thumbdown:
You don't.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:yawn:
You don't.
Obviously not. I should be going neg-am for half a mill right now, regardless of the fact that whatever I buy will be worth 30% less in 2 years.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:rolleyes:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
 
They are building too many ### #### condos in Chicago. :useless:
Bought Chicago condo at $225K end of Nov. but valued at $250K. Just got another appraisal in (today) which came in at $250K. Two seperate appraisals a few months apart. I am feeling good about the purchase.I think there will be a fairly decent upswing in activity- including the condo market, here in Chicago in about a month or so as the season kicks in. I also think that condo development and conversions will decline as the 'easy' money disappears.
I don't know if I would like Chicago all the time or not, but you tell people that work hard in Los Angeles that they can move to a still rather alrge city like Chicago and buy a condo for $250k...you can't touch a condo out here in Los Angeles for much under $500k...Winters would kill me if the humidity in the summer didn't.I bet you can make a good living in Chicago though.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:useless:
TG, if those stats are true, there will be a meltdown of gigantic proportions in places like San Diego. Sacramento and San Diego have been hit the hardest during the past 12 months.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:cry:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
 
They are building too many ### #### condos in Chicago. :cry:
Bought Chicago condo at $225K end of Nov. but valued at $250K. Just got another appraisal in (today) which came in at $250K. Two seperate appraisals a few months apart. I am feeling good about the purchase.I think there will be a fairly decent upswing in activity- including the condo market, here in Chicago in about a month or so as the season kicks in. I also think that condo development and conversions will decline as the 'easy' money disappears.
I don't know if I would like Chicago all the time or not, but you tell people that work hard in Los Angeles that they can move to a still rather alrge city like Chicago and buy a condo for $250k...you can't touch a condo out here in Los Angeles for much under $500k...Winters would kill me if the humidity in the summer didn't.I bet you can make a good living in Chicago though.
I am from L.A. not too far from Santa Monica (the Valley). What I bought for $250K here would be hard to find for $600-700K in L.A.. I would make more in L.A. but more of my income would go straight to housing. The humidity in the summer really is not that bad... it is not like Florida. But the winters suck big time. Snow is bearable but when it gets -15 it is just miserable. Chicago is a great city and not a bad place to live but I will not be 'settling' here. The housing market has been healthy and I believe will be healthy moving forward here. The condo market is a bit over inflated right now with tons of new development but Chicago did not have the over heated housing explosion that L.A. and other parts of the country has had. In my opinion, that will help it weather the current 'market correction' better.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:thumbup:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:eek:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
80-95% of the people who are getting them make minimum payments. Figure 10 years ago less than 1% of loans were Pay Options/NegAm...now almost 1 in 3 in the state are...do the math, why are these people getting the loans? It's not to make 8.5% Intereast Only payments I promise you.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:banned:
You don't.
Obviously not. I should be going neg-am for half a mill right now, regardless of the fact that whatever I buy will be worth 30% less in 2 years.
Like I said before, waiting hasn't worked in your favor so far. However, some people are stupid enough to get a mortgage with the lowest payment, or buy a home way over their financial capabilities.I'm not advocating that, but a "bubble" has nothing to do with the fact that some people are ####ing stupid, and bought these con-artist mortagage offerings.

