Real Estate Crash thread

[skiballs]

^ population grow is good for port cities like Baltimore & Oakland. Sparrows Point at the mouth of the Baltimore harbor is a sweet piece of land, except for the toxic waste. I live a little farther done the bay.
You know, with smug douchebag sailors.

[Benny Profane]

don't you live in Baltimore? Aka "Detroit of the East" (and Oakland's "Detroit of the West") people have to actually want the land for it to go up in value.

And, r.e. California, the good lands taken but there's plenty of "other" land that with some changes in zoning could allow for a massive increase in population in the same footprint.

Baltimore has it's issues, but it's hardly Detroit.

[Chainsaw_Willie]

So what's going to happen with interest rates? I'm finally in a position to buy something and it looks like prices and rates are starting to spike up.

[4matic]

So what's going to happen with interest rates? I'm finally in a position to buy something and it looks like prices and rates are starting to spike up.

No one knows what will happen to Long term interest rates. They are down considerably today. You can always look at hybrid loans 5/25, 7/23 etc. The spread to fixed rates has widened considerably since short term rates can be more controlled by the Fed. Historically rates are still low but with rate rises comes more price risk.

[cramer]

Mark my words, prices will be lower in 12 months. Prices are all ready rolling over in many previously hot areas if you look at the 6 month, 3 month and 1 month averages. Brokers are telling me lots of previous home shoppers are out of the market with rates scary high at 4.5%

So are you saying now is the time to sell? Because there sure isnt any inventory out there. But sounds like there isnt many buyers either. My value only went up because they built some new houses and those all got snatched up. They havent built anything else back there and everything has leveled out when it comes to home values. They've sat idle the last couple months.

[4matic]

My short sale flip closed. 3.5% purchase price IRS withholding sucks but I'm not complaining. 200% return on capital profit after expenses. Only in America!

I hope my new neighbors are cool. I avoided meeting them on purpose.

[SkiCougar]

So are you saying now is the time to sell? Because there sure isnt any inventory out there. But sounds like there isnt many buyers either. My value only went up because they built some new houses and those all got snatched up. They havent built anything else back there and everything has leveled out when it comes to home values. They've sat idle the last couple months.

i 2nd live2ski.

peoples credit use is going up and wages are not and thats going to continue to price people out of buying houses as you qualify for a mortgage on debt to income now.

its not going to be a crash like 2008 but housing values will start declining in 12 - 18 months.

[cramer]

i 2nd live2ski.

peoples credit use is going up and wages are not and thats going to continue to price people out of buying houses as you qualify for a mortgage on debt to income now.

its not going to be a crash like 2008 but housing values will start declining in 12 - 18 months.

I think it depends on the location. I stand corrected about them not building. They are building more new homes behind me. I drove back there yesterday and was like woah, they building more. Wwe went over to brentwood, the town next to me, a bunch of new construction there. I don't think much will decline in my area for another 5 years. we are already 5 years into the decade cycle down here. Seems pretty normal for bay area. Especially if they building again. I think we are looking at a normal bay area market now. Higher prices homes, higher interest rates and only the richy rich will be upgrading. Which in the bay area, seems to be half the people here. If i get 200K above my value, i'm going to have to take a hard look at selling and just leaving the area all together. I never thought i'd say that, but fuck, thats a lot of money to pass up. I thought no way they'd go up to much over 300K, they are already selling at 300K now. My exact house minus granite, hardwood and cabinets just sold for 289K. To boot on a smaller lot. Im almost halfway there.

[Kevo]

I think it depends on the location. I stand corrected about them not building. They are building more new homes behind me. I drove back there yesterday and was like woah, they building more. Wwe went over to brentwood, the town next to me, a bunch of new construction there. I don't think much will decline in my area for another 5 years. we are already 5 years into the decade cycle down here. Seems pretty normal for bay area. Especially if they building again. I think we are looking at a normal bay area market now. Higher prices homes, higher interest rates and only the richy rich will be upgrading. Which in the bay area, seems to be half the people here. If i get 200K above my value, i'm going to have to take a hard look at selling and just leaving the area all together. I never thought i'd say that, but fuck, thats a lot of money to pass up. I thought no way they'd go up to much over 300K, they are already selling at 300K now. My exact house minus granite, hardwood and cabinets just sold for 289K. To boot on a smaller lot. Im almost halfway there.

You can buy a house for 300k in the bay area?

[cramer]

You can buy a house for 300k in the bay area?

not anymore.

[H0G]

Prices have cooled here in the Denver Metro area generally, but there are still some hot pockets. I have been getting emails from listing agents about price reductions on the homes I have shown lately.

Our HUD purchase has already become nightmare. We did a rapid rescore with our lender, who charged me for it btw, who then found out the bank wouldn't take the new score(70+ point difference). Had to move the whole file to a new bank and have paid for 2 possible 3 extensions on our purchase.

We are living out of a suitcase right now and have been for the past 2 weeks...

[4matic]

A Grinding Halt:

“Mortgage rates were little changed last week, but remain roughly one percentage point higher than they were three months ago,” says Mike Fratantoni, vice president of research and economics for the MBA. “Refinance application volume continues to decline, with the refinance index now more than 55 percent lower than its recent peak, reaching the lowest level in over two years".

[liv2ski]

“Refinance application volume continues to decline, with the refinance index now more than 55 percent lower than its recent peak, reaching the lowest level in over two years.

