Spring Market? What Spring Market? (short sale, refinance, credit)

[halfoffpeak]

Originally Posted by mumra

Are you sure about that? How about the people that bought a house that they couldn't afford and are getting bailed-out, they aren’t getting shafted.

Oh, I count those among the "best and brightest" Seriously though you wouldn't like to be in their shoes--they are only being subsidized because a lower mortgage is preferable over a foreclosure (from the bank's point of view, of course).

[Marc Paolella]

Originally Posted by ghuber

Marc,

Though I have much respect for you and have found your posts largely telling of the times and the state of real estate as a whole, this one screamed "I'm a realtor!"

Lets take the past 10 years am exaple housing... In 2000, 2001, 2002 and 2003 houses were far more reasonably priced. I could buy a *really* nice house for 350k back then. That same house now (after the depreciation caused by falling home values) is still listed at 550k-650k by many sellers in NJ. Can you say ridiculous?

Then lets examine NJ property taxes.. In many areas they're on an unstoppable, rapid acceleration forward. In 2003 you might have paid 7k, now they might cost you 10k as NJ jacks them up because the state is totally broke.

Now lets examine NJ salaries... In 2000 (er maybe 2002-2003) you might have made 50k/yr. That money when combined with comparable income from a spouse could comfortablely buy you a 350k house. If you received a 4% raise each year since 2000 you'd now be making roughly 70k in 2009. So your income has only grown by 20k/yr (maybe 40k/yr including a spouse), but that same house will now cost you 200-300k more.

The equation is imbalanced. Now is not a good time to buy. Don't even bother to argue about the low interest rates because all those people who bought back in 2000-2003 have probably now refi'ed and hold an interest rate of 5-5.5% on their mortgages (Remember the house they paid just 350k for). They might have had it rough for a few years (When their interest rate was.. 6-7%), but now they have a sweet deal. Too bad that deal isn't going to happen for anyone that buys a house today. They're going purchase a home at an inflated price that is probably only going to depreciate for the next 5 years, at which time the price will level off. Then 5 years after that their home value will actually start to appreciate and income catches up to value. Oh and when they need to bring their monthly payment down, how are they going to accomplish that? Refi? Nope, don't think so they already were given a rock bottom rate just so they could afford to purchase a home at an inflated home value. Guess they're screwed if they don't start making some more money!

Now I'm not saying that every house is a bad deal nor am I saying it isn't a good time for some people to buy... I'm simply saying that as a whole, the market, the economy and the conditions are not advantageous for the majority of us to buy. Sitting on the sidelines and watching the carnage is a much better idea if you *don't* absolutely need to buy something right now. The homebuyer tax credit may get bigger (15,000k), interest rates are said to be going lower (4-4.5%), and there is simply no doubt housing prices are going to continue to decline (9-15%).

I have no problem with people timing the market down if they want to. I favor a truly free country where people make decisions without interference from the government. We no longer have that. We have the government causing crisis after crisis, then solving each crisis by spawning yet another crisis.

The government is basically filled with a legion of Lusitans who come up with endless reams of meaningless statistics to keep themselves in business and flush with taxpayer cash. Economic theory long ago became meaningless gibberish since every statistic quoted has a purpose behind it. And that purpose is rarely to elucidate any real truth. It is usually to convince the public that a crisis exists and that only more regulation and more regulators and more spending are the solution to the "problem".

Oh and one other thing. You are implying that $350,000 could buy a really nice house 10 years ago. Except that incomes were reflective of the time and the same proportion of people who can afford $600,000 now could afford $350,000 then. Nothing has changed, really. Nice houses in nice neighborhoods will ALWAYS cost too much for the average working schlub. The solution: Move above schlubdom. Educate yourself, become better and more marketable at something that pays better.

I know a lot of people want to wait for the miracle of low prices to fall on their heads, but it ain't going to happen. Even at today's supposedly high prices, I see multiple bids on good homes that come to the market properly priced. As values drop, this will happen on more and more homes.

And if you do not think that low interest rates are important, just wait until they are 15% and you cannot afford anything at ANY price.

It might seem that I am just a Realtor trying to jump start the market, but trust me I could give a rat's you know what. There will ALWAYS be enough market activity for a qualified and experienced real estate agent, even in a Great Depression. Right now I am doing a bit of a land office appraising foreclosed multi-families.

I am going to ATTEMPT to have fun going to see my sister's band tonight on Long Island, but between 12 listings, 50 appraisals, and 10 buyers (yes, you heard that right, I'm working with people who actually want to buy real estate) I doubt I will sleep much in the next 2 quarters of the dead and buried real estate market.

By the way, my buyers are all well aware that the properties they buy are likely to drop 10-30% in the next few years following their purchase. Guess what? They don't care! They are going to live in and enjoy their homes on a daily basis for many years. They are smart people who are not depending on their homes to provide them with income. Over the long term they will do well, as ALL people who invest in real estate do in the long run.

They will lock in fixed sub 5% mortgages that will one day be wistfully gazed at by others who will say: "It could have been me. If only I had not listened to Lusitan, who advised me to sit on my hands and wait for a payday that never came. I COULD HAVE BEEN A CONTENDER! Bwahhhhh..."

[Marc Paolella]

Originally Posted by halfoffpeak

Movers and shakers, best and brightest are very well appreciated, thank you very much. They are still making money and have the rest of us bailing them out with our money.

In a bubble, the best and brightest keep the money and the worst and dimmest, that is us, get the short end of the stick.

But you know what is the saddest thing to see? That the dimmest remain dimmest and still believe that the best and brightest look after them.

It is not the job of the best and brightest to look after the dim wits. It just works out that way.

