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Why are there more closings than before? Because people want to close before the end of the year. Or they have plans for the holidays and want to move before Christmas and New Year.
You often see a lot of closings at this time of year, from deals that were negotiated earlier. It doesn't mean the buyers are out there in droves now.
Spring 2008 will be much better. why? 1) Fed has cut rate by 75 basis points and will keep cutting until fed fund rate to 3%, which is expected by most bond experts such as PIMCO's Bill Gross. 2) Countrywide and other lenders are working with subprime ARM borrowers who are unable to pay adjusted mortages so that they will not go to foreclosure. 3) The NJ housing market and economic conditon is not as bad as media portrayed; The holiday shopping starts up 8%, which beats estimated 4% by 100%. 4) All real estate markets are local. As an example, the median price in Trenton-Princeton area was up 6% in Q3 compared to 2006.
Great, the Fed will keep cutting rates and then the dollar will fall even lower.
Alot of people are hoping, but be realistic, the housing market hasn't hit bottom and won't for at least another year. Even the markets that are considered to be bucking the trend are starting to show stress(Seattle etc..)
I haven't read anything to support the idea that the market has stabilized. What seems to be happening is that some sellers have lowered their price enough to attract those who have no realistic option but to buy now, e.g. corporate employees transferred in from out of state, etc.
The key words, "if the house if priced right," seem to go over most sellers' heads. Most buyers know that the market is still dropping, and buying now doesn't make financial sense unless you plan to stay for more than 8-10 years. (Of course, you may have reasons other than financial to buy now.)
I sold my 5-bedroom home 18 months ago, in anticipation of downsizing for retirement. I decided that the best thing to do, given the deteriorating market, was to rent for a year or two. Given what i've read about 2008 and 2009, i'll probably continue to rent until the market finds a bottom.
If i were a buyer now, i would pay only what i thought a property would be worth in 24 months, i.e. 15-20% below today's value.
Ok, I have to comment on this one. The federal interest rate is an overnight rate for banks. The mortgage rate is based on long term notes, which are not reliant upon the federal interest rate.
There is no direct relationship between the federal interest rate and mortgage rates. If the mortgage rates drop when the federal rate drops, its due to the impact on the general economy, and does *not* imply some implicit relationship. Because there isn't one.
Home mortgage rates are dependent upon mortgage backed securities, and not the federal interest rate. So the rate dropping just effects the US Dollar and the general economy, and it does not lower your rate when you apply for a mortgage.
I haven't read anything to support the idea that the market has stabilized. What seems to be happening is that some sellers have lowered their price enough to attract those who have no realistic option but to buy now, e.g. corporate employees transferred in from out of state, etc.
The key words, "if the house if priced right," seem to go over most sellers' heads. Most buyers know that the market is still dropping, and buying now doesn't make financial sense unless you plan to stay for more than 8-10 years. (Of course, you may have reasons other than financial to buy now.)
I sold my 5-bedroom home 18 months ago, in anticipation of downsizing for retirement. I decided that the best thing to do, given the deteriorating market, was to rent for a year or two. Given what i've read about 2008 and 2009, i'll probably continue to rent until the market finds a bottom.
If i were a buyer now, i would pay only what i thought a property would be worth in 24 months, i.e. 15-20% below today's value.
the only problem with your plan is that when things do turn around you won't know it and you could get caught. if you need a place to live are able to buy something now it is a great time to be a buyer, there is a huge inventory and if the sellers are realistic you can pick up a great deal.
If you are buying for the long term what happens in he next 12-36 months is almost meaningless, if history shows you anything, real estate will turn around and is always a good long term investment.
Granted nobody has that crytal ball and if the world goes to hell you, me and every other homeowner is up the creek but I'd rather be in a home I owned versus being a renter if things do hit the fan.
Ok, I have to comment on this one. The federal interest rate is an overnight rate for banks. The mortgage rate is based on long term notes, which are not reliant upon the federal interest rate.
There is no direct relationship between the federal interest rate and mortgage rates. If the mortgage rates drop when the federal rate drops, its due to the impact on the general economy, and does *not* imply some implicit relationship. Because there isn't one.
Home mortgage rates are dependent upon mortgage backed securities, and not the federal interest rate. So the rate dropping just effects the US Dollar and the general economy, and it does not lower your rate when you apply for a mortgage.
not quite right, mortgages are affected by the cost of money, interest rates and if the fed interest rates are lowered mortgage rates will follow.
It is the fairly recent securitization of the mortgages that is the blame for the problems we are having now. the big money guys realized that if everyone needs to sell their securitized mortgage holdings don't have the value they thought it did, causing a bit of a panic. Once they realize that everyone in a house isn't going to sell at once things will stabilize and some normalcy will return
not quite right, mortgages are affected by the cost of money, interest rates and if the fed interest rates are lowered mortgage rates will follow.
Like I said, no *direct* relationship - the federal rate effects the general economy, which, in turn, *may* effect the rate. However, lowering the federal rate does *not* mean that you'll suddenly get better mortgage rates.
