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The uncertainy about where the market is going in regards to pricing. Unrealistic sellers and their pricing who are trying to compete with having to use only foreclosures and short sales as comps because nothing else is selling in their neighborhood. Bank appraisals coming back from the banks that don't match the selling prices asked by the sellers so the deal falls through. Short sales through banks that take FOREVER and fall through. People owing more money than they can sell their home for and are stuck. They can't sell their homes for what it is worth now ( today ) even if they wanted too without bringing a lot of money to the table at closing. The list goes on and on. Hope that helps Chuck and you might want to wipe the soda off of your screen MikeyKid
If either one of you have tried buying a home in this price range than please speak up because I would love to hear your enlightened wisdom when homes have been falling over 500K within the year that I have been looking.
Last edited by mmoorecharlotte; 01-14-2010 at 02:42 PM..
The uncertainy about where the market is going in regards to pricing.....
The uncertainty is with the acceptance that prices are going down. They are going to go down with one caveat which I will add below. This reluctant acceptance comes from the pretty large industry that was created here in the buying, selling, financing, and construction of houses. Rising prices meant profits for everyone but it pushed home prices well beyond what incomes can handle here and now they have to retrench. Median homeprices simply can't rise faster than median home income but for the last decade this has been the case. The falling price are now unravelling this mess and it's tough for people involved with it to accept it.
The one exception is this. It's obvious the Obama Administration, the US Treasury, The Fed, and the also quietly the congress, is going to try and fix the economy simply by printing money, lots of money. This has worked in the past because when they do this, it transfers wealth from anyone with savings back to the federal government. The mechanism that people will see is their dollar purchases less. There is a rumor floating around the internet they may even go a step further and force people with 401Ks and IRAs to convert part or all of these accounts to Treasury backed annuities.
So with this idea in mind, if they can destroy the currency enough the asset devaluation, in theory, will reverse and house prices will rise. (Along with everything else.) I say in theory because this kind of thing only works if people are gainfully employed and their employers are rasing salaries to compensate for the falling dollar.
So your not in the camp that believes interest rates will begin rising after the Fed stops buying mortgage backed securites this spring which could in turn cause a decrease in home prices? Inflation?
Also, what happens to prices of homes when these foreclosures keep coming onto the market? Shadow inventory? Wouldn't it have to supress prices further down?
What is going to happen after the tax credit disappears this spring if the job outlook hasn't improved?
The RE bubble/mess started these problems...mostly everyone was fat and happy in the last decade up until 05-06....when housing started unraveling in the metro areas around the country (NJ/NY/FL/CA/LV...etc), it became a domino for these other problems in the economy. Our specific area felt the effects when people in those large markets couldn't sell their homes and buy cheaper down here.....many tried to float two mortgages for awhile, but w/no job prospects here, they had to lose the home...that's why RE around here became distressed.....
Economists and people much smarter than me tell me every day that the recession is over.
Oh really?
Well, to me its still extremely bad out there. Banks are NOT lending..they are holding onto their money. Why should they when they get an interest free loan from govco (fed funds rate)...why risk it w/"risky" loans??? I don't understand this...
Also, we are NOT creating jobs...jobs are still going away although at a much slower pace. There is no job CREATION which will be the 1st sign for things to get better IMO...
I will not say anything on how this administration is doing because I don't want to turn this political.....
...
So your not in the camp that believes interest rates will begin rising after the Fed stops buying mortgage backed securites this spring which could in turn cause a decrease in home prices? Inflation?
Also, what happens to prices of homes when these foreclosures keep coming onto the market? Shadow inventory? Wouldn't it have to supress prices further down?
What is going to happen after the tax credit disappears this spring if the job outlook hasn't improved?
Answers to your questions:
I don't know what is going to happen with interest rates. The best thing they could absolutely do is raise rates to about 10%-12% and leave them there for a decade or so. In this age of where people feel entitled to unlimited credit it will never happen. It's obvious they want them to stay zero but this has very negative consequences. It's like packing more explosives in bomb but making the trigger just a little slower. Their trick is to keep them where Obama will get elected for a 2nd term, then it becomes the next president's problem. (if we still have an economy left)
House prices are going down, no doubt about that. On the high end people can't even afford to heat them. On the low end the homes are junk and nobody wants them. The middle will go down too, but how much depends upon the state of the middle class. This excepts the really rich who will always be really rich (they are still profiting from this mess).
House sales stop again. Never underestimate the number of fools willing to rush in where wise men are afraid to go. When the tax credit stops, the door slams shut on the fool express. Interestingly enough, most don't realize if they take one of these things, they have to pay it back or book it as income if they move within 3 years for any reason.
I will not say anything on how this administration is doing because I don't want to turn this political.....
What can you say about the administration except that they are maintaining the status quo. All of Obama's economic advisors have all come directly from that same pool of wall street people who caused such a mess in the first place. The people currently shaping national economic policy are the same players who were doing it in the last administration.
Quote:
Originally Posted by anifani821
...that 85% (or maybe more) of the folks who live here ARE employed.
That means there are plenty of homeowners who are not in financial trouble, may have even paid down tremendously on expensive homes, and so are having no problem maintaining lifestyle, paying bills and putting money away in 401Ks and savings.
QFT: Quoted for truth.
Yes - it is rough out there, but you are right on the mark Ani. A lot of people are gainfully employed, have stable jobs, and are doing just fine financially. Yes, maybe their home would lose money if they were to sell it today. But if they are paying the bills and have no plans to move anytime soon, they will be able to ride it out and will be fine.
