Housing Bubble? Your thoughts, predictions

[dramamama6685]

Originally Posted by WhoFanMe

Hopefully it was a party on a budget so they didn't drop to 19%!

LOL, I was thinking the same thing!

[WhoFanMe]

Bank of America has agreed to acquire Countrywide for $4 Billion.

[maine4.us]

I don't think you will see that happen again. With the inflated prices for homes in Florida, it would truly become a retirement state. The only people who would be able to buy a home would be the ones who retired and sold a home without a mortgage. 25% of a 200K house would be 50K. Sorry, but people here in Florida who work, don't make the kind of money with the cost of living to save that much money. The inflated value of property is what lead to the mess we are in now, and of course I almost forgot, home equity lines. I never understood why anyone would take equity out of a home to buy an automobile, or boat, or RV. Those things all depreciate. People took the appreciation of their home to buy items that depreciated. The net result is obvious. You owe more than a house is worth. Upside down is for automobiles, not homes. You will not be upside down with an auto loan in 5 years, but how long does it take to get "right side up" in a home? Decades I think. Too much greed, involving borrowers and lenders. Now the market has to stabilize, but raising down payments to 25% would kill off the market for years to come. I don't think it will happen.

[WhoFanMe]

Originally Posted by maine4.us

I don't think you will see that happen again. With the inflated prices for homes in Florida, it would truly become a retirement state. The only people who would be able to buy a home would be the ones who retired and sold a home without a mortgage. 25% of a 200K house would be 50K. Sorry, but people here in Florida who work, don't make the kind of money with the cost of living to save that much money. The inflated value of property is what lead to the mess we are in now, and of course I almost forgot, home equity lines. I never understood why anyone would take equity out of a home to buy an automobile, or boat, or RV. Those things all depreciate. People took the appreciation of their home to buy items that depreciated. The net result is obvious. You owe more than a house is worth. Upside down is for automobiles, not homes. You will not be upside down with an auto loan in 5 years, but how long does it take to get "right side up" in a home? Decades I think. Too much greed, involving borrowers and lenders. Now the market has to stabilize, but raising down payments to 25% would kill off the market for years to come. I don't think it will happen.

I agree, banks make money by lending and if they don't lend, they will go under. It's too much to expect a first time home buyer in their 20's to come up with more than a few thousand dollars for a down payment on a home. Maine has a wonderful program from Maine State Housing called Maine Assist which will grant (not loan) up to $4000 in closing costs and pre-paids and give a below market interest rate, if somebody other than the buyer (usually the seller) pays 3 points. The buyer needs 3% down to get this loan and it's available statewide. Yes there is PMI involved and yes, you need excellent credit - but that's who should be buying homes, people with excellent credit.

[WhoFanMe]

Sorry to add to my own post - the Peoples Regional Opportunity Program (PROP) in Portland also has a grant program to cover most of the down payment. I was able to put a young couple with very little income into a South Portland condo last fall for almost no money down with both PROP and Maine Assist.

[dmyankee]

Just a thought, but are the people in their 20's who think they need a house, the same ones who think they should make 80k out of college?

A 20% down payment used to be the norm. I purchaced my first at 25. Then again, I was making $21/hr with all the overtime I could handle.

[WhoFanMe]

Originally Posted by dmyankee

Just a thought, but are the people in their 20's who think they need a house, the same ones who think they should make 80k out of college?

A 20% down payment used to be the norm. I purchaced my first at 25. Then again, I was making $21/hr with all the overtime I could handle.

No, those people don't want a starter house!

[dramamama6685]

Originally Posted by dmyankee

Just a thought, but are the people in their 20's who think they need a house, the same ones who think they should make 80k out of college?

A 20% down payment used to be the norm. I purchaced my first at 25. Then again, I was making $21/hr with all the overtime I could handle.

LOL.. we make more than that (combined).