have we hit bottom (Jacksonville, Miami: bank owned, for sale, 2009)

[runswithscissors]

It was not BUSH's dream to make everyone a homeowner. CARTER started that and it got progressively more demanding by Congress especially during Clinton.

Bush was just a willing useful tool to go along with Congress's blackmail that if he wanted to finish Iraq he'd better not cause problems domestically and that's exactly what he did.

You've seen Barney Frank's taped speeches about Fannie and Freddie not being in trouble all during the past administration, right? Even when the high spending Republicans were expressing concern and pushing it.

I am a populist and they are both to blame but Carter and his policies were DEFINITELY the start of this with a program that was allegedly supposed to be to halt redlining but in reality was to force financial industries to give away money to the unqualified. The CRA.

I can also testify that I have about 45 coworkers who all did LIAR LOANS and knew about it 100% and were laughing thinking it was so funny. 10 of those people actually became mortgage brokers in their spare time and ripped off their own friends LOL.

Us old head tried to warn them but there was no stopping them. Especially our coworkers who were first time home buyers in their entire family history of parents, grandparents etc. Too naieve and financially unsophisticated HOWEVER, they KNEW they were lying on the applications.

They learned a big lesson in life but of course now blame everyone but themselves.

[OrlandoRE_Miracle]

I'm not sure if that's true anymore. A lot of people are trying to get out of there, and have been for years now.

Originally Posted by doggiebus

Demand also plays a role in prices, if California wasn't a place so many people wanted to live, it would be much cheaper. But California will always be a place many people will want to live and prices will stay higher than the rest of the country because of demand. .

[OrlandoRE_Miracle]

Are the prices in line to income in other expensive parts of the world (England, Japan). That would be really interesting to compare to the US. We might get our answer.

Originally Posted by Wild Style

How many times have we seen that question asked on this forum? Has the housing market bottomed. Then you get the usual "its coming or its here", well my friends I am going to let you in on a secret. We are no where near the bottom. Home prices are still to darn high. Home prices need to be in line with traditional income to home price ratios. Which in the 70s was 2 to 2.5 times annual income. This means if you make 45,000 dollars then you could afford a $90,000 to $112,500. Then in the 80s/90s that went up to 3 to 3.5 times annual income. So if you made $45,000 per year then you could afford a home that was $135,000 to $157,500. How do we apply this to the housing market? Well you look in a given area and you figure out the median household income for that given area. Then you apply the 3 to 3.5 times annual income ratio to get your home price. You will have to do research to find out incomes for a given area but the info is out there.

So why do I bring this up? Well the fine people at Miami Herald did a piece today titled "South Florida Homes out of reach for many, study finds"

People are still losing jobs, they are now forecasting double digit unemployment numbers by years end. Never mind the real unemployment numbers are in double digits already. Add to this the fact subprime was not the real catastrophe. The real catastrophe will be when prime and near prime alt a loans start resetting, which begins this year and will continue on until 2014. Just to give you a idea of how much larger the prime and near prime loan issue is as compared to sub prime here is a figure. The amount of prime and near prime Alt A loans out there are anywhere from double to triple the amount of outstanding sub prime loans.

To further illustrate just how much trouble the housing market is still in add to this the large inventory of homes and condos still out there. It is amusing to hear the media talk up up how home sales are up. Well yeah, those are for distressed homes (short sales and foreclosures) not existing homes. And even those distressed homes are not true indicators because a lot of that is retarded investors who will most likely find themsleves in a pickle before this is all said and done. When you read stuff like that remember one thing, month over month numbers mean little to nothing because of variances and other anomolys which can not be accounted for. what you want to look for is long term trends which is year over year. So if you hear them saying ohhhh home sales are up from last month, you laugh at that and ask them or research if they are up year over year. Same goes for jobless claims and anything else they may try to through at you. So save your money, and wait for it, its coming, but it isn't here yet.

[Nolefan34]

The housing market will not bottom out as long as people are losing their jobs left and right, and wages continue to decline. We are on a downward spiral. It just seems silly to me that people think we've hit a "bottom" or they know we'll bottom out on a specific month or year. You don't know anything, which is why you're poor, unemployed, and collecting government benefits, lol. Sorry couldn't help. Its wrong, I know. Just buy a house when the time is right and one that you can afford. If you don't qualify for a fixed rate loan, then you cannot afford to buy. Plain and simple. You don't need to buy, its ok to rent for a while until you get on your feet financially. It just cracks me up these people who feel paniced that they need to buy or else they'll miss out. The market will be down for years.

[Wild Style]

Originally Posted by OrlandoRE_Miracle

Are the prices in line to income in other expensive parts of the world (England, Japan). That would be really interesting to compare to the US. We might get our answer.

You do know that England had real estate bubbles just like us which is deflating at extreme rates just like us, right? Good site for UK housing market link

Can't speak about Japan because I have never looked into their market. However, you don't need to look at other countries to understand the real estate market here. This has happened in the 20, in the 80s and 1998-2007 (current situation) and EVERY time we get the same result. People dreaming up home prices remaining high have no clue how economics works and generally go off what they read on the net or what some know nothing told them. It is what it is, the fundamentals are always the same.

Originally Posted by Nolefan34

The housing market will not bottom out as long as people are losing their jobs left and right, and wages continue to decline. We are on a downward spiral. It just seems silly to me that people think we've hit a "bottom" or they know we'll bottom out on a specific month or year. You don't know anything, which is why you're poor, unemployed, and collecting government benefits, lol. Sorry couldn't help. Its wrong, I know. Just buy a house when the time is right and one that you can afford. If you don't qualify for a fixed rate loan, then you cannot afford to buy. Plain and simple. You don't need to buy, its ok to rent for a while until you get on your feet financially. It just cracks me up these people who feel paniced that they need to buy or else they'll miss out. The market will be down for years.

