Now that the RE tax credit is signed, will it turn RE into seller's market? (Alpha: sales, 2010)

[SweepTheLeg]

Originally Posted by CaptainNJ

what if they would like to sell and move but cant because their house is worth less than they owe?

Then they shouldn't be moving, unless they are downsizing, and then being underwater shouldn't hurt so much.

Lets be honest - being underwater affects those in really pricey RE because that's what took the biggest hit. There's plenty of stuff that's lost value but not to the point where it's living hell.

The interesting thing is... you buy a car, and it loses value. You buy a house, and that's supposed to be a money making scheme?

It's really not unless you pour more money into it.

[SweepTheLeg]

Is there a reason why Delphi cross-posted the same exact thing in two forums?

[CaptainNJ]

Originally Posted by SweepTheLeg

Then they shouldn't be moving

The interesting thing is... you buy a car, and it loses value. You buy a house, and that's supposed to be a money making scheme?

It's really not unless you pour more money into it.

well, they shouldnt because they are underwater. it limits them. if they werent underwater then they would have more freedom to choose. thats just reality and they will have to deal with it but being underwater does impact their decisions whereas if the house was worth more than they owed they could move closer to family, new job, whatever its more freedom.

buying a house as a money making scheme is dangerous. lots of marketing out there has led people to believe its a guaranteed money maker. lots of people are very disappointed today.

[stevemorse]

I sure hope it does!! I want this to end. I have had enough. I am not getting off on people who are under water, suffering or sour grapes attitude. People's terrible moods, people's money problems, housewives who cant shop problems, I wish the spend wrecklessly days were back!!!

I dont care if Obama was in office for 4 more years if the economy gets better and things change. I want people to be happy again!!!!

[Charles22]

Originally Posted by SweepTheLeg

The interesting thing is... you buy a car, and it loses value. You buy a house, and that's supposed to be a money making scheme?

It's really not unless you pour more money into it.

Did you fail economics?

Property rises in value because of its limited nature. Also, location helps a lot better than some new rims.

[elflord1973]

Originally Posted by Lusitan

LOL - yeah like the piddly $6,500 credit is going to do anything. These credits are peanuts in NJ.

Consider the effect of leverage -- suppose that goes into a 3.5% down FHA loan, and the buyer finances their selling costs (by having the seller pay them)

[CaptainNJ]

Originally Posted by stevemorse

I sure hope it does!! I want this to end. I have had enough. I am not getting off on people who are under water, suffering or sour grapes attitude. People's terrible moods, people's money problems, housewives who cant shop problems, I wish the spend wrecklessly days were back!!!

I dont care if Obama was in office for 4 more years if the economy gets better and things change. I want people to be happy again!!!!

i think we all really want the economy to improve and things get back on track (even the people who seem to take pleasure in bad news). its just that those people believe that you have to take the pain before things get better so we may as well get the suffering over so things can get back on track. like ripping off a bandaid fast so you get one quick pain instead of slow drawn out pain which is what the government involvement is turning this into.

[Lusitan]

Originally Posted by elflord1973

Consider the effect of leverage -- suppose that goes into a 3.5% down FHA loan, and the buyer finances their selling costs (by having the seller pay them)

So the $6,500 credit becomes the 3.5% down payment on a 185K crapshack. That's not going to do anything to prop up the market in NJ.

The FHA loans from the past 6 months are already starting to default and the rising tide of foreclosures will continue to outpace any meager benefit provided by the credit, thus continuing the downward spiral.

We're sitting at 10%+ unemployment and things are getting uglier by the day. This is spitting into the wind.

[ordinar]

1. $6.5K/8K is peanuts in NJ
2. Tax credit has NOT stopped prices going down
3. Houses remain unaffordable due to bubble in prices and property taxes
4. Unemployment and economy is going down the drain
5. Zero rates by fed means asset inflation-Fannie is insolvent
6. Need my savings for my retirement no buying someone else's retirement

Why should I buy a house worth 200K in 1999 and 500K in 2006 for 400K?
Right, no reason. I will wait for another 40% off...

http://seekingalpha.com/article/1705...pressed-levels

[elflord1973]

Originally Posted by Lusitan

So the $6,500 credit becomes the 3.5% down payment on a 185K crapshack.

No, it's 3.5% down on something that costs 185k more than the buyer would have otherwise bought. It's not going to make much impact on those million dollar houses. What it's going to do is move a lot of otherwise very weak buyers into the hunt for places in the 300k-400k range.

I agree that these loans (any 3.5% loan for that matter) will perform poorly, so by handing out this cheap money, they're basically kicking the can down the road to the best of their ability. Instead of a quick correction followed by a steady recovery, it's going to be a slow bleed.