Real Estate Crash thread

[Hugh Conway]

It is a normal market in every sense of the word. The only people who see it as totally fucked up are the ones who got burned in the last cycle and the morons on the sidelines who wish the market had tanked even more than it did in hopes they could've got in at the basement level price. Too bad, so sad and the world keeps on turning.

be easier to say "there is no normal"

[TheMessenger]

People who think the housing market is 'recovering' are idiots. Housing Market isn't going anywhere but down in the coming years. The market is being propped up by the Government policy. Current price stabilization is a result of the backlog of foreclosures being kept off the market due to the moratorium (robosigning) and record low interest rates.. Those foreclosures are going to flood the market in the coming months. (How convenient it is that they are kept off the market in the months before the election, giving the illusion of price stability.) Obama wins, economy collapses and debt crisis ensues, unemployment goes up, housing market goes down. Romney wins, economy recovers, but government housing subsidy is removed, housing goes down. Either way, higher interest rates, and all of those held up foreclosures are released on the market, market goes down.

How many people are waiting to sell their house the moment there is a 'recovery' in prices? That is a huge number. Well it ain't going to happen, and they can't wait forever. As soon as it is clear that 'it ain't going to happen' we will finally have a capitulation and finally a 'normal' market.

Thats the truth of the situation people. You can't fight the market forces.

[iceman]

Well you better sell then man.

[cramer]

People who think the housing market is 'recovering' are idiots. Housing Market isn't going anywhere but down in the coming years. The market is being propped up by the Government policy. Current price stabilization is a result of the backlog of foreclosures being kept off the market due to the moratorium (robosigning) and record low interest rates.. Those foreclosures are going to flood the market in the coming months. (How convenient it is that they are kept off the market in the months before the election, giving the illusion of price stability.) Obama wins, economy collapses and debt crisis ensues, unemployment goes up, housing market goes down. Romney wins, economy recovers, but government housing subsidy is removed, housing goes down. Either way, higher interest rates, and all of those held up foreclosures are released on the market, market goes down.

How many people are waiting to sell their house the moment there is a 'recovery' in prices? That is a huge number. Well it ain't going to happen, and they can't wait forever. As soon as it is clear that 'it ain't going to happen' we will finally have a capitulation and finally a 'normal' market.

Thats the truth of the situation people. You can't fight the market forces.

Backlog of foreclosures kept off the market? Where are these houses at? The Government hasnt propped the housing market up since 2009. If you hoping for all these foreclosurs to hit the market, your going to wait the rest of your life. Everyone is short selling. Why would you foreclose when a bank will let you short sale your house and be back in the game 3 years down the road. I've got floors up people i support that all they do is approve short sales. The reality is, there is no inventory, its all been bought up the last 4 years. I'd know, I provide tech support for quite a large holder in the mortgage industry. People are either short selling or refy'n and we are seeing a huge uptick in the normal home loans too.
You sound like benny in '08 when i bought.

[cramer]

It is a normal market in every sense of the word. The only people who see it as totally fucked up are the ones who got burned in the last cycle and the morons on the sidelines who wish the market had tanked even more than it did in hopes they could've got in at the basement level price. Too bad, so sad and the world keeps on turning.

thank you powder....You pretty much summed it up.

[TheMessenger]

Backlog of foreclosures kept off the market? Where are these houses at?

They are in court as we speak.

The Government hasnt propped the housing market up since 2009.

Bwahaha. Whatever. Yeah, your right, not indirectly, but pretty much in every other way. There is no inventory because the government has forced the banks to keep the foreclosures off the market. That and the fed doing this thing called QE3. If that isn't government trying to manipulate the market, then I don't know what is. Problem is these schemes just don't work and delay the inevitable.

But you keep on hoping. Wait until after November, you'll see what I'm talking about.

You bought in '08? Good god, you sure must be desperate for a housing 'recovery' then. Sorry for you.

But, I don't really care about any of this. Nothing I say will change the reality. i live within my means, and don't have any debt whatsoever.. So whatever happens, free I tell you.

[snowsprite]

Backlog of foreclosures kept off the market? Where are these houses at? The Government hasnt propped the housing market up since 2009. If you hoping for all these foreclosurs to hit the market, your going to wait the rest of your life. Everyone is short selling. Why would you foreclose when a bank will let you short sale your house and be back in the game 3 years down the road. I've got floors up people i support that all they do is approve short sales. The reality is, there is no inventory, its all been bought up the last 4 years. I'd know, I provide tech support for quite a large holder in the mortgage industry. People are either short selling or refy'n and we are seeing a huge uptick in the normal home loans too.
You sound like benny in '08 when i bought.

