Anybody Underwater on their Mortgage (Levittown, Burns: real estate market, rental, condo)

[llama8]

Originally Posted by brassbin

Tom, i respectfully disagree with you. This recession(or depression?) is nothing like we've seen in our lifetime, this is not a simple down turn that would recover in a few years, we have structural problem, the fundamentals of our economy will undergo drastic changes, a lot of people are going to lose their jobs, and when they do they will be instantly under water because so many people are living paycheck by paycheck.

There have been numerous recessions throughout history and this is just one more. It may feel worse than previous ones if you are affected, but overall, it will recover in a few years just like all the other ones.

If you bought your home before this mortgage crisis you shouldn't panic unless you need to sell now. Otherwise, the prices will bounce back down the road. It's really only forclosures and people needing to sell that are "under water".

[Nico's the Man!]

Originally Posted by llama8

There have been numerous recessions throughout history and this is just one more. It may feel worse than previous ones if you are affected, but overall, it will recover in a few years just like all the other ones.

If you bought your home before this mortgage crisis you shouldn't panic unless you need to sell now. Otherwise, the prices will bounce back down the road. It's really only forclosures and people needing to sell that are "under water".

Bear in mind after the Great Depression homes prices didnt reach their previous level till 25 years later.. Also real estate prices went down for 19 years after 1989.. As someone whos looking to buy on LI a year from now I hope you're right about the bounce back..after I buy of course but Im skeptical

[Elke Mariotti]

Originally Posted by ClarkStreetKid

And why are they living paycheck to paycheck? My wife and I always built an emergency fund of six months, then 12 months, then 18 months, and on and on. This was something we both learned to do while on the Island and going through a few downturns. Now we both can get laid off, pay off any bills and not become homeless. The fundamental problem with our economy was too many people living beyond their means figuring the money party would never end.

FWIW, We just bought a new car, a dishwasher and microwave/convection oven. Saving and living within our means during the good times has enabled us to take advantage of bargains now.

Congratulations!
Glad to hear there are people out there who understand about living within their means and the importance of an emergency fund!

[Elke Mariotti]

Originally Posted by Nico's the Man!

Also real estate prices went down for 19 years after 1989..

???? Prices went down for nineteen years after 1989? What's wrong with this picture??

[Nico's the Man!]

Originally Posted by Elke Mariotti

???? Prices went down for nineteen years after 1989? What's wrong with this picture??

My bad Im a product of Long Island public schools. I meant to say real estate prices went down for 19 years in Japan after their market burst. I was just attempting to draw comparisons between where we are now compared to two other scenarios..Great Depression and Japan.. Both economic and real estate tragedies. One took housing 25 years to recover, the latter still hasnt recovered yet to pre bubble levels. Im not a housing guru by any stretch but do any of you really believe LI will recapture its pre bubble level in a few years?

[Elke Mariotti]

Originally Posted by Nico's the Man!

My bad Im a product of Long Island public schools. I meant to say real estate prices went down for 19 years in Japan after their market burst. I was just attempting to draw comparisons between where we are now compared to two other scenarios..Great Depression and Japan.. Both economic and real estate tragedies. One took housing 25 years to recover, the latter still hasnt recovered yet to pre bubble levels. Im not a housing guru by any stretch but do any of you really believe LI will recapture its pre bubble level in a few years?

LOL - maybe it was the late hour...

IMHO we're pretty close to the bottom here on L.I., but I don't see a serious upward trend for the next five years or so...
Mortgage rates are another story entirely.

[Nico's the Man!]

Originally Posted by Elke Mariotti

LOL - maybe it was the late hour...

IMHO we're pretty close to the bottom here on L.I., but I don't see a serious upward trend for the next five years or so...
Mortgage rates are another story entirely.

Here's a question I have for you. What underlying issues will help LI to maintain its current or close to its current home values if unemployment continues to increase as forecast in the tri-state area? What was scary I was watching Bloomberg TV a few weeks ago and they had that Shiller guy on..the one with the Shiller Index. He said that dropping interest rates to 2 percent wouldnt even alleviate the further erosion of home prices in the US. Obviously he was talking in generalizations not LI.. Interesting nonethless. Im moving back to the Island next year.. My dilemna is this.. I can afford to pay cash for a house. Low interest rates dont mean anything to me. I never like to overpay for anything, so if interest rates go up I can end up overpaying 150K for a house and I dont want to do that because I dont know if I'll be on LI long term when i move back. Is there anyplace I can get detailed housing data to dive through that is centralized on LI to include unemployment and rising interest rate price depreciation scenarios? Thanks for your help

[Elke Mariotti]

Originally Posted by Nico's the Man!

Here's a question I have for you. What underlying issues will help LI to maintain its current or close to its current home values if unemployment continues to increase as forecast in the tri-state area? What was scary I was watching Bloomberg TV a few weeks ago and they had that Shiller guy on..the one with the Shiller Index. He said that dropping interest rates to 2 percent wouldnt even alleviate the further erosion of home prices in the US. Obviously he was talking in generalizations not LI.. Interesting nonethless. Im moving back to the Island next year.. My dilemna is this.. I can afford to pay cash for a house. Low interest rates dont mean anything to me. I never like to overpay for anything, so if interest rates go up I can end up overpaying 150K for a house and I dont want to do that because I dont know if I'll be on LI long term when i move back. Is there anyplace I can get detailed housing data to dive through that is centralized on LI to include unemployment and rising interest rate price depreciation scenarios? Thanks for your help

I'll see what I can come up with.
I agree, the Case-Shiller reports are always interesting. I posted another thread by them(interactive), which focused on other cities. Check it out, while I do some research for your above question

[Nico's the Man!]

Originally Posted by Elke Mariotti

I'll see what I can come up with.
I agree, the Case-Shiller reports are always interesting. I posted another thread by them(interactive), which focused on other cities. Check it out, while I do some research for your above question

Thanks for your help Elke I appreciate it.. Here's a link from Reggie Middletons blog concerning Shiller Index. Fascinating and Id recommend Bookmarking Reggies blog and reading it daily.. He often speaks of RE both residential and commercial in such great detail.

http://boombustblog.com/Reggie-Middl...his-graph.html

[jgwyld]

Underwater does not mean out of options. You must recognize your options.

If you intend to keep your house, you should look into loan modifications, forbearance agreements, maybe renting out your home and short selling.

Education can allow underwater homeowners to feel empowered.