Bad time to buy a home in Knoxville? (foreclosure, to rent)

[Howest2008]

Knoxville is a market that hasn't ovrheated like the California market , so any house that's going to appreciate in value must be a sure bet at lease over the long haul.

[goodbyehollywood]

Originally Posted by hiknapster

If you have to move and buy a house, just make sure you get a very good deal. There are lots of people in the same boat, and NEED to sell. If you plan on selling in a short amount of time, after buying, then I would simply rent.

As far as the economy goes, I don't listen to talking heads; what I pay attention to is the hard numbers. What I see is catastrophic.

I'm with you, and the numbers should be even more devastating than they are, but we are no longer in a true free market economy. The financial puppetmasters are determined to stave off a hard landing by manipulating interest rates, initiating bailouts and throwing money around like a game of Monopoly, so it's very difficult to know what will happen. The market cannot return to equilibrium until supply and demand find a balance, and artificially propping up an overinflated market is preventing that from happening. A long and slow correction is ultimately more frustrating and painful than a swift return to fundamentals.

We are sailing into uncharted waters, so I agree that it's no time to take an unnecessary short-term risk. Negotiating an excellent deal with conservative financing and a long-term horizon is the only way to buy safely in this market. Traders in any asset class are taking on risk in these uncertain times. Sometimes the only way to win is not to play. But then, taking prudent risks delivers greater gains. It's really a question of goals, so everybody's game plan will be different. Just my opinion, of course. (I am also Not an Economist.)

[mbmouse]

I agree, one can never tell for sure what the future will hold.
Was just sent some interesting new updates on "the economy" which all falls together when looking to make a personal financial decision. Thought I would just pass them on to share.

Factory Orders Up 1.5%
According to the Commerce Department, orders for manufactured goods increased by 1.5% in November, the largest increase since a 3.4% rise in July. Nondurable goods orders rose 3%, while durable goods fell by 0.1%, the report showed. The rise in orders to U.S. factories was driven by higher petroleum prices.
www.WashingtonPost.chttp://www.washingtonpost.com/wp-dyn/content/article/2008/01/03/AR2008010301272.html (broken link) – Jan. 3, 2008

Not sure how much stock I would put in this source but here it is.

U.S. Consumer Confidence Index Rose
Consumer confidence increased to 88.6 in December, up from a revised 87.8 in November, according to the Conference Board. This is the first gain in five months. Economists had forecasted consumer confidence to drop to 86.5. The expectations index increased to 75.5 in December, up from 69.1, the report showed. The expectations index measures consumers’ thoughts on future economic conditions.
Bloomberg.com: News – Dec. 27, 2007

Service Sector Grows in December
The non-manufacturing index was 53.9 in December, according to the Institute for Supply Management. A reading above 50 indicates expansion, while a reading below 50 shows contraction. The report showed the new orders index registered at 53.5 in December, up from 51.1 in November, and the employment index was at 52.1 in December, up from 50.8 in November.
ISM December services index 53.9 vs 53.8 expected UPDATE - Forbes.com - Jan. 4, 2008

Retailers Post December Sales
Retail sales were weaker than analysts expected; however, expect stronger sales in January when retail stores benefit from consumers redeeming gift cards. According to Thomson Financial, a financial firm, 19 retailers missed their December projections, nine beat forecasts, and one met expectations. Apparel sellers and department stores were hit particularly hard, while stores like Wal-Mart Inc. exceeded expectations as shoppers traded down to less expensive stores.
Free Preview - WSJ.com – Jan. 15, 2008

U.S. Jobless Rate Hits Two-Year High
The U.S. Department of Labor released an employment report indicating the nation’s unemployment rate increased to 5% in December, up from 4.7% in November. According to the report, employers, both private and government, added 18,000 workers to their payrolls in December. This is the lowest increase since August 2003. Experts say employment conditions are weakening due to a declining housing market and a tightening credit crunch. Economists expected employers to add 70,000 jobs in December for the unemployment rate to increase slightly to 4.8%. According to a White House correspondent, the 5% unemployment rate is low by historic standards. Overall in 2007, U.S. employers added 1.33 million jobs and the unemployment rate averaged 4.6%.
Jobless Rate Hits 5 Percent, 2-Year High , Jobless Rates Hits 5 Percent, A 2-Year High, Fanning Recession Fears - CBS News (broken link) – Jan. 4, 2008

Bernanke Signals Deeper Rate Cuts
Federal Reserve Chairman Ben Bernanke promised to cut interest rates again in order to keep the U.S. economy on track. He stated he did not believe the economy was headed for a recession. Economists are now forecasting that interest rates will be cut by half a percentage point from 4.25%, increasing their predictions that rates would see a quarter point cut.
Bloomberg.com: News – Jan. 11, 2008

[hiknapster]

Wow. Where do I begin with this?

Well, I guess we can start with today. Citicorp's write-down of $18 billion and announced layoffs caused the stock market to drop 277 points. That's on top of the market's 247 point free-fall on Friday, and that was after BofA announced that they were going to buy Countrywide in the third-quarter (we'll see if that actually happens).

The day before, Bernake uncharacteristically announced a rate cut well before the Fed Board meets. I'm sure it was with hopes that the market would rally, but in the long run, it didn't do much. Instead, the dollar fell, AGAIN.

And cutting the rate for banks is a dangerous game with inflation, which doesn't look to great, considering it doesn't take food or gas into account, which are at all time highs. Inflation is at it's worse in 26 years.

Factory orders were up in November, however, pit that against the fact that in August they were at their lowest in seven months (down by 3.3 percent) and you can see that they didn't really GAIN.

