Buying a 2nd home then foreclose the 1st home...

[mikenbacismama]

I haven't even begun to read this thread in detail. But I'll say, hey, if this is what he has to do to keep his family afloat, what the heck?

The sub-prime loan mess has actually affected almost all of us. What about us suckers who bought homes in 2006 with 20% down, now that the economy has tanked? If we wanted to sell we'd be up the creek, unless we wanted to give it away.

[olecapt]

Originally Posted by scuba steve

That's where we disagree - I see lots of areas (see: west coast) with plenty of room left to fall. I see real estate values dropping to the point that housing is worth the value of the land + whatever the cost to build a house is, and that point being where a significant population in the area being able to afford housing without having to take out some unusual form of lending. The housing bubble burst in different areas at different times (case in point - it was summer / early fall '07 in Seattle, much later than it was in your area) so a lot of markets have plenty of room left to fall.

You are dreaming I am afraid. SIL place on Marine Avenue in Santa Monica. Less than 1700SF. 7000 SF lot. $1.23 million. It is a tear down. What that says is the land is worth well over a million. That puts it at 6 milliion the acre.

My mothers place in Montauk LI, NY. Long block off a Sound beach. 800K. Also probably a tear down. And this is in Montauk well passed all civilization. Ain't ever gonna be malls in that part of the world.

Your comments may have some reality in those areas where land is an available commodity. They have no relevance on the coast...or even in Vegas where available land is sold at market by auction.

[olecapt]

Originally Posted by mikenbacismama

I haven't even begun to read this thread in detail. But I'll say, hey, if this is what he has to do to keep his family afloat, what the heck?

The sub-prime loan mess has actually affected almost all of us. What about us suckers who bought homes in 2006 with 20% down, now that the economy has tanked? If we wanted to sell we'd be up the creek, unless we wanted to give it away.

That is true. You do what you need to do. actually in some ways southern FL was hit worse than we were. But if there is no good out...walk.

The hard part is to gauge the recovery. It will occur in due time. But when? And how fast? Wish I knew. But on this I am a bit of a pessimist. The destruction of confidence is so powerful I see a very slow recovery.

I would suggest to anyone they do a careful analysis of where they are...and then do the right thing. If you need a doubling of values to break even...common here...walk away...you won't live there long enough to break even so you might as well take the bad news early. However if you put 20% down and you are down ten percent more...ride it out. You will likely be whole in five years or less and you can rent if forced to move in the interim.

It is very situational. Take some bad news and out wait it. But if you are tanked...get out. Don't let the idiot preachers get to you. Life is too short to screw it up with the abstract principals of the myth followers.

[mikenbacismama]

Captain, believe it or not, we actually moved to Florida from your neck of the woods. We sold our house in Henderson in '06 to move closer to family both here & in NY. Although we did realize some nice gains from the sale of our NV home, that $ has gone up in dust the past 2 years paying the bills here since the economy has made my husband's business pretty much non-existent.

Now, I know some people will slam us for "moving without jobs". Yes, we've gotten jobs (the pay here stinks), we just never expected his business to do so poorly. We've always taken chances and won, this gamble turned out to be a loser.

[scuba steve]

Originally Posted by olecapt

You are dreaming I am afraid. SIL place on Marine Avenue in Santa Monica. Less than 1700SF. 7000 SF lot. $1.23 million. It is a tear down. What that says is the land is worth well over a million. That puts it at 6 milliion the acre.

My mothers place in Montauk LI, NY. Long block off a Sound beach. 800K. Also probably a tear down. And this is in Montauk well passed all civilization. Ain't ever gonna be malls in that part of the world.

Your comments may have some reality in those areas where land is an available commodity. They have no relevance on the coast...or even in Vegas where available land is sold at market by auction.

Sounds like a bet then, that the average price in Vegas won't fall by more than 5% from the current price? My guess is that there's more than that left to go, but I'm not sure how much. I lived in Seattle and will stick my neck out and guess that King County, WA has another 15% left to go (that'd put it at about 20% off peak value). I can't remember how many times I heard people say 'there's no more land!' yet the development continued. Can't comment on beach community and waterfront properties; those are all unique situations and far removed from the normal market.

Either way it turns out, it's been interesting following the housing market train wreck unfold over the last year and a half.

[bentlebee]

If people buy a second home and foreclose on the first...and doing this on purpose....isn't this called scamming and doesn't is show that these peopel have no respect for money that other people are lending them...they just don't care...but at the same time the rules will be stricter for the future since legislators will make changes that will affect even more people and the people who are on purpose defaulthing and buying a 2nd home should realize that they are causing others from having less chances in the future on even getting a mortgage, so IMo this is selfish and short time thinking and they and others will lose.

[olecapt]

Originally Posted by bentlebee

If people buy a second home and foreclose on the first...and doing this on purpose....isn't this called scamming and doesn't is show that these peopel have no respect for money that other people are lending them...they just don't care...but at the same time the rules will be stricter for the future since legislators will make changes that will affect even more people and the people who are on purpose defaulthing and buying a 2nd home should realize that they are causing others from having less chances in the future on even getting a mortgage, so IMo this is selfish and short time thinking and they and others will lose.

Bentlebee - You of all people should know that economic decisions are close and personal. You do not worry about what they do to the society or the economy.

The tactic is a perfectly reasonable one for a very narrow set of people. It is never going to be broadly enough practiced to be of import.

It is much more a fun one to discuss on various lists.