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Old 01-07-2009, 12:41 PM
 
Location: Martinsville, NJ
6,160 posts, read 10,936,527 times
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Quote:
Originally Posted by sheri257 View Post
Ok but ... the Alt-A loans are supposed to get a lot worse this year, right?

If the area where I want to buy isn't getting worse then, I can't count on huge price drops, right?
I'm not going to claim any knowledge of yru area, or any ability to predict what will happen to prices in your area. Many things, not just Alt A foreclosures & resets, will impact prices for houses. How's the local economy? Are companies closing up, raising unemployment? Are local taxes being increased, making people prefer other areas? Is it a historically desired area?
So many questions..
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Old 01-07-2009, 12:50 PM
 
Location: Kansas
3,855 posts, read 11,494,329 times
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As Mr Keegan is implying above: Real Estate is local.

Now may be the best time to buy for some....maybe not for others.
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Old 01-07-2009, 12:58 PM
 
Location: Los Angeles Area
3,306 posts, read 3,338,520 times
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Quote:
Originally Posted by sheri257 View Post
I'm not banking on prices getting much lower after 2011.
Nationally I would suspect the numbers to start to stabilize around 2011, but some areas may continue to decline past 2011. There is a good choice California declines past 2011, there are just too many problems in the state that aren't going to be resolved any time soon.


Quote:
Originally Posted by sheenie2000 View Post
Some areas though didn't peak until 2007 even up until Jan 2008.

Charlotte and MD were like that.
Sure, but Charlotte never saw the sort of appreciation you saw in other markets. It seems that Charlotte may be inflated by around 15%~20% from today's prices but the area has grown a lot so its hard to say if its inflated at all. Regardless, I would be surprised if it continued to decline past 2010.
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Old 01-07-2009, 01:14 PM
 
Location: Chino, CA
1,458 posts, read 2,904,774 times
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Quote:
Originally Posted by Humanoid View Post
Most people in bubble areas yes, but not necessarily in other areas. I don't think the people that purchased in say Texas a few years ago with decent down payments with amortizing loans have much to worry about in terms of being underwater after 7~8 years of ownership.
There were many bubble areas... and most of them were concentrated near major metro areas. If you look at the Schiller index, more than just California bubbled over the years. Some like Seattle and Portland look like late bloomers.


Case-Schiller Home Price Index: Still No Good Housing News - Seeking Alpha

If you look at the Fed 6 month change in the number of Alt-A loans to reset in the next 12 months... Texas is among the many other States that are in the Red (meaning more Alt-A resets forecasted). North Dakota, Wyoming, Nebraska, Pennsylvania, Wisconsin are among the "green" (improving) States that have fewer Alt-A resets forecasted for the next 12 months. So, essentially, the populace States will have to continue to weather the storm.
http://www.newyorkfed.org/mortgagemaps/

We're in for a lot of hurt... and if a little over half of the Country are home "owners" (~65%)... then a lot of people will be under water or facing declining home values even if they've held the property since 2000.

Anyhow... the market landscape has changed, and those that wanted or wants a home are the ones that got/gets shafted. Kinda suxs how much time is going to be wasted/lost. Renters, businesses, governments, world economies are all collateral damages when a good ~65% of the populace tightens belts.

-chuck22b
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Old 01-07-2009, 01:15 PM
 
28,394 posts, read 68,260,079 times
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I agree it has some lovely pictures. The property has some negatives beyond the taxes. It is right on Green Bay Rd, a pretty heavily traveled street. Further, it appear that and E-W cross street, Great Elm Ln, terminate right in front of this home.

Lot size is listed as .29 acres 80x155, which ought to be buildable, but as a corner lot (Glenco Ave is directly north) there may be some restrictions and /or irregular shape. The drive is oddly configured as well, coming from the north of the property all the way across what should be the front lawn and terminating in a one car garage. Appears there is ZERO true back yard, the outside space is all a (fenced) side yard.

Listing does not make clear, but I believe there is NO main floor lavatory, only a master upstairs with a full+ bath in basement. Retrofitted space pack A/C can be a negative, as are raditors for heat.

Kitchen is nothing special, and basement laubdry room is not going to please buyers.

All-in-all not a a bad value at the listed price, but certainly not the SCREAMING bargain that too many folks are waiting for -- certainly any family could make be very happy here, but in current economic conditions this home may be expensive to own / maintian, difficult to ever expand, not desirable as a teardown and still a bit of risk.

On the plus side, it is in an area that will always have many other homes that are FAR more expensive, may retain its value / appreciate over a long period and should prove quite comfortable for a family of five or more. Schools are well rated, Highland Park High School: Best High Schools - USNews.com (http://www.usnews.com/listings/high-schools/illinois/highland_park_high_school - broken link) http://www.suntimes.com/images/cds/pdf/top50mid-2008.pdf (broken link)

All depends on what you want / need and your tolerance for risk...
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Old 01-07-2009, 01:34 PM
 
Location: Los Angeles Area
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Quote:
Originally Posted by chuck22b View Post
There were many bubble areas... and most of them were concentrated near major metro areas. If you look at the Schiller index, more than just California bubbled over the years.
I never said it was just California, I said "bubble areas". I consider those to be the areas that went above 200 on the graph you posted. The ones that were between 150~200 were overly inflated but not at levels not seen in the past. The ones that stayed below 150 had no bubble.


