Real Estate Crash thread

[liv2ski]

Pretty good article for all the "Experts" in here with an axe to grind. The good news is, as long as the economy hangs in there, housing will continue to heal. With the amount of foreclosures and "Shadow Inventory" working it's way down, perhaps we will get to a normal "Market" again that doesn't require $40 Billion a month in MBS purchases by the FED

"At the core of QE3 and every other program aimed at saving the financial system is the ultimate mission of stunting the natural market process. It is hard to find any system that is purely market based especially when it comes to housing. The US since the Great Depression has heavily subsidized housing via Fannie Mae, Freddie Mac, and other programs but also through more subtle benefits like those offered via the mortgage interest deduction. Yet each step that has been taken to “fix” the housing market has become more dramatic in fashion and is like using a bazooka to remove one cockroach. At first if you recall it was a suspension of mark-to-market accounting. Then it was programs like TARP and Maiden Lanes designed to transfer toxic assets off bank balance sheets (a good amount still sit in the Fed balance sheet). Today the Fed is now on QE3 and will need to commit half-a-freaking-trillion dollars over the next year in MBS purchases just to make interest rates stay the same or tick lower by a tiny amount. To think that this kind of massive action will have no repercussions is simply ignoring what we are now seeing. In essence, to keep things going at the current pace the Fed needs to get more dramatic.

What about the shadow inventory?

At first shadow inventory did not exist. Then it was an issue of defining what constituted shadow inventory. Now, with half a decade of action items we realize that:

-a. Suspension of mark-to-market was largely the first step in creating a massive amount of shadow inventory

-b. Deny this pool of properties exists while working behind the scenes to off load properties initially. Now banks are selling into a largely controlled system (i.e., the Fed/GSEs are the only game in town)

-c. If the market was truly functioning, why in the world would the Fed need a market intervention program like QE3?
http://www.doctorhousingbubble.com/m...+Love+SoCal%29

[Benny Profane]

Watch out for those too good to be true bargains out there......

http://www.heraldandnews.com/members...a4bcf887a.html

[powder11]

No.

You know that a tool is somebody who goes on and on how he's got it all going on describing his little suburban hell and the debt servitude he's signed on to for the rest of his fucking life, as though he's got it all figured out.

chicken little always the benchwarmer

[Benny Profane]

chicken little always the benchwarmer

Hey, if you have a good line on a reasonably priced garage attached condo in Summit county, I'm all ears, but, still priced for a previous era, from what I see.

[cramer]

Hey, if you have a good line on a reasonably priced garage attached condo in Summit county, I'm all ears, but, still priced for a previous era, from what I see.

when your done paying your current landlords house off, let us all know, I'll go in on a place for you to pay ours off next. After paying roughly a quarter million dollars in rent for 12 years, I got tired of piling my money into someone elses equity. You'll get there again sooner or later. I assure you.

[liv2ski]

I don't know the Summit County market, but as Spats said, around Tahoe, it is still cheaper to rent than it is to buy. I am hoping the bottom has been put in the CA market, but I will wait until next Spring, before making any big purchases on a second home.

[powder11]

when your done paying your current landlords house off, let us all know, I'll go in on a place for you to pay ours off next. After paying roughly a quarter million dollars in rent for 12 years, I got tired of piling my money into someone elses equity. You'll get there again sooner or later. I assure you.

Bingo! I've had a bunch of Benny's paying down my mortgages for almost 10 yrs now. After reconciling all the rental income, expenses, tax deductions, etc... I've probably paid less towards my housing costs over that period than if I'd have rented a similar property and there's a good chance I might see all that money again when I retire. Most people who rent where I live don't have much security in holding a place for a long term and end up bouncing around from rental to rental. I kind of like where I'm at and all the little upkeep projects as well as living on my terms, not someone elses. With world class skiing and mtn biking literally right out my back door, I don't miss out on any fun. I'm sure I could've sat around coming up with a million reasons not to do what I'm doing and some of those are all too real, believe me, but if it all crashed and burned tomorrow I would just go rent. No risk, no reward.

[Shredhead]

Hey, if you have a good line on a reasonably priced garage attached condo in Summit county, I'm all ears, but, still priced for a previous era, from what I see.

What's the allure of Summit Co, I just don't see it?

[mcsquared]

What's the allure of Summit Co, I just don't see it?