 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:banned:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
80-95% of the people who are getting them make minimum payments. Figure 10 years ago less than 1% of loans were Pay Options/NegAm...now almost 1 in 3 in the state are...do the math, why are these people getting the loans? It's not to make 8.5% Intereast Only payments I promise you.
10 years ago, there weren't so many crooked mortgage brokers lying to people across the country about what's a wise decision when it came to homebuying.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:lmao:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
80-95% of the people who are getting them make minimum payments. Figure 10 years ago less than 1% of loans were Pay Options/NegAm...now almost 1 in 3 in the state are...do the math, why are these people getting the loans? It's not to make 8.5% Intereast Only payments I promise you.
10 years ago, there weren't so many crooked mortgage brokers lying to people across the country about what's a wise decision when it came to homebuying.
I tend to agree MTS.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:confused:
You don't.
Obviously not. I should be going neg-am for half a mill right now, regardless of the fact that whatever I buy will be worth 30% less in 2 years.
Like I said before, waiting hasn't worked in your favor so far. However, some people are stupid enough to get a mortgage with the lowest payment, or buy a home way over their financial capabilities.I'm not advocating that, but a "bubble" has nothing to do with the fact that some people are ####ing stupid, and bought these con-artist mortagage offerings.
It has everything to do with a "bubble". Investors and idiots taking out neg-am loans are two reasons housing prices are far, far above any rational value level in SoCal. As investors have pretty much left this "musical chairs" game in San Diego, only idiots taking out IO and neg-am loans are keeping the sinking boat afloat. Once they are shaken out of the game as their mortgages reset (happening now) and subprime lending dries up (happening now), prices will decline more dramatically.There is absolutely no way a county where the median family income is 62k can support median home prices at 500k for long without voodoo financing.

 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:rolleyes:
You don't.
Obviously not. I should be going neg-am for half a mill right now, regardless of the fact that whatever I buy will be worth 30% less in 2 years.
Like I said before, waiting hasn't worked in your favor so far. However, some people are stupid enough to get a mortgage with the lowest payment, or buy a home way over their financial capabilities.I'm not advocating that, but a "bubble" has nothing to do with the fact that some people are ####ing stupid, and bought these con-artist mortagage offerings.
It has everything to do with a "bubble". Investors and idiots taking out neg-am loans are two reasons housing prices are far, far above any rational value level in SoCal. As investors have pretty much left this "musical chairs" game in San Diego, only idiots taking out IO and neg-am loans are keeping the sinking boat afloat. Once they are shaken out of the game as their mortgages reset (happening now) and subprime lending dries up (happening now), prices will decline more dramatically.There is absolutely no way a county where the median family income is 62k can support median home prices at 500k for long without voodoo financing.
Again, you're taking a fact (point 2 regarding the family with 62k) and pretending it implies a bubble. The fact that rates are CLIMBING while values are FALLING indicates it's merely correcting itself slightly. The fact that your spending power today is exactly what it was 18 months ago proves it's no bubble.
 
Again, you're taking a fact (point 2 regarding the family with 62k) and pretending it implies a bubble. The fact that rates are CLIMBING while values are FALLING indicates it's merely correcting itself slightly. The fact that your spending power today is exactly what it was 18 months ago proves it's no bubble a correction is underway.
Fixed. None of us know the extent of the correction yet, it could be mild, it could be brutal (bubblish). TGZ (and myself) are thinking it's going to get worse and the current evidence hasn't done anything to make us think we're wrong at this time.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:bye:
You don't.
Obviously not. I should be going neg-am for half a mill right now, regardless of the fact that whatever I buy will be worth 30% less in 2 years.
Like I said before, waiting hasn't worked in your favor so far. However, some people are stupid enough to get a mortgage with the lowest payment, or buy a home way over their financial capabilities.I'm not advocating that, but a "bubble" has nothing to do with the fact that some people are ####ing stupid, and bought these con-artist mortagage offerings.
It has everything to do with a "bubble". Investors and idiots taking out neg-am loans are two reasons housing prices are far, far above any rational value level in SoCal. As investors have pretty much left this "musical chairs" game in San Diego, only idiots taking out IO and neg-am loans are keeping the sinking boat afloat. Once they are shaken out of the game as their mortgages reset (happening now) and subprime lending dries up (happening now), prices will decline more dramatically.There is absolutely no way a county where the median family income is 62k can support median home prices at 500k for long without voodoo financing.
Again, you're taking a fact (point 2 regarding the family with 62k) and pretending it implies a bubble. The fact that rates are CLIMBING while values are FALLING indicates it's merely correcting itself slightly. The fact that your spending power today is exactly what it was 18 months ago proves it's no bubble.
not if the biggest decline is yet to come - especially when the market believes rates will fall before they climb in the future (yeild curves).
 
