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Unread 10-26-2009, 07:51 PM
 
5 posts, read 10,672 times
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Default Crash?

anyone else feel like theres something wrong and were heading for a serious downturn? I think the housing market in LI is going to get destroyed...
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Unread 10-26-2009, 07:54 PM
 
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Quote:
Originally Posted by Aprilia101 View Post
anyone else feel like theres something wrong and were heading for a serious downturn? I think the housing market in LI is going to get destroyed...

Right after the collapse of NYC.
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Unread 10-26-2009, 08:07 PM
 
Location: Little Babylon
3,502 posts, read 3,950,270 times
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The downturn has already happened, the biggest problem is how long it stays down.
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Unread 10-27-2009, 10:09 AM
 
953 posts, read 1,251,659 times
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You know...I was talking to a GC realtor the other day that I know fairly well. He was telling me the market is much better now than at this time last year. He said he had a 6 party bidding war on a house in GC and that the price was getting pushed up past asking price.

I was shocked. Either he's telling me a lie, or the Wall St. bonuses are so good this year that people have completely lost it and forgotten everything in one years time.
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Unread 10-27-2009, 10:15 AM
 
66 posts, read 74,334 times
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Wait, a realtor told you the market is in good shape.....
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Unread 10-27-2009, 10:24 AM
 
Location: Rolando, San Diego CA 92115
7,049 posts, read 16,816,054 times
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Compared to California, you guys are in fine shape.
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Unread 10-27-2009, 10:39 AM
 
7,077 posts, read 6,685,627 times
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I'm sure here and there you might get a bidding war between a few rich people on a house in Garden City, but for the most part there is a lot of inventory that isn't moving very quickly. I don't think it's going to get much worse, maybe a little bit, but I don't see it getting better until the employment situation improves, which I'd like someone to explain to me exactly how and when that will happen.

A lot of realtors and home owners still fantasize about the days when banks were handing out loans to people for 5-6 times their annual incomes when the benchmark has always been 3, and hence people who paid 150K for a house in 1992 were getting 500K in 2006 and swimming in it. You still have people who can't absorb that fact that those days are over. Even a couple making 150K can only really afford a 450K mortgage strictly based on ratios, and that's with clean credit and little or no debt.....people are still listing 4 bedroom splits in middle of the road areas with 20 year old "updates" for that much..the numbers just don't add up for what people are expecting to get when they sell.
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Unread 10-27-2009, 11:00 AM
 
Location: Tri-State Area
2,915 posts, read 2,622,737 times
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There will be a long period of stagnation in housing prices. There are mainly two reasons for that: 1) the unemployment picture makes those with jobs uneasy and less likely to make long term commitments with all the uncertainty. Those without jobs are unable to even contemplate purchasing a home due to lack of income and financing. 2) The banks are being prudent with lending. Approximately 97% of all conforming loans ($417,000 and lower) are being sold to Fannie Mae and Freddie Mac. Most banks will not hold mortgages on their books at these low rates. Also, those days of getting a mortgage with no money down are over. The bare minimum is 3.5% with FHA and even those require mortgage insurance to be taken out, in addition to minimum income requirements. All other mortgages require a minimum of 20% down. The real question, is how many prospective buyers have $100K in cash to do a $500K deal? Actually, they'd need more when you count incidentals like closing costs and minor repairs, moving expenses. Let's just say $125K.
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Unread 10-27-2009, 11:04 AM
 
7,077 posts, read 6,685,627 times
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Quote:
Originally Posted by FrmlyBklyn View Post
There will be a long period of stagnation in housing prices. There are mainly two reasons for that: 1) the unemployment picture makes those with jobs uneasy and less likely to make long term commitments with all the uncertainty. Those without jobs are unable to even contemplate purchasing a home due to lack of income and financing. 2) The banks are being prudent with lending. Approximately 97% of all conforming loans ($417,000 and lower) are being sold to Fannie Mae and Freddie Mac. Most banks will not hold mortgages on their books at these low rates. Also, those days of getting a mortgage with no money down are over. The bare minimum is 3.5% with FHA and even those require mortgage insurance to be taken out, in addition to minimum income requirements. All other mortgages require a minimum of 20% down. The real question, is how many prospective buyers have $100K in cash to do a $500K deal? Actually, they'd need more when you count incidentals like closing costs and minor repairs, moving expenses. Let's just say $125K.
That's the real killer. I know a bunch of people with stable jobs and good income and no debt..but I know very few people who have that kind of cash saved, and even if they do it's tied up in 401K or something. .
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Unread 10-27-2009, 11:22 AM
 
Location: Union County
4,915 posts, read 4,175,649 times
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Quote:
Originally Posted by dman72 View Post
Even a couple making 150K can only really afford a 450K mortgage strictly based on ratios, and that's with clean credit and little or no debt.....people are still listing 4 bedroom splits in middle of the road areas with 20 year old "updates" for that much..the numbers just don't add up for what people are expecting to get when they sell.
I'd be interested in your real world math for a 450k mortgage on a 150k salary... specifically when you factor in LI taxes, utilities, insurance, etc, etc. Even if that couple had the 90k cash (serious LOL) for a 20% down payment, I'd be concerned floating a 360k mortgage on that salary. Specifically because you need to maintain an emergency savings, you want to save for your kid's education, go on family vacations, etc... I'm talking quality of life where everything isn't based on meeting the housing payment and keeping the lights on every month.
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