No kidding. This is one of the main reasons I think Benny has a couple screws loose. Is it the outlet mall? Keystone? I-70?

Isn't it about time cramer told us where he lives, how much he paid, how much zillow says his house is worth, and some anecdote about a buddy of his who did something stupid and how he knew better.

[iceman]

Summit checks some boxes for Benny, it's close to a major urban area, has good skiing and biking (maybe not the best ever, but good compared to most places near urban areas at least), I can see it. He had a good winter there back about ten years ago, hey why the heck not?

[Dantheman]

Watch out for those too good to be true bargains out there......

http://www.heraldandnews.com/members...a4bcf887a.html

"The Hankins now will be stuck with the cost of remediation, which one contractor said costs $5,000 to $8,000 or more, depending on the property"

I would have expected the remediation costs to be more. It's terrible these people didn't know and the house made them and their kid sick, but, they got the house for $36k. Even if you pay an extra $8k for remediation you are getting a steal. Get it cleaned up and move back in.

[Benny Profane]

Summit checks some boxes for Benny, it's close to a major urban area, has good skiing and biking (maybe not the best ever, but good compared to most places near urban areas at least), I can see it. He had a good winter there back about ten years ago, hey why the heck not?

Yup. Major airport, a city that's kinda cool with a very temperate climate (70 degree January days are not unusual), very cheap skiing (with free skiing now if I travel to Tahoe), a LOT of lift serviced skiing within a few hours drive, and a very long season (ABasin). Denver yuppies keep the RE up there priced high, though.

Plus, I know the place. I'm too old to learn new mountains.


Edit: Forgot about marijuana basically being legal, with stores everywhere.

[liv2ski]

Forgot about marijuana basically being legal, with stores everywhere.

There you have it. The new force behind the next RE bubble. Legalize it and they will buy. Change you can believe in.

[powder11]

There you have it. The new force behind the next RE bubble. Legalize it and they will buy. Change you can believe in.

The banks could turn all those foreclosed homes we keep hearing about into grow-ops. You can't lose!

I don't think we see another RE bubble for a long time. My bet is housing continues at a modest pace and loses the allure of get rich quick flipping. Those in it for the long haul will get their investment back over time. Certainly there will always be savvy investors who make a good buck at RE, but will probably take an entire generation gap before the avg homeowner gets rich overnight for doing noting more than renovating their kitchen countertops and appliances.

[cramer]

No kidding. This is one of the main reasons I think Benny has a couple screws loose. Is it the outlet mall? Keystone? I-70?

Isn't it about time cramer told us where he lives, how much he paid, how much zillow says his house is worth, and some anecdote about a buddy of his who did something stupid and how he knew better.

Oakley, Ca, 223K, sorry, 230K but i took the interest free govt loan. so my loan was for 223K and i pay 500 a year back tax season. So that covered my down payment. Zillow has it listed at 221K. I owe 204K. I closed on it dec 21st 2008. I bought almost 4 years ago when you had the pick of the litter for houses. Go out and see how many listings you have now compared to then. As for my buddy, you mean everyone i know? My brother in law bought a house for 440K. He short sold it for 178K same time i bought my house. My buddy and his brother bought a townhouse, yes townhouse for 510K, took one of them 2 loan deals out. They walked when older brother lost his job. My buddy whose an electrician and his wife is a teacher bought a house for over 600K. Yes, 600K. They tried to loan mod and lived in their house payment free for 2 years during that process. My daycare provider...her husband worked for comcast and she had a daycare. They bought a house for 800K, yes sir, 800K. They bounced last year. My other buddy, he's IT his wife is a teacher, bought a house for 560K. Told me "they'll make it work". Well guess what, they didnt. So, you sir, tell me, who made the right decision here? I'm above water, 4 years later and am here for the long term. I'm collecting the cash come tax time and doing what i want with my own place. The moral of the story is, I, knew for a fact I could not afford any of the above prices and i make more than all of them, lol. My credit is crap, i use to spend recklessly, i was in no position to even fathom taking on a mortgage. Then shit hit the fan here. So i called a loan guy. dont worry about your credit. You don't have hardly any debt and you've got years of paying 2000 a month. I'll get you a house. sweet....

Oh, here's the kicker, 14 years from now i'll own a home. I forgot to mention i refied into 15 year. That was the one mistake i did make. I did it too early. I should have waited until now. I didnt think the rates would stay this low let alone go ever lower!!