not if the biggest decline is yet to come - especially when the market believes rates will fall before they climb in the future (yeild curves).
please don't waste my time pretending to predict the future.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:confused:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
80-95% of the people who are getting them make minimum payments. Figure 10 years ago less than 1% of loans were Pay Options/NegAm...now almost 1 in 3 in the state are...do the math, why are these people getting the loans? It's not to make 8.5% Intereast Only payments I promise you.
8.5% is a sub-prime rate on an Option ARM. It would only make sense that someone who has sub-prime credit and hence getting a loan in that sector who has historically shown bad credit decisions would make the min payment on that Option ARM.
 
not if the biggest decline is yet to come - especially when the market believes rates will fall before they climb in the future (yeild curves).
please don't waste my time pretending to predict the future.
isn't that what we all do everyday, practically all day?do you make 300-500k decisions without an eye on what you think the future holds?
I really am done with you. I've already shown you that your financial decision that you claim "saved you $50,000" really didn't save you anything, in fact, cost you money. Now you're saying you're going to wait for a 30% correction, while rates fall. You've been wrong for a long time here.Good luck to you.
 
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:shrug:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
80-95% of the people who are getting them make minimum payments. Figure 10 years ago less than 1% of loans were Pay Options/NegAm...now almost 1 in 3 in the state are...do the math, why are these people getting the loans? It's not to make 8.5% Intereast Only payments I promise you.
8.5% is a sub-prime rate on an Option ARM. It would only make sense that someone who has sub-prime credit and hence getting a loan in that sector who has historically shown bad credit decisions would make the min payment on that Option ARM.
I don't want to come across as an ###...this might be hard...You're off with the sub-prime comment. People with 700-825 Fico scores are getting Pay Option Arms without jobs, without income verification, without much money in the bank...they are getting 1-3% start rates and then they take an ARM for the I/O and Fully Amortized payments...the index is about 4.75-5%...then you add the 3-3.5% margin so the brokers can get 3-4 rebate points on the backend so the brokers can tell the "A" customer they aren't charging them much at all to do the loan...Where is ProNinja?

There are Pay Options with a fixed rate instead of the arm but for the brokers to receive a rebate you are still looking at a rate in the 7-7.5% range...not a bargain when 5 yr fixed rate Arms are going for 5.5-6.0% IMO

 
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Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:D
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
80-95% of the people who are getting them make minimum payments. Figure 10 years ago less than 1% of loans were Pay Options/NegAm...now almost 1 in 3 in the state are...do the math, why are these people getting the loans? It's not to make 8.5% Intereast Only payments I promise you.
8.5% is a sub-prime rate on an Option ARM. It would only make sense that someone who has sub-prime credit and hence getting a loan in that sector who has historically shown bad credit decisions would make the min payment on that Option ARM.
I don't want to come across as an ###...this might be hard...You're off with the sub-prime comment. People with 700-825 Fico scores are getting Pay Option Arms without jobs, without income verification, without much money in the bank...they are getting 1-3% start rates and then they take an ARM for the I/O and Fully Amortized payments...the index is about 4.75-5%...then you add the 3-3.5% margin so the brokers can get 3-4 rebate points on the backend so the brokers can tell the "A" customer they aren't charging them much at all to do the loan...Where is ProNinja?

There are Pay Options with a fixed rate instead of the arm but for the brokers to receive a rebate you are still looking at a rate in the 7-7.5% range...not a bargain when 5 yr fixed rate Arms are going for 5.5-6.0% IMO
:shrug: and hence my hatred for mortgage brokers as scum of the earth (with the exception of our buddy ProNinja).

