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Old 07-22-2006, 09:33 AM
 
1,868 posts, read 5,232,265 times
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Quote:
Originally Posted by RedNC
This is what the Mortgage Bankers Association says about home loans in America.
35% of owners own their home outright.
50% have fixed rate loans, many refinancing to lower rates with fewer years.
15% have adjustable rate/ interest – 8% of those being high wealth income earners.
That leaves you with 7% of all mortgages are rate sensitive.
There is $7.3 trillion in mortgage debt, $83 billion are adjustable.
Red I was talking about California..................not all of America. By the way ...anyone who took out a second also has an ajustable. Also....I do not think the bubble is national. I think California, Florida, Vegas, etc are going to take a dive. Check your private messages.
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Old 07-22-2006, 09:49 AM
 
164 posts, read 319,139 times
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Quote:
Originally Posted by RedNC
This is what the Mortgage Bankers Association says about home loans in America.
35% of owners own their home outright.
50% have fixed rate loans, many refinancing to lower rates with fewer years.
15% have adjustable rate/ interest – 8% of those being high wealth income earners.
That leaves you with 7% of all mortgages are rate sensitive.
There is $7.3 trillion in mortgage debt, $83 billion are adjustable.
Also, housing experts have consistently indicated that the housing slowdown will be a normal correction. Even Bernacke testified this week that housing has slowed in a reasonable and stable fashion, and should remain that way. No one is predicting catastophe.

It's true that bankrutpcy and foreclosures are starting to soar. But bankruptcy has been on fire throughout the 2000s, not just now. And not every ARM will end badly. But how can we have a soft landing when these things are happening? I think because overall economic indicators are good. Maybe not the best ever, but still good.

The sad fact is, a segment of the population is struggling that never struggled before. People in wealthier towns, such as San Diego or Orange County, are grappling with the fact that they are no longer "middle class" but instead have been demoted to those folks who will forever reside in apartments if they want to stay. But just because you can no longer play, doesn't mean the game is over. The housing market will soldier on, it just won't include some of these folks. And I think it's easier for some people to believe that the housing market will go bust rather than recognize that they need to move to plan B. For example, someone from Orange County posted that he is renting and waiting for the bubble to pop. Like a substitute sitting on the bench, he seemed to have the whole game figured out from the sidelines. Maybe he does, but I think people like this might need to consider that the game in these expensive towns is now high stakes poker and they need to find a cheaper table. They also need to recognize that this situation is not the case in most "regular" towns - even though housing is expensive everywhere in Cal, and foreclosures/bankruptcies are on the rise, much of Cal (and the US) is filled with regular towns populated by people working retail, food industry etc. and doing okay living in a house.
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Old 07-22-2006, 10:12 AM
 
1,126 posts, read 3,571,562 times
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Quote:
Originally Posted by shannon94
Red I was talking about California..................not all of America. By the way ...anyone who took out a second also has an ajustable. Also....I do not think the bubble is national. I think California, Florida, Vegas, etc are going to take a dive. Check your private messages.
That's not true! Seconds have fixed too
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Old 07-22-2006, 11:22 AM
 
1,735 posts, read 4,233,376 times
Reputation: 1437
Quote:
Originally Posted by shannon94
Red I was talking about California..................not all of America. By the way ...anyone who took out a second also has an ajustable. Also....I do not think the bubble is national. I think California, Florida, Vegas, etc are going to take a dive. Check your private messages.
First “you” are taking one guys “opinion” from one county “San Deigo” and predicting that all of CA, FL, LV housing is going to radically drop in value.

I looked at the data he listed and he seemed to come to the conclusion that single family homes have leveled off and will remain flat. As he said “Neither I nor anyone else can predict exactly how the market will behave in the future.”

This is what Chapman University is predicting “Housing prices, which as recently as 2004 soared 27.4 percent, are expected to be flat in 2006, then drop 5.9 percent in 2007.”

This is from the UCLA Anderson Forecast “We do not predict a recession, nor do we predict a substantial decline in average nominal home prices,” Ratcliff says. “This forecast it based on two arguments. There is not enough vulnerability in the usual sources of employment loss to create a recession, and the historical record suggests that average home prices do not usually fall without this kind of job loss.”

My conclusion is everyone has an opinion and only time will tell what the real outcome of the real estate market will be. If you drive a stake in the ground and say this is where we are and we have to plan everything from here, you will find yourself playing catch up for the rest of your life. You will find that the economy is too fluid to predict with certainty what will happen. As Connie stated “I think it's easier for some people to believe that the housing market will go bust rather than recognize that they need to move to plan B.” Right now plan B is a longer term loan or to an interest only, LIBOR, ARM’s. I have seen the FED raise and lower interest rates for years and real estate seems to adapt to the changes. If the risk seems too great then stay out of the game.
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Old 07-22-2006, 11:34 AM
 
1,035 posts, read 2,654,772 times
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One reason the real estate market here on LI appreciated so much is interest rates were low, so sellers started increasing their prices and due to the lower rate, the market itself(the buyers) caused it, they were willing to pay such high prices...now the shift is swinging the other way, rates are going up and real estate prices are heading down...each area is very different. The prediction here is houses will drop another 5-6% to have more of a correction and then they will remain level...sim to the stock market, we saw all the high priced stocks, then the huge correction and now not many stocks are seeing the huge increases they were and they may never...