Once again though, it depends on your situation, where you live, the market, etc. Id been paying 1800-2000 a month for the last decade. Buy a house, its less than rent? Fuck, no brainer. After the refi, my payment went up quite a bit obviously. But my thoughts were id be paying more down on the equity and if i lost my job i could sell it and not worry about that burden.

Either way, there was probably alot of luck involved too. I couldnt have bought at a better time imo. There were TONS of houses out there, TONS.

[Benny Profane]

There you have it. The new force behind the next RE bubble. Legalize it and they will buy. Change you can believe in.

Not a bubble, but, if the shitheads on the anti weed side in CO. don't screw it up, I'll bet a lot of retired Boomers choose that state over others for that reason.
Should start an old age home with bongs everywhere.

[Shredhead]

Yup. Major airport, a city that's kinda cool with a very temperate climate (70 degree January days are not unusual), very cheap skiing (with free skiing now if I travel to Tahoe), a LOT of lift serviced skiing within a few hours drive, and a very long season (ABasin). Denver yuppies keep the RE up there priced high, though.

Plus, I know the place. I'm too old to learn new mountains.


Edit: Forgot about marijuana basically being legal, with stores everywhere.

I understand all of that, except competing with the yuppies. They have to be close to Denver, you don't. 60 miles further west and the tourist factor goes down exponentially.
Vail and BC are the best resorts on the Epic pass and if you're coming from the west, relatively traffic free? Plus long term parking at EGE is free and they have directs from NJ!

[Benny Profane]

I understand all of that, except competing with the yuppies. They have to be close to Denver, you don't. 60 miles further west and the tourist factor goes down exponentially.
Vail and BC are the best resorts on the Epic pass and if you're coming from the west, relatively traffic free? Plus long term parking at EGE is free and they have directs from NJ!

But, I want to be close to Denver. I'm a city boy, have been for most of my adult life. I need other things besides playing in mountains.
Denver doesn't really turn me on a lot, but, it ain't NJ.

[Benny Profane]

And, for my money, A Basin is the best mountain on the Epic Pass. Vail? Really?

[Shredhead]

And, for my money, A Basin is the best mountain on the Epic Pass. Vail? Really?

My bad. I hope you find happiness in SuCo!

[frorider]

I don't know the Summit County market, but as Spats said, around Tahoe, it is still cheaper to rent than it is to buy..

\\

For similar quality, no. Not necessarily. Our newer home (2002) has a market rent that exceeds what we are paying in mortgage + property tax. Our older home was easily rented thanks to the large garage, and the rent covers our mortgage, prop tax, all insurance, with money left over...and we could easily raise the rent by another $150 and still be in line w/ rental market.

I can't speak to other Tahoe neighborhoods, but for the two hoods I'm familiar with, if you have a steady salary and good credit rating, it's hard to find any reason to not buy. Ridiculous how low the rates are right now.

[concretejungle]

I don't have anywhere else to post this so here it goes. Fuck yes my house in CO sold after only 3 months on the market and about 1 month priced correctly (stupid bitch of a realtor).

Yes, honey I know I can't spend the money on new skis, a new mountain bike and fun stuff. Being an "adult" isn't all it's cracked up to be but watching someone mow the lawn at our rented condo while I drink a beer at 10 am has a certain cachet.

Oh, and fuck Columbus. Stupid fucking banks are closed today because he found something that was already discovered. Who else gets Columbus day off? I want my money.

[cramer]

I don't have anywhere else to post this so here it goes. Fuck yes my house in CO sold after only 3 months on the market and about 1 month priced correctly (stupid bitch of a realtor).

Yes, honey I know I can't spend the money on new skis, a new mountain bike and fun stuff. Being an "adult" isn't all it's cracked up to be but watching someone mow the lawn at our rented condo while I drink a beer at 10 am has a certain cachet.

Oh, and fuck Columbus. Stupid fucking banks are closed today because he found something that was already discovered. Who else gets Columbus day off? I want my money.

i enjoyed the day off. but i work for a stupid f'n bank.

[4matic]

This house near my hood listed 10/3/2012 on MLS at $349k. Current bid is $410k and there are multiple backup bids. It isn't that nice either; needs an update.

http://www.realtor.com/realestateand...9_M14553-91688

[Eldo]

Weird, only a crawl space on a house built in the 1950s? Is that normal around there?

Property taxes seem cheap. No wonder CA governments are going bankrupt.