Short-sales come with their own set of problems. They can come back and bite you in the arse years later. Essentially, you are still not making good on your obligation and the banks can (and have been known to) come back and demand repayment on balances. I think word is out on this and some people may be willing to take the protections of bankruptcy with longer credit damage than to risk short sales without such protections. Just a theory, but it does seem like a possible explanation for why people go the foreclosure route rather than short-selling.

[Benny Profane]

The Government hasnt propped the housing market up since 2009.

Wow.

I always have to remind myself how uninformed most Americans are about the world around them, even with the constant stream of all kinds of media available to them. Do yourself a favor, dude, and google FHA, Fannie and Freddie, and Fed monetary stimulus.
You live in California, right? Here, I'll help you start by telling you one thing. There are hundreds of people surrounding you in your market that either bought their homes with FHA (the government) sponsored 3.5 down payment loans for up to about $700,000, with very relaxed credit score requirements (around 600 minimum). Or, they are seriously considering buying a home using that financing. This never happened before'09. Well, it did, but it was done by private banks, and they were called "subprime" loans. Remember "subprime" loans? Now your government is a subprime lender, the only one out there. FHA loans were actually doled out quite conservatively to the middle and lower classes for much lower amounts and much higher credit requirements before the crash. This is how your government, or you and I and the rest of us paying taxes, is propping up the market. (And bailing out the banks, too, but we won't go there now)

Fuck it, though. I'm still hoping this ski condo thing crashes soon. Maybe after the election. I'm pretty confident that a lot of the lies and behind the scenes machinations propping up prices will be dropped. I hope.

[Benny Profane]

Jesus, you're all idiots. Fed Govt. has been heavily intervening in the housing market since the 1940's. It's neither new nor particularly controversial, unless you want to blame the gov for stupid, private lending decisions. I read the statements on the last page of this thread and thank god that none of you (so far as I know) hold positions of responsibility with respect to serious economic forecasting.

Yes, well, thank god for the geniuses who are actually making those forecasts.

[4matic]

Fuck it, though. I'm still hoping this ski condo thing crashes soon. Maybe after the election. I'm pretty confident that a lot of the lies and behind the scenes machinations propping up prices will be dropped. I hope.

Problem is if ski real estate crashes hard again it will put the viability and sustainability of the resort at risk. Some ski resorts will close if things get really bad again and then you are stuck with a condo with no resort. Same reason I will never buy a home in a golf specific community.

[liv2ski]

Jesus, you're all idiots. Fed Govt. has been heavily intervening in the housing market since the 1940's. It's neither new nor particularly controversial, unless you want to blame the gov for stupid, private lending decisions. I read the statements on the last page of this thread and thank god that none of you (so far as I know) hold positions of responsibility with respect to serious economic forecasting.

Welcome to the pool of misinformed comments (you too are now an idiot). Yes, FHA has been around since the 30's, it original mission was to introduce the 30 year loan, as previous to that, conventional lenders made loans with balloon payments, that caused many to lose their home in the depression, when other sources of financing dried up. The US guberment has always supported housing with the tax write off you get from interest paid on a home loan. However, the down payment assistance that was offered in 2008 was a new tactic specifically put out there to support prices (for the banks) and the increasing of FHA loans from a max of $417k in CA to $729k was like in the depression years, to create a lender of last resort, as conventional lenders withdrew from the market. FHA has always been a 3.5% down loan, so I am uncertain why Benny gets all riled up over that aspect of the program. It also has very expensive mortgage insurance premiums to help keep it solvent, so unlike FNMA and FHLMC, I am not worried about FHA going insolvent and needing a tax buyer bail out.
Clearly, if you knew anything about the industry I have worked in for 28 years, you would know, starting with the Clinton years, changes have been allowed in the finance industry that almost toppled our economy. None of the recent legislation (Frank Dodd) address those most basic problems, rather it is business as usual for Wall St and the Banking sectors that own your representatives in Washington DC. So be happy in your smug little World, I for one hope the FED can continue to find ways to kick the can down the road just awhile longer. But be aware that will be at the expense of an even harder eventual reset.

[Benny Profane]

Problem is if ski real estate crashes hard again it will put the viability and sustainability of the resort at risk. Some ski resorts will close if things get really bad again and then you are stuck with a condo with no resort. Same reason I will never buy a home in a golf specific community.

Not looking slopeside. Just close by with a variety of hills, like Summit or Tahoe.

