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Most are refinancing right now into low interest FHA's. People have smartened up. They aren’t just waiting for those ARMS to come to bear. They are refinanced their way out right now and have even had their mortgages re-adjusted based on value.
And I wish them much luck - trying to refinance a mortgage for an asset that has lost 20% in value, having entered the loan with 95-100% financing. Right now you can only refinance a loan that is within 105% LTV (loan to value) ratio. That means you have to come to the closing table with tens of thousands of dollars ($80k is 20% of $400k). Most people would rather bail, and that's exactly what will happen.
Quote:
Originally Posted by propain
This second coming you are all hoping for is not going to happen.
But you can wait if you like. Best of luck. I just would hate to see you all price yourself out of the market. Don’t doubt the will of Liers to hold on prices. Some will fall due to job loss, divorce etc. Most will just close the hatches and ride it out. Most have already re-adjusted their mortgages to 5% rates and will now ride out the storm as interest rates surge.
The forthcoming second wave of foreclosures has just begun. We're in the eye of the storm right now, so things look rosier than they actually appear. Unemployment on the island is past 9% now, and still increasing.
It's fine if people want to wait it out, but they won't see home prices where they were at peak for at least 15 years, maybe more. Lots of baby boomers are depending on a sale to finance their retirements, and at some point people will need to sell due to life changes. It's a long, slow downward slope from here in real terms, and the fall in real value will at some point be evened out by inflation and cause a long period of home price stagnation.
Keep in mind that you are only speculating that house prices will continue to drop as/if interests rates go up. Propain thinks we've hit the bottom and therefore, is a good time to buy (Low interest rates). You are saying the exact opposite but neither of you really know for sure. Propains position is logical and arguably correct right now. Your position will have to play out in coming months/years.
I read in last Friday's Newsday the median price isn Suffolk was $340,000, up from the last time I checked many months ago ($314,000). I don't check very often though. There is a spike right now so spring definetly saw some RE action.
The one thing you need to be careful of is your timeframe. You keep saying "6 more months". IMO, you will probably be dead until the following spring if you wait that long.
I keep reading your thoughts and can't get away from the opinion that RIGHT NOW seems to be the perfect time for you (I mean you, personally) to buy something. Your plan may make sense but if we have hit bottom, your arguement for why you have been waiting is in the toilet.
There is a specific reason why I know we'll be shooting at Jan '10 to start looking. I'm not going to lie that I would like to make a move right now that would put me in a house in 3 months, but I'm not interested in buying another loss. We fell for the RE agent nonsense in 2006, I won't again. There is no way we've bottomed out. It's sheer supply and demand. People cannot afford these home prices without the phoney mortgage products that were used a few years back. A 350K median home price is very difficult for a family making 100K to handle, especially you're talking about 8K in taxes on top of the mortgage. People will not be as easily led to making that plunge now.
I read in last Friday's Newsday the median price isn Suffolk was $340,000, up from the last time I checked many months ago ($314,000). I don't check very often though. There is a spike right now so spring definetly saw some RE action.
This happens every year during the spring and summer selling season, it is part of normal yearly cyclical market activity. A more valid comparison would be against the same period last year.
Quote:
Originally Posted by scottzilla
The one thing you need to be careful of is your timeframe. You keep saying "6 more months". IMO, you will probably be dead until the following spring if you wait that long.
Not going to happen. 6 more months is valid because cyclically speaking, it's the winter doldrums and real estate just isn't moving. In the spring it'll pick up again and prices will rise yet again, but they'll be at least 10-15% lower than the same time this year.
There is a specific reason why I know we'll be shooting at Jan '10 to start looking. I'm not going to lie that I would like to make a move right now that would put me in a house in 3 months, but I'm not interested in buying another loss. We fell for the RE agent nonsense in 2006, I won't again. There is no way we've bottomed out. It's sheer supply and demand. People cannot afford these home prices without the phoney mortgage products that were used a few years back. A 350K median home price is very difficult for a family making 100K to handle, especially you're talking about 8K in taxes on top of the mortgage. People will not be as easily led to making that plunge now.
Im curious. Where are you looking to buy? What price are you hoping to get?
A condo is a horrible investment. That is why you cant sell yours. There is so many condos now. People don’t want to touch with other peoples 10ft poles. Good luck subletting your condo. You sure your allowed to?
Otherwise, enjoy paying 8% next year at close to what you see today on house prices.
Others will buy in today at low interest rates and hope for a good dose of inflation which is almost a guarantee. The government is running massive deficits and has the printing presses at full throttle. That's the classic recipe for inflation. Inflation is the debtor friend.
If you purchased real estate at 5% you will make out like a bandit. With inflation If that happens, your monthly payments will be low and you'd get to repay the principal over time with devalued dollars. That's a double win.
But you can wait if you like. Ill still be here in my house I own now counting my dollars.
The units that have gone up for sale in my complex have sold in a couple of months. We aren't in Miami..there is a serious lack of affordable housing here, and condos are one aspect that is affordable. The combo of taxes and maintenance is half what the smallest starter house you can buy in this area runs. We have both young couples and retirees moving in regularly.