While houses may drop in percentage points they aren't going to crash, if they crash that is a sign of another problem that will not be good for anyone
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Old 07-22-2006, 09:46 PM
 
1,868 posts, read 5,232,265 times
Reputation: 525
Quote:
Originally Posted by RedNC
First “you” are taking one guys “opinion” from one county “San Deigo” and predicting that all of CA, FL, LV housing is going to radically drop in value.

I looked at the data he listed and he seemed to come to the conclusion that single family homes have leveled off and will remain flat. As he said “Neither I nor anyone else can predict exactly how the market will behave in the future.”

This is what Chapman University is predicting “Housing prices, which as recently as 2004 soared 27.4 percent, are expected to be flat in 2006, then drop 5.9 percent in 2007.”

This is from the UCLA Anderson Forecast “We do not predict a recession, nor do we predict a substantial decline in average nominal home prices,” Ratcliff says. “This forecast it based on two arguments. There is not enough vulnerability in the usual sources of employment loss to create a recession, and the historical record suggests that average home prices do not usually fall without this kind of job loss.”

My conclusion is everyone has an opinion and only time will tell what the real outcome of the real estate market will be. If you drive a stake in the ground and say this is where we are and we have to plan everything from here, you will find yourself playing catch up for the rest of your life. You will find that the economy is too fluid to predict with certainty what will happen. As Connie stated “I think it's easier for some people to believe that the housing market will go bust rather than recognize that they need to move to plan B.” Right now plan B is a longer term loan or to an interest only, LIBOR, ARM’s. I have seen the FED raise and lower interest rates for years and real estate seems to adapt to the changes. If the risk seems too great then stay out of the game.
Something to take a look at........


Notices of Default
houses and condos

County/Region 2005Q1 2006Q1 %Chg
Los Angeles 3,535 4,211 19.1%
Orange 775 1,107 42.8%
San Diego 960 1,533 59.7%
Riverside 1,307 2,148 64.3%
San Bernardino 1,427 1,670 17.0%
Ventura 261 433 65.9%
SoCal Total 8,330 11,102 33.3%
San Francisco 104 127 22.1%
Alameda 516 564 9.3%
Contra Costa 576 605 5.0%
Santa Clara 500 527 5.4%
San Mateo 188 186 -1.1%
Marin 64 76 18.8%
Solano 269 294 9.3%
Sonoma 139 157 12.9%
Napa 29 47 62.1%
Bay Area Total 2,385 2,583 8.3%
Santa Cruz 67 108 61.2%
Santa Barbara 93 133 43.0%
San Luis Obispo 70 75 7.1%
Monterey 79 129 63.3%
Coast Total 309 445 44.0%
Sacramento 763 1,136 48.9%
San Joaquin 451 586 29.9%
Placer 126 239 89.7%
Kern 406 461 13.5%
Fresno 494 540 9.3%
Madera 55 79 43.6%
Merced 135 153 13.3%
Tulare 211 212 0.5%
Yolo 42 48 14.3%
El Dorado 62 54 -12.9%
Stanislaus 291 451 55.0%
San Benito 27 49 81.5%
Yuba 23 48 108.7%
Sutter 31 28 -9.7%
Central Valley Tot. 3,117 4,130 32.5%
Mountains Total 110 96 -12.7%
North Calif Total 250 312 24.8%
Statewide 14,501 18,668 28

Last time I checked............defaults usually lead to foreclosure. Some of those percentages are pretty high. It's just the beginning.
Also.....I have never used the word ALL. I am merely saying [b]alot[B of people who bought in the last couple of years with ARM's etc. will not be sitting pretty. Investors won't be buying these homes that have been foreclosed on that's for sure. Who's going to buy them?
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Old 07-22-2006, 10:00 PM
 
1,126 posts, read 3,571,562 times
Reputation: 413
Quote:
Originally Posted by shannon94
Something to take a look at........


