I said it was going to happen
08-31-2006, 07:45 PM
#11
I'm going to hate myself in the morning for saying this, but . . .
You can thank the management of the economy by Greenspan for our relative lack of boom/bust cycles and the resultant eveness of the housing market.
Who knows how the "new guy" will do.
An interesting point to ponder. As the housing market goes so goes the rest of the economy. So if you could pick up a 1.3M house for $350k would you have the income to be able to afford to do that in that economy?
You can thank the management of the economy by Greenspan for our relative lack of boom/bust cycles and the resultant eveness of the housing market.
Who knows how the "new guy" will do.
An interesting point to ponder. As the housing market goes so goes the rest of the economy. So if you could pick up a 1.3M house for $350k would you have the income to be able to afford to do that in that economy?
08-31-2006, 08:45 PM
#14
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See the thing is the Federal Reserve won't let a collapse happen. Everytime it looks like the market will stall, measures are taken. After 17 straight increases, the Fed held rates steady this past meeting. Also, as things get tighter, lenders create new financing options to keep the party going. A few years back it was interest-only loans. Then it was 40-year terms. Now they are starting to roll out 50-year terms. Banks will do whatever is necessary to avoid mass foreclosures. Everyone sitting around hoping to pick up homes for dirt cheap is going to be waiting a very long time.
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08-31-2006, 10:16 PM
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Originally Posted by Wildncrazy,Aug 31 2006, 09:45 PM
An interesting point to ponder. As the housing market goes so goes the rest of the economy. So if you could pick up a 1.3M house for $350k would you have the income to be able to afford to do that in that economy?
Ten years ago, my brother purchased a small house in a small town for ~$40K. Four years ago, he sold it for ~$80K. It was in worse shape, there weren't any more people in town looking for a place to live, and the the largest and highest-paying employer in town had shut the doors. But there were significantly more people able to borrow $100K that previously had only been able to afford $40K. The house clearly hadn't increased in value in any way, but the price people could afford had risen significantly.
08-31-2006, 10:38 PM
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I'm now just begining to understand why median incomes and median house prices weren't adding up.
I'm a total n00b when it comes to housing and bubbles and anything math related, but common sense has been telling me that the state of housing has been crazy nuts and seems to be cooling down.
Houses in my area have been just sitting there, a year ago they would have been snatched up like nothing. I would think to myself, who's buying these properties and how are they qualifing for the loans? It just didn't add up. But now that I kinda understand how banks work, through 30-40 ARmortgages and interest only loans, it makes a lot more sense to me.
I think the prices will go down a bit more. I still won't be able to afford a house in a while here in Cali, but at least it looks more promising than it did a couple of years ago.
I'm a total n00b when it comes to housing and bubbles and anything math related, but common sense has been telling me that the state of housing has been crazy nuts and seems to be cooling down.
Houses in my area have been just sitting there, a year ago they would have been snatched up like nothing. I would think to myself, who's buying these properties and how are they qualifing for the loans? It just didn't add up. But now that I kinda understand how banks work, through 30-40 ARmortgages and interest only loans, it makes a lot more sense to me.
I think the prices will go down a bit more. I still won't be able to afford a house in a while here in Cali, but at least it looks more promising than it did a couple of years ago.
08-31-2006, 11:04 PM
#19
Originally Posted by IheartS2ks,Sep 1 2006, 12:38 AM
But now that I kinda understand how banks work, through 30-40 ARmortgages and interest only loans, it makes a lot more sense to me.
Don't know why the 2 markets differ so much but they do.
ARMS and Interest Only loans will both help the foreclosure rate - go up.
Unless your property values are appreciating pretty good, there are some downsides that a lot of people can't overcome.
And if the economy really does do a downturn in your area you can end up upside down or not being able to afford the new house payments when the ARM adjusts.
There is no magic BEST mortgage type. The best type depends upon your own personal situation, but apparently in my neck of the woods most people think15-30 year loans are the best type, but than we don't have Cali type pricing either!
You can still get a lot of home for $300,000 here. In Cali $300,000 gets you what amounts to an old, old starter home from our area. A house that most people wouldn't buy to live in.
I used $300,000 because my daughter was just looking at homes in L.A. I don't know who was more shocked, her or me.
08-31-2006, 11:12 PM
#20
I'm just wondering, where do you guys find information about these foreclosure properties?? I will be graduating this spring and looking for a home to buy; doesnt have to be nice, just structurally sound and cheap.