[Benny Profane]

Welcome to the pool of misinformed comments (you too are now an idiot). Yes, FHA has been around since the 30's, it original mission was to introduce the 30 year loan, as previous to that, conventional lenders made loans with balloon payments, that caused many to lose their home in the depression, when other sources of financing dried up. The US guberment has always supported housing with the tax write off you get from interest paid on a home loan. However, the down payment assistance that was offered in 2008 was a new tactic specifically put out there to support prices (for the banks) and the increasing of FHA loans from a max of $417k in CA to $729k was like in the depression years, to create a lender of last resort, as conventional lenders withdrew from the market. FHA has always been a 3.5% down loan, so I am uncertain why Benny gets all riled up over that aspect of the program. It also has very expensive mortgage insurance premiums to help keep it solvent, so unlike FNMA and FHLMC, I am not worried about FHA going insolvent and needing a tax buyer bail out.
Clearly, if you knew anything about the industry I have worked in for 28 years, you would know, starting with the Clinton years, changes have been allowed in the finance industry that almost toppled our economy. None of the recent legislation (Frank Dodd) address those most basic problems, rather it is business as usual for Wall St and the Banking sectors that own your representatives in Washington DC. So be happy in your smug little World, I for one hope the FED can continue to find ways to kick the can down the road just awhile longer. But be aware that will be at the expense of an even harder eventual reset.

I know FHA has always been 3.5 down. But not for fucking 700000 loans! Jezez Christ, my tax dollars are helping a very expensive market survive, and that money is going to people who really don't need it. Before the crash, these loans were doled out much more conservatively.

[4matic]

Zero down VA loans post WWII was the backbone for building the middle class. Having a governement sponsored entry level loan program is not a bad thing.

[powder11]

People who think the housing market is 'recovering' are idiots....yada yada yada...
Thats the truth of the situation people. You can't fight the market forces.

The RE market doesn't have to "recover". It is what it is. There is an entire new crop of homeowners out there who recently bought homes to live in for many years and aren't too concerned about a recovery. RE has historicly been a long term investment with a modest return. Some cycles spike higher than others and create bubbles like we recently saw, but that is not the norm and in those bubbles, you'd better be on the right side of the sell or your gonna get fucked hard. The folks who got fucked hard in the last cycle have washed out, but those are the folks who are going to be most vocal and crying about it all the way to the grave. The foreclosure process is running it's course. Maybe there's millions, thousands, hundreds still on the books; nobody really knows, but that is not an indicator of bad times ahead. It represents a buying opportunity.

In the meantime, now is a pretty good opportunity to own a home for the long term. Prices are relatively low, interest rates are low and credit is available. You would have to be an idiot to pass up on a pretty unique buying scenario. Some people probably think that it's fucked that prices have yet to go up significanly in a relatively short time since the crash and therefore the market is stagnent or that we have yet to see the worst of it, but my view is that I've got a really nice place to live, that I can afford and hopefully someday that pays off when I want to retire. That is about as normal as normal is.

[Benny Profane]

The folks who got fucked hard in the last cycle have washed out

Oh no they haven't. It's just starting in the Northeast. NJ defaults are now larger than Nevada. Sales around here in wealthy southwest CT are awful. There have been literally millions living in their homes who haven't paid their mortgages for over a year. Why aren't they on the street? Obama wouldn't be considered for President, and the major banks would fold. Very much a con game played by the people in power, and may change a lot after November, how, I don't know.

Lovely that you're happy in your home, but, sure hope shit doesn't happen and you have to sell. Then the market won't look so "normal", I'll bet.

[powder11]

Oh no they haven't. It's just starting in the Northeast. NJ defaults are now larger than Nevada. Sales around here in wealthy southwest CT are awful. There have been literally millions living in their homes who haven't paid their mortgages for over a year. Why aren't they on the street? Obama wouldn't be considered for President, and the major banks would fold. Very much a con game played by the people in power, and may change a lot after November, how, I don't know.

Lovely that you're happy in your home, but, sure hope shit doesn't happen and you have to sell. Then the market won't look so "normal", I'll bet.

Those people are already dead and washed out, but saying millions of people are waiting to default is an outright exaggeration and you're probably the victim of some sensationalist article in the not so credible anymore Murdoch St Journal. Besides, the entire tri state area could fall off the face of the earth for all I care. You're looking at all this from an extremely macro, theoretical point of view. When you get involved and have actual numbers in front of you, there is money to be made in this market. It's like dollar cost averaging stocks. Some properties will have a higher buy price, but over the long haul it will pay off. You just can't have too much of it on margin or you will get fucked. So what if people do? That's their problem, not mine. Even with the market correction and the costs associated with selling RE, I would probably be up a few % today, but I've got decent cash flow from my rental property and I can afford the payment on my house alone, so I'm not going to worry about it in the short term.

[Benny Profane]

Those people are already dead and washed out, but saying millions of people are waiting to default is an outright exaggeration and you're probably the victim of some sensationalist article in the not so credible anymore Murdoch St Journal. Besides, the entire tri state area could fall off the face of the earth for all I care. You're looking at all this from an extremely macro, theoretical point of view. When you get involved and have actual numbers in front of you, there is money to be made in this market. It's like dollar cost averaging stocks. Some properties will have a higher buy price, but over the long haul it will pay off. You just can't have too much of it on margin or you will get fucked. So what if people do? That's their problem, not mine. Even with the market correction and the costs associated with selling RE, I would probably be up a few % today, but I've got decent cash flow from my rental property and I can afford the payment on my house alone, so I'm not going to worry about it in the short term.