True dis, as my pipeline is going in the toilet. It will be interesting to see the October closed sales info (contracts done in July/August). I live in a pretty pricey area and have noticed a bunch of homes that have been listed, taken off the market and then relisted over the last 2 years went into escrow in July (pending on RE signs in the lawn). Looking at Zillow, our RE is back at the 2006 highs again If it was up to me, I would sell, take the money and buy a little place up in the mountains. Ms L2S has other ideas

[montanaskier]

We wanna sell and buy a new place with some things our current place is missing. However here in Vail, my place hasn't recovered enough for me to get from underneath mine in order to get a new place. By the time it has recovered enough, rates and prices will be higher. Oh well, so is life.

[4matic]

By the time it has recovered enough, rates and prices will be higher.

I don't see those variables adding up anytime soon. If rates continue to rise prices will quit rising and could easily fall. Unless, of course, there is a big increase in wages.

Foreign buying has slowed considerably too:

Foreign purchases of real estate in the U.S. dropped 17 percent in the 12 months ended in March compared with the same period a year ago, according to the National Association of Realtors. The high end of the market felt the brunt of it.

Sales of homes priced at $1 million or more to overseas buyers dropped to about 6.5 percent of sales from 10 percent—the sharpest drop in any price category.

There are several possible reasons for the slowdown. A stronger dollar makes U.S. real estate less attractive on a currency basis. The NAR said mortgage standards also tightened, making it harder for overseas buyers to qualify for loans.

But the main reason is economic weakness overseas. "Economic slowdowns in a number of major foreign economies appear to have been a major reason for a drop in sales; a number of potential customers apparently held off on purchases," the report said.

[Hugh Conway]

Unless, of course, there is a big increase in wages.

Fresno will freeze over first.

The "stronger dollar" reasoning is hilarious bullshit from the usual shills. Dollars weaker vs. Euro, not much changed vs. CAD and RMB

[liv2ski]

Yep, there is a lot going on that would indicate we hit a top in the May-July area. The hedge funds that were buying REO's sight unseen have backed off. Inventory pretty much everywhere is increasing. Mark to Market rules come back on line in 2015, so banks will need to sell the REO's they have been sitting on for years, rather than continue to slowly dole out their inventory. Rates are going up and wages continuing to stagnate. Any big changes will not happen overnight, but 2014 will be interesting for the economy and real estate.

After giving this a lot of thought, I would encourage young families to buy with the lowest down payment possible. Having a free and clear home before retirement is a very important goal to hit. Buying with as little cash down as possible is prudent in market tops, in the event values tank and you decide to do a strategic default.

[4matic]

The "stronger dollar" reasoning is hilarious bullshit from the usual shills. Dollars weaker vs. Euro, not much changed vs. CAD and RMB

Yes, Dollar index is the same as it was almost 25 years ago and has been sidewise for almost three decades.

[liv2ski]

Yes, Dollar index is the same as it was almost 25 years ago and has been sidewise for almost three decades.

No.....you always say that but looking at the USD/CAD chart over 10 years in 2004 one USD bought you 1.40 CAD. Now it gets you 1.03 CAD and has been as low as .93 cents CAD.

[MTT]

I did not read a bunch, 4 years ago I thought the Reno area market had dropped down to about where it should be. Now its up 34% in one year. The silliness just starts right back in.

The Crash investors (Wells Fargo)!! are now raking it in!
All the special exemptions on foclosue, keeping property more than a year. well now the slot machine is paying off

[liv2ski]

A few good charts for your consideration. I wish the purchase chart went further back.
http://www.mortgagenewsdaily.com/dat...lications.aspx

[4matic]

No.....you always say that but looking at the USD/CAD chart over 10 years in 2004 one USD bought you 1.40 CAD. Now it gets you 1.03 CAD and has been as low as .93 cents CAD.

Dollar index. Individual currency can be outlier. Other than the gulf war interruption its sidewise action since at least 1995:


http://ycharts.com/indices/%5EDXY/technical_chart#dataObject=type%3Aindex%2C%2Cid%3A ^DXY&overlays=type%3Asma%2C%2Cparams%3A50%2C%2C%2C type%3Asma%2C%2Cparams%3A200&indicators=type%3Arsi %2C%2Cparams%3A14&zoom=custom&startDate=8%2F1%2F19 89&endDate=8%2F2%2F2013&style=candlestick&periods= monthly&chartView=

[Hugh Conway]

Dollar index. Individual currency can be outlier. Other than the gulf war interruption its sidewise action since at least 1995:

I used those 3 because those 3 have been historically among the top purchasers. Similarly there hasn't been a really significant move for the rupee, ruble or real or the mexican peso At least not enough to matter to someone buying a $5 million apartment. The decline of the Argentine peso if anything would accelerate real estate purchases because the whole goal is to get your fucking money out of argentina.


If you are focusing on some longterm average for everything, that's kinda retahded. Back in 2000 when it the loonie was in the toilet canadians weren't so keen; now they are the biggest purchaser. Or were.

[13]

Seeing rates jump that fast, I am thanking my lucky stars I got 3 5/8% on the house when things were cheaper in May. PHEW.

[Danno]

Seeing rates jump that fast, I am thanking my lucky stars I got 3 5/8% on the house when things were cheaper in May. PHEW.

3 5/8ths is great, but keeping things in perspective, rates are still super low historically speaking.