Goodness, I hope you are wrong but when dealing with a mortgage broker- I can see it.

 
not if the biggest decline is yet to come - especially when the market believes rates will fall before they climb in the future (yeild curves).
please don't waste my time pretending to predict the future.
isn't that what we all do everyday, practically all day?do you make 300-500k decisions without an eye on what you think the future holds?
I really am done with you. I've already shown you that your financial decision that you claim "saved you $50,000" really didn't save you anything, in fact, cost you money. Now you're saying you're going to wait for a 30% correction, while rates fall. You've been wrong for a long time here.Good luck to you.
No, you've shown that currently my monthly payment would be the same. Not at all the same as "no savings".Additionally, it's become much clearer over the past 18 months that RE in my market is vastly overpriced and all of the signs are pointing to a much larger decline, which only reenforces my position that waiting is profitable at this point if you can.Maybe you're right, and I'll regret not buying closer to the Nov. 2005 peak. I don't profess to know the future, I can only make guesses based on my research. :goodposting:
 
I live in Central Cali... and waiting patiently the last 18 months has been nothing but splendid. My wife thanks me everytime we look at the new houses and the prices, and she is itching to get a new home. Had I bought a house in the past two years, Id be a bit miffed right now. As it is, we also feel we have profited from the waiting game.

Good luck in your search TGunz.

 
I live in Central Cali... and waiting patiently the last 18 months has been nothing but splendid. My wife thanks me everytime we look at the new houses and the prices, and she is itching to get a new home. Had I bought a house in the past two years, Id be a bit miffed right now. As it is, we also feel we have profited from the waiting game.

Good luck in your search TGunz.
Sacramento and San Diego are buyers markets right now.
 
I live in Central Cali... and waiting patiently the last 18 months has been nothing but splendid. My wife thanks me everytime we look at the new houses and the prices, and she is itching to get a new home. Had I bought a house in the past two years, Id be a bit miffed right now. As it is, we also feel we have profited from the waiting game.

Good luck in your search TGunz.
keep holding out BST. everything I read says we haven't seen anything yet - the subprime lending market is on life support and the credit swap market for MBSs is in shambles.See: CDS-Land

 
I live in Central Cali... and waiting patiently the last 18 months has been nothing but splendid. My wife thanks me everytime we look at the new houses and the prices, and she is itching to get a new home. Had I bought a house in the past two years, Id be a bit miffed right now. As it is, we also feel we have profited from the waiting game.

Good luck in your search TGunz.
Sacramento and San Diego are buyers markets right now.
MOP - remember that the term "buyers market" is a very misleading term. Technically, a "buyer's market" exists when buyers have more leverage than sellers, and are able to negotiate on their terms. That does not mean that it is a smart time to buy. Many lay-people make this mistake, and you hear realtors and mortgage goons using this term to try and influence buyers to get into the game.So while it is a "buyer's market" in SacTown and Diego right now, I believe it is an extremely poor time to buy unless you're buying at a significant discount (25-30%).

 
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proninja said:
Also, the only point of a pay option arm is to make the minimum payment. There's no reason to get the loan unless you're going neg-am. If anything less than 100% of people are paying the minimum payment, it's because they're dumb. (which lots are.)
Knowing this, what would do you think about the following facts, in a market that has been slowly declining for a little over a year:
But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
???
 
proninja said:
Chadstroma said:
Ministry of Pain said:
Chadstroma said:
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
:lmao:
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
80-95% of the people who are getting them make minimum payments. Figure 10 years ago less than 1% of loans were Pay Options/NegAm...now almost 1 in 3 in the state are...do the math, why are these people getting the loans? It's not to make 8.5% Intereast Only payments I promise you.
8.5% is a sub-prime rate on an Option ARM. It would only make sense that someone who has sub-prime credit and hence getting a loan in that sector who has historically shown bad credit decisions would make the min payment on that Option ARM.
I don't want to come across as an ###...this might be hard...You're off with the sub-prime comment. People with 700-825 Fico scores are getting Pay Option Arms without jobs, without income verification, without much money in the bank...they are getting 1-3% start rates and then they take an ARM for the I/O and Fully Amortized payments...the index is about 4.75-5%...then you add the 3-3.5% margin so the brokers can get 3-4 rebate points on the backend so the brokers can tell the "A" customer they aren't charging them much at all to do the loan...Where is ProNinja?

There are Pay Options with a fixed rate instead of the arm but for the brokers to receive a rebate you are still looking at a rate in the 7-7.5% range...not a bargain when 5 yr fixed rate Arms are going for 5.5-6.0% IMO
:bag: and hence my hatred for mortgage brokers as scum of the earth (with the exception of our buddy ProNinja).