Quote:
Originally Posted by chuck22b View Post
If you look at the Fed 6 month change in the number of Alt-A loans to reset in the next 12 months...
"Alt-A" is not necessarily a problem especially now that interest rates are down. It is the pay option ARMS/IO ARMS that are going to cause the most problems and these weren't used much outside of the bubble areas. California of course having the highest concentration.

Quote:
Originally Posted by chuck22b View Post
We're in for a lot of hurt... and if a little over half of the Country are home "owners" (~65%)... then a lot of people will be under water or facing declining home values even if they've held the property since 2000.
In bubble areas yes. But 30% of home owners have no mortgage. Having declining values isn't really an issue, real estate generally depreciations in real terms. So this is the norm, what is abnormal is when real estate appreciates at or above inflation.

But yeah, a lot of people will be under water. I guess this will be a rather painful lesson in debt management?


Quote:
Originally Posted by chuck22b View Post
Anyhow... the market landscape has changed, and those that wanted or wants a home are the ones that got/gets shafted. Kinda suxs how much time is going to be wasted/lost.
I would like to get a house sooner or later and I don't feel "shafted", I also don't think time is being "wasted/lost" because god forbid I have to rent something right now. I am likely to move out of California though as I feel a bit uneasy about buying here because the state could become a wasteland, economically speaking.
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Old 01-07-2009, 02:32 PM
 
Location: Chino, CA
1,458 posts, read 2,904,774 times
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Quote:
Originally Posted by Humanoid View Post
"Alt-A" is not necessarily a problem especially now that interest rates are down. It is the pay option ARMS/IO ARMS that are going to cause the most problems and these weren't used much outside of the bubble areas. California of course having the highest concentration.
Thanks Humanoid for the explanation... I think businessweek had a map of the Option ARMs concentrations titled "Map or Misery":


Map of Misery

Also, like you were saying in an earlier post... many of the Option ARMs are recasting earlier than forecasted because of the drop in values. This essentially would shift a lot of the potential defaults closer into this year - 2009/2010 versus the regular schedule which shows more in 2011/2012.


Stage Two of the Mortgage Collapse: $500 Billion in Pay Option ARMs Meet the Piper in 2008 with 60 Percent Being in California. Dr. Housing Bubble Blog

Anyhow, looking at a more "recent" chart of the Case-Schiller Index shows Los Angeles entering the 150-200 index range or as you dubb the "inflated" range... so values are dropping incredibly fast to reach equilibrium.
http://thelasvegasrealestateblog.com/wp-content/uploads/2008/07/case-schiller-home-price-indices.png (broken link)
“REAL” Las Vegas Housing Price Change - Las Vegas Real Estate Blog (http://thelasvegasrealestateblog.com/2008/07/30/real-las-vegas-housing-price-change/ - broken link)

By now, Los Angeles is probably even lower than that. Detroit prices are bellow it's 2000 prices even though they didn't have much of a bubble... so economic matters are going to dictate a lot of the course of future home price trend. Anyhow, prices going down isn't necessarily a bad thing... what is hurting for a lot of folks is going to become "opportunities" for many others. If California housing goes down it would eliminate one of the biggest ihibiting factors preventing people from moving/staying in the State.
Quote:
I would like to get a house sooner or later and I don't feel "shafted", I also don't think time is being "wasted/lost" because god forbid I have to rent something right now. I am likely to move out of California though as I feel a bit uneasy about buying here because the state could become a wasteland, economically speaking.
Depends on how well your saving, how long you have been paying rent or have been waiting... and what your current family situation is (single, married without children gives you a lot more mobility... but when you have kids "most" people... and societal and cultural norms would lean toward home ownership - at least that is my impression).

I think your view on things are a little out of the norm which, IMO, is actually good in this case. If you move around a lot... then home ownership might not be a good idea even if prices have normalized - unless your investing.

-chuck22b

Last edited by chuck22b; 01-07-2009 at 03:16 PM..
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Old 01-07-2009, 02:50 PM
 
Location: Kansas
3,855 posts, read 11,494,329 times
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Pretty good data you got there, chuck.
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Old 01-07-2009, 03:43 PM
 
Location: Los Angeles Area
3,306 posts, read 3,338,520 times
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Quote:
Originally Posted by chuck22b View Post
If California housing goes down it would eliminate one of the biggest ihibiting factors preventing people from moving/staying in the State.
Not really. People can't move or stay if they don't can't find employment. I mean, Detroit is dirt cheap why aren't people staying/moving there?

Anyhow, after the bubble cooks off in California I think to what degree the state has been hallowed out will become apparent. A lot of the educated work force left the state during the bubble and businesses have been leaving for decades. In terms of doing business in the state, it looks like its going to get worse.

Honestly, I don't know why anybody young would want to stay in California. The state has been rapped by the oldsters (both individuals and business) that have passed law after law that protected their interest while screwing the younger. In a way its sorta funny, because they all committed their children to a sub-standard life style if they stayed in the state.


Quote:
Originally Posted by chuck22b View Post
I think your view on things are a little out of the norm which....
Well good for me I guess? Following norms without thinking about them never plays off particularly well though.
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Old 01-08-2009, 09:20 AM
 
1,831 posts, read 4,714,634 times
Reputation: 661
As I recall, this wasn't a rag on California thread ...

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