I would _really_ like a good reason to not worry about this. anyone?
jesus. housing market truly fucked.
I would _really_ like a good reason to not worry about this. anyone?
I'm not listening...
Sorry, too tired of intellectual stuff after the thread about Bush and Nero.
Be very afraid.
"Cranks like myself were saying it all along but born-and-bred dupes kept on believing the self-serving E-Con-Whores employed by the industry. "
Jas Jain, Ph.D.
the Prophet of Doom and Gloom
There are about 15,000 people moving into my county in the next five years (in addition to normal migration). I'm hoping that carries it at least five more months...
Hey, in NZ or whever you are, shouldn't they display bar charts descending from an axis rather rising from it?
It seems consistent.
Here's 2 reasons:
1) Your home is a long-term investment. Unless you must sell soon, you don't need to worry.
2) Your home is a long-term investment. Even if you sell soon, you don't have any long-term problem. The housing is depressed across the entire country. If you had to sell your home today at a $20,000 loss, for example, in a cheap market, or $75,000 loss in an expensive market, you'd be able to work something out, assuming your credit is good, to roll that into your next mortgage. Since you will be buying that house at a (presumably) equally depressed value, you can expect it to rise in the near to mid term to a level that will cover the negative equity you had to roll into your new loan.
And if you have enough equity in your existing loan to cover your loss, you wouldn't even have the worry of moving it forward into your new mortgage.
> Hey, in NZ or whever you are, shouldn't they display bar charts descending from an axis rather rising from it?
They are already upside down, so the bar chart is the right way up(down).
Good thing I plan to live in my house forever.
It's going to be very satisfying watching many of the McMansions around here go up for sale for a pittance.
September 7th, 2006 7:58am
Really? Why? You enjoy misery in general, or just when families that are somewhat better off than you suffer?
I love it when stuck up snots who move into houses as big as their lots in my town and then decide they can start bitching about the way things have been for 50 years (such as the neary Trumbull playground having a harmless species of bee living in the ground) are forced out of my community by their own stupidity.
It's not misery I love, it's the very specific misery of people who spend their lives making everybody else miserable.
September 7th, 2006 8:02am
It's not possible that you're annoyed by a vocal subset of the people that have moved back there, and the rest are nice folk who bought a nice place to raise their family?
If your idea of a "nice place to raise your family" is a plastic 4,500 square foot house on a 4,800 square foot lot, then you deserve what you get.
September 7th, 2006 8:23am
"the very specific misery of people who spend their lives making everybody else miserable."
You know what?
September 7th, 2006 8:56am
If I make you miserable, it's only because you're complicit in it. I'm nowhere near you. If my words alone can make you miserable, then you have peripheral issues to deal with.
September 7th, 2006 9:03am
If you bought at the top and you are maxxed out then this is most unwelcome. Ditto if it's an investment property (haha). Otherwise your exposure is neutral (we own the house) or postive (you don't own, and you'd like to).
Plus, there may be downward pressure on rental rates.
Had to happen, IMHO. Better a deflation than a crash.
We bought somewhat high, and we're stretched, but our rate is fixed and our income SHOULD increase.
We might not get the equity loan relief we were hoping for in a year or two, but we'll survive regardless.
September 7th, 2006 9:21am
1. Don't buy a freshly built house right now.
2. We're borrowing 300 billion a year from China. Inflation is inevitable, at some point. So if you plan to own your home 10 years or more, at some point you WILL have equity in it.
3. #2 assumes you don't 'cash out' your equity with an equity loan, of course.
So don't worry, be happy.
You bought with almost no money down, is your problem. (And the problem with the system, I suppose.)
When you have to come up with a quarter or a third of the cost up front, most likely by selling off another piece of family property, you think long and hard and calculate everything before you sign the papers.
September 7th, 2006 9:37am
Thank God there's a system in place that allows me to buy with nearly nothing down, or else I'd still be in an apartment and my old family home would belong to yet another dickhead.
So hey, make all the sanctimonious commentary you like. I'm comfortable with the way things played out in the end and I'm doing fine.
September 7th, 2006 9:38am
If you're hoping for an increase in income to be able to afford your mortgage, you're not fine.
September 7th, 2006 9:51am
I should have mentioned the hit it's going to make on boomers' exit strategy. Their house can represent their entire wealth.
Part of the Oz south-eastern seaboard's flatlining comes from our govt opening the door to big one-time tax savings if you drop buckets of money into superannuation funds. So the investment money's drying up.