While I agree that most people have no clue what they are talking about when it comes to economics or the current crisis, we shouldn't make fun of someone being unemployed. That is a absolutely demoralizing and heart wrenching thing to go through and I don't wish it on my worst enemy. I understand the situation because I have a degree in econ, and I love the subject and constantly do research on whats going on so I can better prepare myself and my family for unfolding events. While I don't suggest everyone go out and get a degree in the subject I do think people should spend a heck of a lot longer understanding how economics works and how we got here. I good starting point is this video

http://www.youtube.com/watch?v=O_TjBNjc9Bo

and this one

http://www.youtube.com/watch?v=AuPgdZeAFjA

Originally Posted by OrlandoRE_Miracle

I'm not sure if that's true anymore. A lot of people are trying to get out of there, and have been for years now.

You are exactly right, but I didn't bother to bring that up to him because it becomes a circular argument between emotions and facts, they two will never ever come to agreeable conclusion. check this out link

[tallrick]

The real disaster will be brought on by inflation. Rapidly falling dollar value thanks to Paulson, Bernanke and Geithner will cause prices of everything to rise. We already see it in oil prices, commodities and general inflation. While interest rates are low, they will not be once inflation cranks up. Nobody will loan money at 5% when inflation hits the double digits. Otherwise it would be like getting free money. Inflation makes going indo debt a plus for debtors. However, it leaves creditors with nothing. SO the creditors will crank up interest rates and nobody except cash buyers will be able to afford a home. Gullible, stupid foreign investors will buy up select properties driving up their prices while the less desireable properties continue to fall in value. Condos will be all but worthless. Investors buying up foreclosed homes will be stuck paying taxes on assets that produce nothing. Soon the wave of bankruptcies will make commercial property a really bad investment. That stuff is so heavily leveraged it's not funny.

There have been ups and downs but this is the end game. If things get so bad that people start engaging in civil disobedience foreign investors will trample each other heading for the exits. If they go say good-bye to overinflated real estate for good. A healthy hurricane will also have the same effect when Citizen's insurance goes belly-up.

[Wild Style]

Originally Posted by tallrick

The real disaster will be brought on by inflation. Rapidly falling dollar value thanks to Paulson, Bernanke and Geithner will cause prices of everything to rise. We already see it in oil prices, commodities and general inflation. While interest rates are low, they will not be once inflation cranks up. Nobody will loan money at 5% when inflation hits the double digits. Otherwise it would be like getting free money. Inflation makes going indo debt a plus for debtors. However, it leaves creditors with nothing. SO the creditors will crank up interest rates and nobody except cash buyers will be able to afford a home. Gullible, stupid foreign investors will buy up select properties driving up their prices while the less desireable properties continue to fall in value. Condos will be all but worthless. Investors buying up foreclosed homes will be stuck paying taxes on assets that produce nothing. Soon the wave of bankruptcies will make commercial property a really bad investment. That stuff is so heavily leveraged it's not funny.

There have been ups and downs but this is the end game. If things get so bad that people start engaging in civil disobedience foreign investors will trample each other heading for the exits. If they go say good-bye to overinflated real estate for good. A healthy hurricane will also have the same effect when Citizen's insurance goes belly-up.

Tallrick, fall back soldier, you are going in to deep on them, fall back.

[happymccamper]

Originally Posted by rkumar3

Everyone has their own opinion, but based on what i see in the market.... there are a lot more buyers in the market now compared to last couple of years. Aggressively priced foreclosures are getting multiple offers with first 3 days of listing and they often go ABOVE ASKING price. The over all volume has also gone up big time in the South Florida market. So while, I don't see the prices going up yet... we have certainly seen a slowdown in the downward move.

Plus don't forgot, we won't know we have hit the bottom until we can clearly see it the rear view mirror..... which would probably 6 - 12 months after the bottom has 'actually' hit.

Just my 2 cents!

This is very true, we are looking at houses right now, and sometimes after we find a new listing before we even get a chance to do a showing the house will already have a contract for it. Also the other gentlemen that mentioned investors buying properties is also what I have heard through the grapevine. It is very frustrating for a first time home buyer, let me tell ya. And don't even get me started on trying to buy a short sale, oy!

[happymccamper]

Originally Posted by rkumar3
Everyone has their own opinion, but based on what i see in the market.... there are a lot more buyers in the market now compared to last couple of years. Aggressively priced foreclosures are getting multiple offers with first 3 days of listing and they often go ABOVE ASKING price. The over all volume has also gone up big time in the South Florida market. So while, I don't see the prices going up yet... we have certainly seen a slowdown in the downward move.

Plus don't forgot, we won't know we have hit the bottom until we can clearly see it the rear view mirror..... which would probably 6 - 12 months after the bottom has 'actually' hit.

Just my 2 cents!

This is very true, we are looking at houses right now, and sometimes after we find a new listing before we even get a chance to do a showing the house will already have a contract for it. Also the other gentlemen that mentioned investors buying properties is also what I have heard through the grapevine. It is very frustrating for a first time home buyer, let me tell ya. And don't even get me started on trying to buy a short sale, oy!


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[rkumar3]

happymccamper:
I fully agree about short sales and try to avoid them at all cost... unless it is already 'approved'. Don't loose faith, just stay on top of them and you will find a good bargain. I am sure you have learned by now, that banks often put overly aggressive price to create a bidding war... i would suggest if you really like something, put an offer above the asking price.