Notices of Default
houses and condos

County/Region 2005Q1 2006Q1 %Chg
Los Angeles 3,535 4,211 19.1%
Orange 775 1,107 42.8%
San Diego 960 1,533 59.7%
Riverside 1,307 2,148 64.3%
San Bernardino 1,427 1,670 17.0%
Ventura 261 433 65.9%
SoCal Total 8,330 11,102 33.3%
San Francisco 104 127 22.1%
Alameda 516 564 9.3%
Contra Costa 576 605 5.0%
Santa Clara 500 527 5.4%
San Mateo 188 186 -1.1%
Marin 64 76 18.8%
Solano 269 294 9.3%
Sonoma 139 157 12.9%
Napa 29 47 62.1%
Bay Area Total 2,385 2,583 8.3%
Santa Cruz 67 108 61.2%
Santa Barbara 93 133 43.0%
San Luis Obispo 70 75 7.1%
Monterey 79 129 63.3%
Coast Total 309 445 44.0%
Sacramento 763 1,136 48.9%
San Joaquin 451 586 29.9%
Placer 126 239 89.7%
Kern 406 461 13.5%
Fresno 494 540 9.3%
Madera 55 79 43.6%
Merced 135 153 13.3%
Tulare 211 212 0.5%
Yolo 42 48 14.3%
El Dorado 62 54 -12.9%
Stanislaus 291 451 55.0%
San Benito 27 49 81.5%
Yuba 23 48 108.7%
Sutter 31 28 -9.7%
Central Valley Tot. 3,117 4,130 32.5%
Mountains Total 110 96 -12.7%
North Calif Total 250 312 24.8%
Statewide 14,501 18,668 28

Last time I checked............defaults usually lead to foreclosure. Some of those percentages are pretty high. It's just the beginning.
Also.....I have never used the word ALL. I am merely saying [b]alot[B of people who bought in the last couple of years with ARM's etc. will not be sitting pretty. Investors won't be buying these homes that have been foreclosed on that's for sure. Who's going to buy them?
Why won't investors buy them? Confused
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Old 07-22-2006, 10:11 PM
 
1,868 posts, read 5,232,265 times
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Quote:
Originally Posted by TornadoAlley
Why won't investors buy them? Confused
Ok, why would an investor buy a home that isn't gaining in value anymore? Investors are already leaving California and going to places like Texas and Idaho. Alot of California companies are also moving to Texas because they are having trouble recruiting people to the state. Why? Affordability.
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Old 07-22-2006, 11:01 PM
 
1,868 posts, read 5,232,265 times
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Quote:
Originally Posted by TornadoAlley
I agree with you, that's too high. I would guess 33% if you asked me
From the San Diego voice:
By WILL CARLESS Voice Staff Writer

Friday, June 9, 2006 | Those of you who have been following my stories will know I’ve been placing a lot of emphasis on the large proportion of interest-only and negative-amortization loans that have been issued in San Diego and nationwide in the last few years.



The reason I’ve been harping on about this so much is pretty simple. Last year, 76 percent of the new loans issued in San Diego were either interest-only loans (in which the borrower only pays the interest on their loan for a fixed period of time, usually five years) or negative-amortization loans (in which the borrower doesn’t pay off even the full interest payment each month, meaning their debt actually grows).

In essence, the borrowers of three-quarters of the loans issued in San Diego last year are not actually paying off any of the sum they borrowed for an introductory period. Their overall debt either remains the same, or increases for that time.

The primary reason people take out these loans is that they offer much lower monthly payments than traditional amortizing loans (the ones where you pay off a chunk of your actual debt each month in addition to the interest, fees etc. over a set number of years). They allow people who can’t afford more traditional mortgages to borrow money to get their foot in the door.

But, sooner or later, those monthly payments kick up substantially as the introductory periods -- usually three to five years, run out. After the initial low-payment period, the payments can go up by several thousand dollars a month. In some cases, the payments more than double.
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Old 07-22-2006, 11:08 PM
 
1,126 posts, read 3,571,562 times
Reputation: 413
Quote:
Originally Posted by shannon94
From the San Diego voice:
By WILL CARLESS Voice Staff Writer

Friday, June 9, 2006 | Those of you who have been following my stories will know I’ve been placing a lot of emphasis on the large proportion of interest-only and negative-amortization loans that have been issued in San Diego and nationwide in the last few years.



The reason I’ve been harping on about this so much is pretty simple. Last year, 76 percent of the new loans issued in San Diego were either interest-only loans (in which the borrower only pays the interest on their loan for a fixed period of time, usually five years) or negative-amortization loans (in which the borrower doesn’t pay off even the full interest payment each month, meaning their debt actually grows).

In essence, the borrowers of three-quarters of the loans issued in San Diego last year are not actually paying off any of the sum they borrowed for an introductory period. Their overall debt either remains the same, or increases for that time.

The primary reason people take out these loans is that they offer much lower monthly payments than traditional amortizing loans (the ones where you pay off a chunk of your actual debt each month in addition to the interest, fees etc. over a set number of years). They allow people who can’t afford more traditional mortgages to borrow money to get their foot in the door.

But, sooner or later, those monthly payments kick up substantially as the introductory periods -- usually three to five years, run out. After the initial low-payment period, the payments can go up by several thousand dollars a month. In some cases, the payments more than double.
From the article.
Quote:
Now, bear in mind, that 25 percent is a nationwide figure
One person said this from a small local paper.
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