On the employment issue, keep in mind they are not counting a lot of people. In this past unemployment count of lost 85,000 jobs, what was missed by this, is they also completely removed 660,000 people from the numbers being counted even though they don't have a job. This has the effect of keeping the percentage from changing. They have been doing this for a long time. Looked at a different way, the country has the same number employed, numerically, that was employed in 2000, but the employment base has grown by 27,000,000 people due to population growth.
I have heard there are now 68,000,000 people who want to work a full time job that can't get the work and a good portion of these are no longer counted in statistics. This is a country that only has about 310M, so when you subtract out the young, students, retired, and disabled this is a pretty big number. A much bigger number than the 10% to 15% being indicated.
...I have heard there are now 68,000,000 people who want to work a full time job that can't get the work...
I'm not even going to try to pretend that I can 100% comprehend (more like, I don't want to) statistics in detail. Sure, I took stats in college and use basic stats skills frequently, but when it comes to finding ways to contort the data to how one wants it to look, I bow out. They become worthless numbers to me at that point. It's like the observation that something could have a 1% chance of happening (which we all agree is low), but when it happens to you, it's 100%! Kind of nullifies any meaning to that previous 1%.
All that said, this claim that 68M people are jobless and/or without a "real" full-time job is absurd. I'm not knocking you Lumbollo (as long as we're not talking about light rail ) as you said you heard this data. I'm just calling malarkey on it from the simple observation that I don't see it with my own eyes. While I'm certainly not everywhere at all times, I'm relatively plugged in via friends and family across the country and frequenting a few active forums such as this one. In other words, I feel that I have a pretty good smaple base, especially when trying to detect a number as large as 68M people. Now if I sit back and think real hard (watch your monitors flicker, don't be alarmed), I actually know of no one that can't find a job. I know of one single person who doesn't have a job (who would be deemed as "supposed to have one" by his age and living status) and says he can't get one, but it's a widely known fact that he's a lazy somebody and is known for walking off of a new job on the first day.
But back to the 68M jobless claim, that's staggering. Even is we dumb it down, factor out some inherent BS'ing of that number--say by 50%--34M people unemployed. That's about 1 in 9 people of ALL the population of the US. This is where that number fails. I'm no social butterfly, but I do have more than 9 friends and family members. In fact, Facebook tells me I have over 130 (yes, I'm being facetious here), so I should known at least 14.4 people who are either unemployed or are looking/needing full-time employment. Not so.
To take all this a stretch further, by my experiences, unemployment is pretty darn low. Now granted, there is not the flexibility to walk in and tell your boss to shove it and you pick up another job before you even get to your car in the parking lot (like there was for the past 5-10--I did it, twice), but there are jobs. My brother-in-law recently moved up here to work for Shutterfly near the airport...says they're always looking for people, part time and full. I could give a few other reports of job openings too. My point is though, I think people are confusing being able to find any job they want with being able to find a job period.
You say I am wrong because I "heard" it, and your argument against that is "your experience". OK I would say they are equivalent as I have not offered up proof, so here you go. Please check this table. It is worse than what I heard.
http://www.bls.gov/cps/cpsaat1.pdf (broken link)
It shows that:
145,362,000 working using an extremely loose definition that includes anyone that worked at least 1/hour week or who didn't make any money working in some sort of family business.
8,924,000 classified as unemployed using a very strict definition that throws almost everyone who wants a job out of being counted.
79,501,000 people who are unemployed but who have given up looking for a job for numerous reasons. The BLS removes these people from the unemployed numbers just as they removed another 660,000 last month.
These are 2008 numbers on this chart. No doubt 2009 is much much worse. There is also a little caveat they throw in the fine print. You can't compare the data from this year to previous years. (because they keep changing the methodology) I recommend that you look into this information before taking what the government says at face value.
What I'm saying is that I don't see it. These numbers tell me nothing when I don't see hoards of people walking the streets, jobless. I'm not ignorant enough to think that no one is unemployed (as I know a few are on these very forums). But I'm not naive enough to believe the propaganda thrown around by all political sides and others with agendas that they want pushed for a slew of reasons.
As with any skill, profession, or past time, there's always something to be said for being able to step back from the equations, numbers, and graphs and just put your ear to the ground to get a feel for what's going on. There are too many people/companies that stand to benefit from continual doom and gloom reports...too much money to be made/stolen. The longer this thing can be dragged out, the more profit someone is making, somewhere. Sound like a conspiracy? Sure, I'll admit that. But when I look around and don't see the smoke that some folks are saying is choking us, I have to think for myself and say that maybe it's not as bad as we're being told. Maybe we're all a little too vulnerable right now because we see things that might represent "bad times" (again, not being to jump ship willy nilly when your current job isn't fun anymore...worse, businesses using these "times" as an excuse to make things crappy for employees). But things aren't always what they seem.
When I start seeing people out of work, bread lines forming, business truly slumping at retail locations (not just missing their inflated expected income levels for the quarter), then I might think there could be something real going on. For now, it's all smoke and mirrors...and I'm truly sorry for those who've been a victim of it (i.e. lost a job or business).
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) as you said you heard this data. I'm just calling malarkey on it from the simple observation that I don't see it with my own eyes. While I'm certainly not everywhere at all times, I'm relatively plugged in via friends and family across the country and frequenting a few active forums such as this one. In other words, I feel that I have a pretty good smaple base, especially when trying to detect a number as large as 68M people. Now if I sit back and think real hard (watch your monitors flicker, don't be alarmed), I actually know of no one that can't find a job. I know of one single person who doesn't have a job (who would be deemed as "supposed to have one" by his age and living status) and says he can't get one, but it's a widely known fact that he's a lazy somebody and is known for walking off of a new job on the first day.