People are already renting there, so it isn't an issue. Nice try though. I'm sure you're here because your house is paid off..you only want to see prices keep up because you want to keep the riff raff out of your neighborhood.
The units that have gone up for sale in my complex have sold in a couple of months. We aren't in Miami..there is a serious lack of affordable housing here, and condos are one aspect that is affordable. The combo of taxes and maintenance is half what the smallest starter house you can buy in this area runs. We have both young couples and retirees moving in regularly.
People are already renting there, so it isn't an issue. Nice try though. I'm sure you're here because your house is paid off..you only want to see prices keep up because you want to keep the riff raff out of your neighborhood.
Nice try? I don’t really care what you do.
You are 1000% correct. That is why where im from housing prices wont drop. Most cant afford the taxes in my neighborhood let alone the home prices. But of course keeping the prices high keeps out the undesirables. Ya got me! I want a safe neighborhood for my children with good schools.
Im curious. Where are you looking to buy? What price are you hoping to get?
The calculators all say that we can afford 400-500K with our current income and debt levels. I'll shoot more for the 400K's because taxes are high. If interest rates go up, that number adjusts down, but so will peoples selling prices, unless you subscribe to propains poopie economics theory, based on the "I want my house to be worth what I paid plus my renovations" model.
I watch the MLS every week...there are still a lot of people stuck in a fantasy world....unrenovated 3 Br's for 350K on main roads, all kinds of stuff like that. I can't believe agents even post these prices. The same house around the corner from me has been on the market since the beginning of last summer and they've moved 15K in their asking price when a bigger house in better condition on a better road sold for 40K less.
Everyone has their opinion of where things are going, and based on that prediction they decide what is best for them. If you have the ability to wait, and choose to buy now you are predicting that we are at or near a bottom and you take that risk, if you wait, you think there is more pain to come and you take a likewise risk. Most predictions call for further declines. You can find many sources with relevant facts and logic as to why further declines are forecast, but try to find a decent source with relevant information as to why this is the bottom rather than a bunch of bloggers or the NAR sponsored propoganda.
Bottom seekers have been predicting false bottoms for awhile now. Last year I recall a lot of people saying that things would be on the up and up in the springtime, oops, not. They had no reason to say these things, just speculation and gut feelings. A lot of the statements so far have been wild conjecture. We have already lost 30% or more of value, long islanders are stubborn and will hold onto their prices no matter what, LI has always been unaffordable, most of the foreclosures have already happened. What validity and accuracy do these statements have. Is there past or current evidence of this that can be cited. I would like to see some sources or backup of this information. Turn the crystal ball back to 2006 and ask someone if you should buy then, most would say hurry up and buy quick before you get priced out of the market even worse ... oops look what happened, got screwed.
I think a lot of people overestimate the wealth of long islanders, especially future buyers wealth (many of whom are choosing to move elsewhere). The average household income is roughly 100K (for new buyers, it is most likely well below this as they are generally younger). Put that into a how much house can you afford calculator and you get a range of 300-380K (conservative to aggressive) estimate of what you can afford. But the average house is not in this range. The bottom of housing is currently in this range. For people below average, there is no hope of affordability.
The recent sales numbers are misleading, this could be indicative of many sales in poorer areas or a lot of lower cost housing selling, but look at most housing for sale on MLS in an average neighborhood like massapequa or bablyon etc. and you find a few things in this range but very quickly escalate above this. The avg buyer is still basically priced out unless they want to over leverage themselves with FHA low down loans and restart the time bomb.
The calculators all say that we can afford 400-500K with our current income and debt levels. I'll shoot more for the 400K's because taxes are high. If interest rates go up, that number adjusts down, but so will peoples selling prices, unless you subscribe to propains poopie economics theory, based on the "I want my house to be worth what I paid plus my renovations" model.
I watch the MLS every week...there are still a lot of people stuck in a fantasy world....unrenovated 3 Br's for 350K on main roads, all kinds of stuff like that. I can't believe agents even post these prices. The same house around the corner from me has been on the market since the beginning of last summer and they've moved 15K in their asking price when a bigger house in better condition on a better road sold for 40K less.
You didnt say the location where you were looking to buy.
Sorry you dont like my economics, but welcome to LI. Its been going on for a long time. In Massapeuqa there is an area called Harbor Green. There is nothing special about it. Its just like the rest of Massapequa yet the prices are about 30% higher than in any other areas of Massapequa. You also have "Nassau Shores" and "Treehaven" ect..
These areas are all in the same SD but command different prices. Some because of being on the water, others for no reason at all other than a fancy name and special street signs. PEOPLE make these prices. Not the market. Im sorry, but its fact all over the island.
I can't believe agents even post these prices. The same house around the corner from me has been on the market since the beginning of last summer and they've moved 15K in their asking price when a bigger house in better condition on a better road sold for 40K less.
Unfortunately, agents do not set asking prices, sellers do. Unfortunately, many sellers are unrealistic in their expections, as are many buyers.
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