Quote:
Originally Posted by apvbguy
It is the fairly recent securitization of the mortgages that is the blame for the problems we are having now. the big money guys realized that if everyone needs to sell their securitized mortgage holdings don't have the value they thought it did, causing a bit of a panic. Once they realize that everyone in a house isn't going to sell at once things will stabilize and some normalcy will return
Not to mention Judge Boyko's recent ruling, pointing out that these foreclosures going on right now can't show chain of ownership, and because of that, can't foreclose on homes:
Quote:
In each of the above-captioned Complaints, the named Plaintiff alleges it is the holder and owner of the Note and Mortgage. However, the attached Note and Mortgage identify the mortgagee and promisee as the original lending institution — one other than the named Plaintiff. Further, the Preliminary Judicial Report attached as an exhibit to the Complaint makes no reference to the named Plaintiff in the recorded chain of title/interest. The Court’s Amended General Order No. 2006-16 requires Plaintiff to submit an affidavit along with the Complaint, which identifies Plaintiff either as the original mortgage holder, or as an assignee, trustee or successor-in-interest. Once again, the affidavits submitted in all these cases recite the averment that Plaintiff is the owner of the Note and Mortgage, without any mention of an
assignment or trust or successor interest. Consequently, the very filings and submissions of the Plaintiff create a conflict. In every instance, then, Plaintiff has not satisfied its burden of demonstrating standing at the time of the filing of the Complaint.
...
Despite Plaintiffs’ counsel’s belief that “there appears to be some level of
disagreement and/or misunderstanding amongst professionals, borrowers, attorneys and members of the judiciary,” the Court does not require instruction and is not operating under any misapprehension. The “real party in interest” rule, to which the Plaintiff-Lenders continually refer in their responses or motions, is clearly comprehended by the Court and is not intended to assist banks in avoiding traditional federal diversity requirements.2 Unlike Ohio State law and procedure, as Plaintiffs perceive it, the federal judicial system need not, and will not, be “forgiving in this regard.”3
-------------------------
2
Plaintiff’s reliance on Ohio’s “real party in interest rule” (ORCP 17) and on any Ohio case citations is misplaced. Although Ohio law guides federal courts on substantive issues, state procedural law cannot be used to explain, modify or contradict a federal rule of procedure, which purpose is clearly spelled out in
the Commentary. “In federal diversity actions, state law governs substantive issues and federal law governs procedural issues.” Erie R.R. Co. v. Tompkins, 304 U.S. 63 (1938); Legg v. Chopra, 286 F. 3d 286, 289 (6th Cir. 2002); Gafford v. General Electric Company, 997 F. 2d 150, 165-6 (6th Cir. 1993).
3
Plaintiff’s, “Judge, you just don’t understand how things work,” argument reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process. Typically, the homeowner who finds himself/herself in financial straits, fails to make the required mortgage payments and faces a foreclosure suit, is not interested in testing state or federal jurisdictional requirements, either pro se or through counsel. Their focus is either, “how do I save my home,” or “if I have to give it up, I’ll simply leave and find somewhere else to live.”
In the meantime, the financial institutions or successors/assignees rush to foreclose, obtain a default judgment and then sit on the deed, avoiding responsibility for maintaining the property while reaping the financial benefits of interest running on a judgment. The financial institutions know the law
charges the one with title (still the homeowner) with maintaining the property.
There is no doubt every decision made by a financial institution in the foreclosure process is driven by money. And the legal work which flows from winning the financial institution’s favor is highly lucrative. There is nothing improper or wrong with financial institutions or law firms making a profit —
to the contrary , they should be rewarded for sound business and legal practices. However, unchallenged by underfinanced opponents, the institutions worry less about jurisdictional requirements and more about
maximizing returns. Unlike the focus of financial institutions, the federal courts must act as gatekeepers, assuring that only those who meet diversity and standing requirements are allowed to pass through.
Counsel for the institutions are not without legal argument to support their position, but their arguments fall woefully short of justifying their premature filings, and utterly fail to satisfy their standing and jurisdictional burdens. The institutions seem to adopt the attitude that since they have been doing this
for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the Court to stop them at the gate. The Court will illustrate in simple terms its decision: “Fluidity of the market” — “X” dollars, “contractual arrangements between institutions and counsel” — “X” dollars, “purchasing mortgages in bulk and securitizing” — “X” dollars, “rush to file, slow to record after judgment” — “X” dollars,
“the jurisdictional integrity of United States District Court” — “Priceless.”
The first post sounds like the NAR cheerleader ads from a year ago. I feel for those who bought into "the market has already corrected" camp.
Im in Sussex Co and my night/ weekend job is selling refrigerators. SOME houses are selling as I meet these people. Fully a quarter of my sales are to people in Sparta. NJ did run up but not quite as steeply as say FL and NYC is still booming. NYC is Northern NJ's reason for existence. People do need a place to live and some are willing to pay up to not be renters.
the only problem with your plan is that when things do turn around you won't know it and you could get caught.
I can't agree. Compared to the stock market, the real estate market moves relatively slowly, and any movement is reported regularly in the press. When this market starts to stabilize and recover, there will be plenty of notice -- and time to buy back in. In the meantime, no one has been able to accurately predict when (or where) this market will hit bottom. I'll stay on the sidelines for now, thanks.
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