The last place I go for info is the WSJ.

If you think that the entire tri state could fall off the face of the earth, along with it's massive asset wealth and income producing ability, without any harm to the rest of America, then there's no use arguing anymore. As I said, good luck selling your house, where ever it is.

[4matic]

Bay Area. Cheaper to buy than rent:

In the San Francisco metro area, it was 28% cheaper to buy than rent. It was 31% less expensive to be a homeowner in the San Jose metro area and in the Oakland metro area, a homeowner would save 41% over renting.

http://blog.sfgate.com/ontheblock/fi...9.08.06-PM.png

[skier666]

Closed escrow on sale & on purchase of new home this morning...woot! Now I get spend all the money we made on the sale to paint, install security system, landscape the backyard, and so on, and so on....such a great investment to own a home

For the SF Bay area bubbles of all bubbles, I saw this the other day...

The recorded sales volume of homes in San Francisco rose 29.1% on a year-over-year basis last month (625 recorded sales in August 2012 versus 484 sales in August 2011), up 10.3% as compared to the month prior, the highest August sales volume since 2006 (669 sales). An average of 600 homes have sold each August in San Francisco since 2004 when sales volume peaked at 814. San Francisco's median sales price in August was $700,000, up 13.2% on a year-over-year basis, down 2.0% as compared to July.

On a side note, rents for properties that we manage on a basic 2bed/2bath in Santa Clara are approaching $2000/mo

[liv2ski]

Congrats on the new home 666. I love San Francisco (go Niners) and if I didn't live in San Diego, San Fran would be next on the list. To bad you didn't snag that home in Dec 2011 huh? I haven't raised the rents on my places in 3 years, guess I need to look at that. Enjoy the new place.
O and Benny, P11 lives in Canada. Maybe Whistler?

[Benny Profane]

Oh, Vancouver. That's cracking as we speak. Like million dollar two bedroom "bungalows" is reality. Oh, wait, it's different there. Sorry.

[powder11]

Oh, Vancouver. That's cracking as we speak. Like million dollar two bedroom "bungalows" is reality. Oh, wait, it's different there. Sorry.

Nope, Whistler buddy. Different market and a much different story than Vancouver. A lot of the Whistler market was 2nd homeowners from the states, so we took a hit just like everyone else. The house next door to me was a dude from Seattle who went into foreclosure and has been vacant for the last 2 years.

Vancouver on the other hand has been on fire, so it's a good time to sell right now. It's funny to me that you are completely incapable of corelating RE market up and downs with buy/sell opportunities. Probably why you continue to sit on the bench...

[cramer]

Short-sales come with their own set of problems. They can come back and bite you in the arse years later. Essentially, you are still not making good on your obligation and the banks can (and have been known to) come back and demand repayment on balances. I think word is out on this and some people may be willing to take the protections of bankruptcy with longer credit damage than to risk short sales without such protections. Just a theory, but it does seem like a possible explanation for why people go the foreclosure route rather than short-selling.

California is a non-recourse state. They can't come after you unless its a rental or not your primary residence. They may be able to come after you on a heloc or if you are one of the people who got 2 loans to buy a house. No comment on that. Because i don't know an never researched it. I think the feds come after you but not the loan originators.

[cramer]

Cramer, are you being purposely dense? 1)Look at all the market intervention over the last 3 years to support RE Values. 2)The FED telling banks they no longer have to show loans 90 days late marked to market on their balance sheet and banks allowing RE to sit for years before foreclosing. 3)FED set to buy $40 BILLION a month in MBS to get rates even lower. There has been unprecedented support of RE values since 2009, at a huuuuge cost and really, imo, it has only delayed the inevitable. I work in mortgage banking, so I love the support, but I still think it is all for not without a solid rebound in hiring (250k a month forever) and wage growth. Sorry, but neither candidate has a plan for either. Obummer drags us down slowly, Mitt will crash and burns us faster. So ya, it doesn't matter. Hey, but have a great day.

Sorry, i should have been more clear. Normal peons don't know about what the fed is doing backend snatching up Mortgage backed securities. They arent going to see a penny of that unless they know any better. I was more pointing out that you could go get a house for free in 08-09 with an FHA. I really dont know whats going to happen, im just looking at history. History shows, people like living in california so our housing market is pretty good no matter the circumstances. I mean hey, if shit hits the fan, i have no problem bouncing. No skin off my back. I tried, failed and back to where i started, renting, hehe. Oh well.