[halfoffpeak]

Originally Posted by Marc Paolella

It is not the job of the best and brightest to look after the dim wits. It just works out that way.

I know and good luck. Real estate agents are doomed in this market. Unless they saved, they got the short end of the stick, too.

Their level of despair is reflected on their efforts to argue for buying a house in this market, which is impossible to argue for

[stevemorse]

Originally Posted by Marc Paolella

I have no problem with people timing the market down if they want to. I favor a truly free country where people make decisions without interference from the government. We no longer have that. We have the government causing crisis after crisis, then solving each crisis by spawning yet another crisis.

The government is basically filled with a legion of Lusitans who come up with endless reams of meaningless statistics to keep themselves in business and flush with taxpayer cash. Economic theory long ago became meaningless gibberish since every statistic quoted has a purpose behind it. And that purpose is rarely to elucidate any real truth. It is usually to convince the public that a crisis exists and that only more regulation and more regulators and more spending are the solution to the "problem".

Oh and one other thing. You are implying that $350,000 could buy a really nice house 10 years ago. Except that incomes were reflective of the time and the same proportion of people who can afford $600,000 now could afford $350,000 then. Nothing has changed, really. Nice houses in nice neighborhoods will ALWAYS cost too much for the average working schlub. The solution: Move above schlubdom. Educate yourself, become better and more marketable at something that pays better.

I know a lot of people want to wait for the miracle of low prices to fall on their heads, but it ain't going to happen. Even at today's supposedly high prices, I see multiple bids on good homes that come to the market properly priced. As values drop, this will happen on more and more homes.

And if you do not think that low interest rates are important, just wait until they are 15% and you cannot afford anything at ANY price.

It might seem that I am just a Realtor trying to jump start the market, but trust me I could give a rat's you know what. There will ALWAYS be enough market activity for a qualified and experienced real estate agent, even in a Great Depression. Right now I am doing a bit of a land office appraising foreclosed multi-families.

I am going to ATTEMPT to have fun going to see my sister's band tonight on Long Island, but between 12 listings, 50 appraisals, and 10 buyers (yes, you heard that right, I'm working with people who actually want to buy real estate) I doubt I will sleep much in the next 2 quarters of the dead and buried real estate market.

By the way, my buyers are all well aware that the properties they buy are likely to drop 10-30% in the next few years following their purchase. Guess what? They don't care! They are going to live in and enjoy their homes on a daily basis for many years. They are smart people who are not depending on their homes to provide them with income. Over the long term they will do well, as ALL people who invest in real estate do in the long run.

They will lock in fixed sub 5% mortgages that will one day be wistfully gazed at by others who will say: "It could have been me. If only I had not listened to Lusitan, who advised me to sit on my hands and wait for a payday that never came. I COULD HAVE BEEN A CONTENDER! Bwahhhhh..."

I agree so much with this post. Nice homes, in great towns will always be too much for the average shulb, thats the truth. Now here is the answer, buy a house that is not so great, in a great town and fix it up over time and make it a great house in that great town. A working shulb can do that!!!!! So there are alternatives for sclubs if they are willing to wait and fix it up alittle over time. This to me is an affordable idea.
I see some price drops but in a lot of the great towns its not enough for the working schulb. I see in towns have dropped prices but its not like they are going to drop to 180 K for that 3 bedroom 2 bathroom in Hillsdale lets say. Those days are over. Realisticly it could go to 350 K in Hillsdale but I dont see lower than that for a good house not in a bad flood zone in Northern Bergen going for less unless its a dump. I do however UNDERSTAND THEIR DREAMS and wishes that they could get that home. I mean put yourself in their shoes and we all have had those feelings with some material object at one time. I mean I would consider giving up a pinky finger for a great house in Peapack? Hopefully those can start their house hunting search soon and find what they are after.

And I can almost promise you when our buddies here buy that home they will now be on OUR side. They wont be saying the thing they are saying now!!!!!!They will be toating prices are not going to come down that much. Do you honestly think if they buy a home that side of the equation wont change???? Funny but so true!

[Marc Paolella]

Originally Posted by halfoffpeak

I know and good luck. Real estate agents are doomed in this market. Unless they saved, they got the short end of the stick, too.

Their level of despair is reflected on their efforts to argue for buying a house in this market, which is impossible to argue for

A good real estate agent is NEVER doomed in any market. Actually that follows for any profession. The best in any field always find a way to get the job done and make money doing it. Plus you underestimate how much fun this job is!

[tahiti]

Originally Posted by Marc Paolella

The government caused the bubble. As it causes all bubbles. Government involvement in every aspect of the financial system from the banks to the stock market to real estate. It is incorrect on your part to attribute the problems that surround us to the movers and shakers in society. We would not have a society were it not for the best and brightest among us. I think they are under-appreciated at best.

Now, in the name of protecting us, we have a government that is printing money like there is no tomorrow. And we might well wish for no tomorrow when the engine of inflation starts and achieves orbital velocity.

Pay down those credit cards while you still can kiddies. This move to the left that y'all voted for, a headlong move towards statism, collectivism, socialism, and altruism, will bankrupt this country in ways no one can even imagine yet. 20% mortgages and Jimmy Carter misery indexes are just around the corner. I can't say I will feel sorry for you: y'all asked for it. Homecoming chickens coming up!

I'm sorry, are you moving out of the country or something?

[stevemorse]

he has a point with the inflation, sound like another fox news listener. However Jimmy Carter days just may be around the corner and that will mean higher mortage rates so maybe now dont jump on me , but maybe he has a point.

[tahiti]

why do i keep hearing (in this thread) that this recovery will be a "V"? what leads people to believe that?

[stevemorse]

what do you mean by a v, do you mean the pattern??? ohh and I think your picture in skis makes you cute as a button!!!