And let's look at business inventory. In November it was up by 0.4 percent, which means it was sitting, which is a bad indicator.

The economy skidded to a virtual standstill in the final three months of last year, raising fears the country could fall into a recession, unable to withstand the multiple blows from the prolonged downturn in housing, a severe credit crisis and soaring energy costs.

Already, unemployment is rising. The jobless rate jumped to 5 percent in December, up from 4.7 percent in November. That was the biggest one-month surge in unemployment since October 2001 in the wake of the 2001 terrorist attacks.

Producer prices -- Chart shows the Producer Price Index and monthly percent change

The various economic threats have sent consumer confidence plunging and pushed the economy to the top of voters’ concerns. Political leaders have responded, with President Bush, Democrats in Congress and presidential candidates from both parties putting forward economic stimulus proposals.


Wholesale prices rose by 6.3 percent in 2007 - Stocks & economy - MSNBC.com

I think this excerpt from this editorial really says it all:

However, this is not your father's recession, thus what worked in his day may not work this time around. Yes, fans, this time it really is different.

First you have the housing crisis. While housing has led us into and out of recessions many times before, it's going to take more than monetary or fiscal ease to get us out of today's jam.

There is an oversupply of houses that, nationwide, would take almost a year to work off at current sales rates. And that's assuming both supplies and sales hold steady.

But supplies are rising even as homebuilding is falling because of growing foreclosures. Meanwhile, sales are declining because prices are still too high while lending standards have tightened dramatically.

Lower interest rates will not be of much help. For one thing, they won't prevent many mortgage loans from resetting to higher rates. For another, as noted above, banks are reluctant to lend while many borrowers don't want to (or can't) borrow.

This is not your father's recession - MarketWatch

[mbmouse]

Yep. Like I said, it totally depends on what angle you are looking at it all from and which talking heads info you gather together from. Regardless of which angle or source, someone must look at the economy/market/personal place/situation in life and weigh it all. Add in your own experiences and goals and use it all to make the decision when and if moving and buying a house is good for each individual. In the end, the world keeps turning, gotta be happy in your little corner of it.

[hiknapster]

That's why I like JMT's advice, and yours MBMouse, and several others.

If you are planning to stay in the house for a long time, then I suppose it's not going to make much difference if you ride it out. Just make sure it's with a fixed rate.

The way the economy is going right now, I don't think it's a good time to buy if you plan on moving in less than three years, at least. And do know that prices may go down.

It just depends on how this things shake out. So far, it looks very bad.

I've been up, down and all around this thing, as you can probably tell. (Most of those statistics I quoted off the top of my head.) I'm looking for the silver lining, the thing to save us all.

The best I can find, is with the dollar falling, exports can rise. The probably with that whole theory is, we don't make much and have little to export.

Want to know what really has me worried? Oil hit $100 a barrel a little while ago, and is hovering around $92, last time I checked. Meanwhile, the Saudi's are stepping in to bail out our American companies, like Citicorp.

Well, isn't that great?

Bush (affectionately known as The Shrub) is over there begging to release more oil. The oil minister told him that America has more economic problems than oil.

Yeah, no kidding.

[weisgarber1]

Well, I guess we can start with today. Citicorp's write-down of $18 billion and announced layoffs caused the stock market to drop 277 points. That's on top of the market's 247 point free-fall on Friday, and that was after BofA announced that they were going to buy Countrywide in the third-quarter (we'll see if that actually happens).

From many of the reports I have seen the last few days, including CNBC and Nightly Business Report on PBS, the financial mess is only going to increase. And much of this debacle is caused by the unconscionable greed of a lot of people in the corporate world, especially by many of the CEO's. Countrywide is mentioned, and it was reported on NBN on PBS by one analyst that Angelo Mozillo the CEO, was going to get a "severance package" of 150 million dollars. That amount of money for helping run his company into the ground. 150 million dollars for any CEO is obscene. But, even that 150 million isn't the whole story. The analyst on PBS stated that Mozillo had taken 500 million out of the company. Apparently he is going to be summoned by Congress to explain some of his perks, along with a few other CEO's. After watching Mozillo on CNBC shortly after the subprime story broke and when he was still trying to act like everything was business as ususal, I did a search to find out what his salary was, including all forms of compensation, and I came up with about 120 million annually, as I recall. And CW is only one corporation with only one corporate outlaw as CEO. There are several or many others. This financial mess runs very deep, and it will run deeper according to some. Ron Insana on CNBC stated today that the credit derivatives market might also be creating some problems soon. He suggested that some insurance companies might have some problems. Time will tell. So, given all that is going on, if I wanted a house and I could get it at a decent price and interest rate, I wouldn't hesitate.

[gemkeeper]

Plus, it has been reported that Mozillo has been selling off his corporate stock (knowing of course that it was going in the crapper) and made even more off that. Reward this guy with $150 million severance? Give me a break.

[weisgarber1]

Originally Posted by gemthornton

Plus, it has been reported that Mozillo has been selling off his corporate stock (knowing of course that it was going in the crapper) and made even more off that. Reward this guy with $150 million severance? Give me a break.

One of the CEO's mentioned, don't remember the name, was going to get even more than Mozillo, just to take a hike. IMHO, they are criminals who are guilty of racketeering, and should be at Leavenworth or someplace similar.

[hiknapster]

Originally Posted by weisgarber1

One of the CEO's mentioned, don't remember the name, was going to get even more than Mozillo, just to take a hike. IMHO, they are criminals who are guilty of racketeering, and should be at Leavenworth or someplace similar.

Don't be surprised if it happens. You know that they are going to come after these criminals.

The problem is that everyone knew what was going on, but after the fact, when the economy is crashing, now they'll come after them.