Goodness, I hope you are wrong but when dealing with a mortgage broker- I can see it.
Also, the only point of a pay option arm is to make the minimum payment. There's no reason to get the loan unless you're going neg-am. If anything less than 100% of people are paying the minimum payment, it's because they're dumb. (which lots are.)
Rarely do I get a chance to disagree with you Pro. Before I go into that disagreement, let me reassure you and all that I know there are exceptions to the evil brokers out there but as a whole it is hard for me to think of a profession I am more cautious of when dealing with. This comes from years of experiance in the same industry and seeing many a poor person screwed by horrible, evil brokers. That all being said- I got my most recent mortgage through a broker (didnt know Pro could do loans out here in Illinois until it was too late or I would have given you a shot at it bud). The poor guy must have hated dealing with me because I checked every single thing and questioned every spot and he made very little off of me in the deal. Granted, I felt better about the transaction because if he screwed me over he could potentially lose out on millions in loan business a year considering my very good friend uses him for his development business and would stop using him if I was not taken care of.... but I digress. I disagree with you in this Pro.... the point of an Option ARM is for those people who have non-fixed incomes- business owner, sales person, etc where a month can be lean and the next month plentiful. The min payment is to allow for the cash flow issues of such a position. I would say ANY person who ALWAYS pays the MIN payment on an Option ARM just because that is all they can afford- first of all should not be in that product to begin with and second of all is the dumb one.

Everything else said- I agree 100% with.

 
proninja said:
Chadstroma said:
Ministry of Pain said:
Chadstroma said:
Want to know what a "bubble market" is?

But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized. Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.
;)
Question: Are they talking about Option ARM's that can negative-amortize or loans that actually are in negative amortization? The quote given really is not clear and it could be either.
From my personal experience....I now work in an office with about 20 L/O and we do somewhere around 50-100 loans a month...50% of our business is Pay Option Arms or NegAm loans, same thing, and we are almost exclusive in California...50%!
Yes, Option ARMs are popular and my belief over used. But the real question is HOW MUCH of these Option ARMs people are paying the min payment on and hence going into negative amortization.
80-95% of the people who are getting them make minimum payments. Figure 10 years ago less than 1% of loans were Pay Options/NegAm...now almost 1 in 3 in the state are...do the math, why are these people getting the loans? It's not to make 8.5% Intereast Only payments I promise you.
8.5% is a sub-prime rate on an Option ARM. It would only make sense that someone who has sub-prime credit and hence getting a loan in that sector who has historically shown bad credit decisions would make the min payment on that Option ARM.
I don't want to come across as an ###...this might be hard...You're off with the sub-prime comment. People with 700-825 Fico scores are getting Pay Option Arms without jobs, without income verification, without much money in the bank...they are getting 1-3% start rates and then they take an ARM for the I/O and Fully Amortized payments...the index is about 4.75-5%...then you add the 3-3.5% margin so the brokers can get 3-4 rebate points on the backend so the brokers can tell the "A" customer they aren't charging them much at all to do the loan...

Where is ProNinja?

There are Pay Options with a fixed rate instead of the arm but for the brokers to receive a rebate you are still looking at a rate in the 7-7.5% range...not a bargain when 5 yr fixed rate Arms are going for 5.5-6.0% IMO
:loco:

and hence my hatred for mortgage brokers as scum of the earth (with the exception of our buddy ProNinja).

Goodness, I hope you are wrong but when dealing with a mortgage broker- I can see it.
Also, the only point of a pay option arm is to make the minimum payment. There's no reason to get the loan unless you're going neg-am. If anything less than 100% of people are paying the minimum payment, it's because they're dumb. (which lots are.)
Rarely do I get a chance to disagree with you Pro. Before I go into that disagreement, let me reassure you and all that I know there are exceptions to the evil brokers out there but as a whole it is hard for me to think of a profession I am more cautious of when dealing with. This comes from years of experiance in the same industry and seeing many a poor person screwed by horrible, evil brokers. That all being said- I got my most recent mortgage through a broker (didnt know Pro could do loans out here in Illinois until it was too late or I would have given you a shot at it bud). The poor guy must have hated dealing with me because I checked every single thing and questioned every spot and he made very little off of me in the deal. Granted, I felt better about the transaction because if he screwed me over he could potentially lose out on millions in loan business a year considering my very good friend uses him for his development business and would stop using him if I was not taken care of.... but I digress.

