Housing Decline (Denver: home, buy, calculator)

[MaddieClaire]

Originally Posted by Studiobill

A short sale is a sale where the bank has agreed to accept less than what is owed on loan. An REO (Real Estate Owned) means the bank has taken over the house. Used to be an REO might still be near market value, but have when things slow down they drop price to get out of the house.
Problem with REO's is while price might be lower, fico and down payment requirements are much higher which most buyers may not qualify for.
Realtors are doing a disservice to their clients buy dropping prices to compete against REO's.
A market price home may be easier to qualify for than the REO.

Thank you for the explaination.
I guess it's still hard for me to believe how people went absolutely nuts during the housing boom... that couples making less that 100k per year were buying homes appraised at 500k. Anyone that knows anything about math at all knows that it's simply not feasible.
True Example: married couple, 2 kids in college, auto payments (and other living expenses). This particular couple blamed the mortgage company for their problem (their house was foreclosed on), and now they want the government to bail them out. Just plain stupid.
Anyway, if people would have stuck to their budget and bought a home within their financial means this housing bust wouldn't be happening.
When the interest rates dropped the housing prices skyrocketed - and people were rushing out buying these expensive (overpriced) homes and condos, paying more than the house was worth and using funky financing to buy top dollar homes (out of their financial means).
Sure, people got a lower interest rate, but they were more than making up for that lower interest rate by paying nearly double for the house. The people that bought early were the only ones that did well.
As I said before, just plain stupid.
Thats my rant for the day.

[CosmicWizard]

Mike from back east wrote:

must be 60 years of experience and observation. If only I could be 21 again, know what I know NOW, and with my current finances, oh what a time I'd have....

Wouldn't that be great! I've had the same thought many times myself.

blessings....Franco

[LAAFTERHOURS]

A few thoughts from a San Diego Renter. My wife and I lived in Wash DC Metro and sold our SFH in march of 2006 to move back to San Diego. We rented for a year, got pregnant and my wife was pushing to buy. Im glad we didnt as all of the properties we looked at have dumped about 100K in 9 months time. We decided to rent in one of the neighborhoods we looked at. 43 total homes and a revolving door of 10 homes on the market at a time. We tossed the money from our home into a cd and now into an index savings account - and since march have made 8k in appreciation.

We are now looking at Denver for a few reasons. San Diego is our home at heart but its not economically feasible for us to live well here and have the best for our kids. We both love Denver, the mountains and im a big snowboarder. Plus is a lot of work for what I do in IT/ SAP/ Process consulting so it makes a lot of sense. Luckily we will have 20% down up to 500K home so we will lock in a 30yr and not look back. We can safely buy a home and not worry so much about the market since its a long term plan. Thank you to all of you on this board because you are helping us research areas. I personally dont want rentals in my neighborhood, nor a foresale sign every other home.

In regards to the market situation in Denver, foreclosures impact the entire market and im sure selective areas will be spared but as its evident that its happening everywhere in this country at the moment, even the upscale high end areas are getting hit. Every builder is reporting a loss and all of them have reported a negative outlook for the next 12-18 months. As for the people living in neighborhoods with foreclosures, I read that its a 6 month process there. Couple that with all the resets for anyone that bought a 1, 2, 3, 5 year int only or arm in say 2005, 2006 or even this year, you are staring down a lot of resets. As these banks get more propeties on their books and have to fight another bank on the same block to unload their REO faster than the one across the street, there will be price cuts.

You can listen to your realtor or builder or you can read the news. Its in every paper. There is a reason that the news is the news, they focus on people in the industry that have an enterprise view, not just what they think they see locally. Check out The Housing Bubble Blog - they pull in real estate news from every paper in the country. Not a lot of news for denver but paints a great picture.

[dj32]

I just read a great article about Denver- It mentioned a stat about Denver being #1 in country for stability of home values... hopefully I'm working that correctly. I really, really wish we would see more of that good news versus the gloom and doom in the paper.
The article aso talked about a glut of homes in the 100k range (foreclosures I'm sure falling here) and a 6 MONTH supply in the 700-1M++ range. THAT is what I worry about. Builders are building a TON of high end homes in my hood and I'm seeing alot of them sitting. I feel like the smaller ones are going to take a bath before it's all said and done.

[hello-world]

Originally Posted by dj32

I just read a great article about Denver- It mentioned a stat about Denver being #1 in country for stability of home values... hopefully I'm working that correctly. I really, really wish we would see more of that good news versus the gloom and doom in the paper.
The article aso talked about a glut of homes in the 100k range (foreclosures I'm sure falling here) and a 6 MONTH supply in the 700-1M++ range. THAT is what I worry about. Builders are building a TON of high end homes in my hood and I'm seeing alot of them sitting. I feel like the smaller ones are going to take a bath before it's all said and done.

i see a few $250k-$500k 1-3 br homes in a "hot" denver neighborhood just sitting for sale....for many many months (6, e.g.). and i also see on trulia.com and zillow.com that prices have been sliding (quite significantly in several cases, especially considering inflation) in several "hot" neighborhoods in denver for the past several months. where did you read this article? (denverpost?)

[formercalifornian]

Anybody notice a rise in the number of SFH's being offered as rentals after failing to sell? It appears to be the case in my neighborhood.

[LAAFTERHOURS]

Originally Posted by formercalifornian

Anybody notice a rise in the number of SFH's being offered as rentals after failing to sell? It appears to be the case in my neighborhood.

Clear sign that sellers who cant sell and are facing foreclosure are looking at last resorts.. I wanted to edit to say that I am not trying to make Denver market sound worse than it is, but most people dont look at the big picture and we are living it in socal. It took a lot of people a long time to accept the market conditions out here, and a lot of times it was too late.

[dj32]

rocky mountain news and a real estate journal... again, neighborhood specific. I'll try and find the link.

[Huckleberry3911948]

Originally Posted by GreasedLightning

We're moving to Colorado in December and will be purchasing a condominium. As we all know, the housing market is come to a screeching halt and Shiller's housing trend graph projects a declining national housing market until 2011, where the market will finally reach an equilibrium. If we were to purchase a small, 2 or 1 bedroom condo in one of the suburbs of Denver, will we see a drastic depreciation over the next few years or is Denver a pretty stable housing market?

id wait 6 months. rent 1st.

[LAAFTERHOURS]

Article on cnn.money - speaks to market correction

Real estate: Buy, sell, or hold? - Nov. 7, 2007

Link to table spelling out Price to Rent ratios for many markets including Denver. Also a five year projection based on rent vs price Housing Woes - Fortune Magazine