West Coast and Queensland are going gangbusters economically and housing prices are going through the roof.
I'm hoping for an increase in income to be able to live a little more comfortably and have a steak twice a week instead of once. I'm affording things fine.
September 7th, 2006 9:54am
I've seen the McMansions selling for a pittance. We have a few of them here. We've also got some of the real deal that are sitting on the market for excessive amounts of time. It means that if I got a real job in an area that wasn't economically depressed I'd be stuck with this house for years. I have a friend in that very situation, stuck with a house that won't sell because there are no jobs in the area.
That said, there are some very cool properties in town that will be coming onto the market soon, or are on the market now. We toured one last weekend that would be awesome to own, being in town in a good neighborhood and walking distance to everything.
September 7th, 2006 10:13am
One scenario to consider is that houses are priced correctly.
1) Consumer products are over abundant due to international trade, therefore below historical costs
2) Labor is abundant due to unchecked immigration, therefore below historical costs
3) Precious metals (gold and silver) about doubled in price during the last 3 years.
4) Crude Oil has gone up 50% during the last few years
It could be that we are seeing inflation right now, its just that the rest of the economy is skewed.
++flash91, except for points 1 and 2, which are largely irrelevant. Immigrant labor is NOT "unchecked", there's LOTS of "checks".
No, the housing boom was created through low interest rates making it affordable for people to 'roll' their equity in one house into a much larger house.
The low interest rates in turn came out of the Clinton years of balancing the budget -- when the Federal Government doesn't have to issue more T-Bills to finance their activities, the interest they pay on any new T-Bills they DO issue can drop. And they can repurchase the T-Bills issued in the past with the highest interest rates, which lowers their interest payments.
This situation has now been dramatically reversed. The last 6 years of deficit spending has FINALLY resulted in the Federal Reserve Bank having to raise interest rates (the ones they charge banks to borrow money from the Fed) to prevent inflation. Now that the rates are over 6%, "cheap housing loans" are a thing of the past, and this is preventing people from buying new houses.
Thus, the end of the boom. Also, any speculative prices based on continued low interest rates have now dropped a little.
++flash91. Inflation will only come when white-collar workers grow a pair. Stuff like construction costs on new housing and farm/meat-processng work has been depressed for years because of porous immigration policies.
"++flash91, except for points 1 and 2, which are largely irrelevant. Immigrant labor is NOT "unchecked", there's LOTS of "checks". "
In Seattle you can't even ask about legal status (cops get dismissed immediately for it)
Unchecked is an exageration, but if immigration law isn't enforced, does it really matter?
Apropos of nothing, but Why is it so hard to take People seriously who have the Habit of Randomly inserting capital Letters where they don't Belong? The guy who Wrote the Article in question, I Mean.
September 7th, 2006 11:49am
There's A Guy On One Of The Discussion Lists I Post On Who Capitalizes Every Single Fucking Word. I Don't Know If It's OCD, Or Autism, Or What, But It Drives Me Fucking Crazy To Read His Posts, So I Don't Anymore.
September 7th, 2006 11:50am
>Stuff like construction costs on new housing....
Copper and lumber have skyrocketed in the last 2 years. One friend cannot get copper wiring for his basement expansion at any price, partly due to the excessive amounts of copper that our army has been delivering in Iraq - in the form of metal jacketed bullets. The supply shops that supply contractors just aren't selling copper in those gages.
Here in Denver, there are neighborhoods where the cost to hook a new house up to the water system runs close to $25k. And that is the cost it takes for the water district to purchase new water supplies for the new home.
I agree with you that labor costs in housing construction have plumetted due to the illegal immigration problem. The major contractors have put the screws to the subs so hard that the subs are stuck having to pay like $6-8 for wetbacks just to make ends meet.
Right now is an ecellent time to shop for a rental. In a few months, as the bankruptcies and foreclosures hit, the rental market will get very tight. When the bank owns the property, no one lives there, so all those REO will be sitting vacant.
I agree with you, Peter, that construction material costs have risen. But that's mostly in the last 6-12 months (hurricane katrina didn't help). Anyway housing starts have flattened as graph shows.
I also agree that the rental market has been awesome for renter's (if i could sign a 3-year residential lease today, I'd do it). And that it's gonna inflate.
Precious metals have appreciated because precious metals always appreciate when currency tanks, like the US dollar has.
It's a give and take. Like the bond market vs. the stock market.
On balance it doesn't mean anything execpt people are looking to divest their dollars for something a little more stable in the short term.