I disagree with you in this Pro.... the point of an Option ARM is for those people who have non-fixed incomes- business owner, sales person, etc where a month can be lean and the next month plentiful. The min payment is to allow for the cash flow issues of such a position. I would say ANY person who ALWAYS pays the MIN payment on an Option ARM just because that is all they can afford- first of all should not be in that product to begin with and second of all is the dumb one.

Everything else said- I agree 100% with.
Business owners and successful persons on non-fixed incomes don't have cash on hand to be able to afford the mortgage during "lean" months?

Not sure I buy that Chad.

 
Why is an interest-only loan a risky loan in an expensive housing market?

Most people live in houses for less than 10 yrs and if you are paying down principal on a $600,000 loan it is a drop in the bucket compared to what the market may do.

 
proninja said:
I would have no problem owing more than my house is worth - provided I've been dilligent in putting the home equity I take out every month in a vehicle appreciating more quickly than my loan is going up.
What is an appreciating vehicle?
 
proninja said:
JettPowers said:
proninja said:
JettPowers said:
proninja said:
I've said it a million times, and I'll say it again. There is no such thing as a bad or a good loan program. They are simply financial tools designed to acomplish a specific goal.
Yeah, and the "specific goal" is: "to pray to God that the value of my home doubles before the loan resets".Sounds like a good, solid loan program to me. :thumbup:
Tell me, at what age are you on track to retire at? Proof is in the pudding.
Yeah, because everyone who got one of those loans is on track for early retirement. ;)
Don't want to answer the question? People using a loan incorrectly does not say that the loan itself is any worse than any other loan. I have a neg am loan, and a specific plan. If you feel like rolling your eyes at that, I'm going to ask you what your plan is and see how it's better than mine.It doesn't matter that a tool is used incorrectly when looking at the usefulness of said tool.
Subprime lending isn't getting creamed right now b/c borrowers have been using their money wisely with these "tools". Default rates in SoCal are skyrocketing b/c the only way people could afford homes was to rely on neg am and IO tools and home their home appreciates.Obviously it can be financially advantageous to have your money working for you instead of sitting in your home but that means you have to be fiscally responsible and invest wisely. What percentage of the 67% in SD last year who used neg-am or IO do you think fall into that category?5%? 3%?
 
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proninja said:
JettPowers said:
proninja said:
JettPowers said:
proninja said:
I've said it a million times, and I'll say it again. There is no such thing as a bad or a good loan program. They are simply financial tools designed to acomplish a specific goal.
Yeah, and the "specific goal" is: "to pray to God that the value of my home doubles before the loan resets".Sounds like a good, solid loan program to me. :excited:
Tell me, at what age are you on track to retire at? Proof is in the pudding.
Yeah, because everyone who got one of those loans is on track for early retirement. :lmao:
Don't want to answer the question? People using a loan incorrectly does not say that the loan itself is any worse than any other loan. I have a neg am loan, and a specific plan. If you feel like rolling your eyes at that, I'm going to ask you what your plan is and see how it's better than mine.It doesn't matter that a tool is used incorrectly when looking at the usefulness of said tool.
Subprime lending isn't getting creamed right now b/c borrowers have been using their money wisely with these "tools". Default rates in SoCal are skyrocketing b/c the only way people could afford homes was to rely on neg am and IO tools and home their home appreciates.Obviously it can be financially advantageous to have your money working for you instead of sitting in your home but that means you have to be fiscally responsible and invest wisely. What percentage of the 67% in SD last year who used neg-am or IO do you think fall into that category?5%? 3%?
Well who's fault is it that a majority of CA residents excluding yourself were dumb ####s? I do have to applaud your efforts in this thread. I find it amusing that because home ownership is good for some that those folks think everyone should own a home.
 

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