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Sure it does -- the whole reason people trust data from the CBO or BLS or FRB or National Bureau of Economic Research or even NAR is that their a fairly widely known level of impartiality OR AT LEAST undertandable bias.
If I have not heard of these people I have no way of evaluating the impartiality or bias...
Heard on the local news that 49% of mortgage holders in Tampa FL are under water. These numbers are meaningless if you're making your mortgage payment and have no intentions of trying to sell the house. Eventually you won't be 'under water'. Being 'under water' is an accepted fact to anyone who buys a new car with less than 10-15% down payment.
Heard on the local news that 49% of mortgage holders in Tampa FL are under water. These numbers are meaningless if you're making your mortgage payment and have no intentions of trying to sell the house. Eventually you won't be 'under water'. Being 'under water' is an accepted fact to anyone who buys a new car with less than 10-15% down payment.
I agree with you on that. Underwater but paying your mortgage is a good data point on home values but not necessarily an indicater of people in trouble.
NAR definitely has an understandable bias
I would get worried if NAR didn't come out with "now is the best time to buy" each month.
The actual data put out by the NAR, as far as I know is accurate. It is what they say in the media that is hype. Even the NAR has a need to get an accurate handle on what is going on in the market, at least internally.
Quote:
Originally Posted by chet everett
If I have not heard of these people I have no way of evaluating the impartiality or bias...
Great, so you have no way of evaluating it. But again so what? That says nothing about the value of the information nor does it mean its "silly" because they are employing statistical methodologies.
You seem to be saying that the labor department's use of statistics is not "silly" because you know about the labor department, but this companies use is "silly" because you've never heard of them. Regardless, statistics is the only way to rationally evaluate this stuff.
Eventually you won't be 'under water'. Being 'under water' is an accepted fact to anyone who buys a new car with less than 10-15% down payment.
Eventually could be decades for many and the case with automobiles is different. Firstly, people typically do not sell their cars before the loan is paid so being temporarily underwater means little. Secondly, the amount one is underwater in their automobile is a small amount. If someone is underwater in their home by $5,000 I doubt they will think about walking away because of that. Now, when they are underwater $100,000+...that is a much different story. The degree which people are underwater matters a lot. Would you keep paying a mortgage for $400k when you can purchase a house up the street just like yours for $200k or less or rent one for around half your PITI? This is the case in many areas in California.
Does the data from this outfit list how many people are more than $50,000 underwater? Or even a percentage of original value? I mean, if we use the car finance as an example then being $50,000 underwater on a $1M is really only like being a little underwater on a very high end car, but being $50K underwater on a $200K house is quite different.
Does the data from this outfit list how many people are more than $50,000 underwater? Or even a percentage of original value? I mean, if we use the car finance as an example then being $50,000 underwater on a $1M is really only like being a little underwater on a very high end car, but being $50K underwater on a $200K house is quite different.
I'm not sure if this report does that, I've seen others that do. I'm also not sure at what point people typically start thinking about walking away, I just know the analogy to an automobile is a rather poor one.
Many people have walked away because their homes have lost value.
... Many people have walked away because their homes have lost value.
My reason for the skepticism is precisely because I too have seen people "walk away" from properties that I do not think they should have. While the car analogue is not perfect, it ain't too bad either.
I mean, seriously if the people who were 'upside down' simply walked away from their car they would be stuck WITHOUT A CAR, a bad idea. Sure, cars generally depreciate to some very low value and stay there until they no longer run at all at which point they might have only 'scrap value'. I do not think that will happen with homes, and MOST homes will EVENTUALLY recover a large portion of their value and may not be "underwater", but even if that NEVER happened by 'walking away' the home owner is STILL out of place to live and ON THE HOOK for the amount of their mortgage, and unlike car dealers, who routinely roll the 'negative equity' of an upside down trade-in onto a new high interest loan for a new car a don't see any lenders doing the same for folks who 'walk away' from their home and then try to buy again...
Heard on the local news that 49% of mortgage holders in Tampa FL are under water. These numbers are meaningless if you're making your mortgage payment and have no intentions of trying to sell the house. Eventually you won't be 'under water'. Being 'under water' is an accepted fact to anyone who buys a new car with less than 10-15% down payment.
They are not meaningless if you are trying to determine the future direction of the market. The one factor no one seems to take into consideration is the one most important to future real estate value, immigration. Immigration policy is what will determine future real estate values. If political pressure, due to unemployment, causes strict immigration policy, values will continue down for years to come. If we continue to have massive amounts of immigration, housing oversupply will be soaked up and demand will once again take its toll on the market. The reason is that the birth rate is now below what is needed to maintain the population.
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