Has the bottom hit? (Phoenix, Scottsdale: foreclose, credit, loan)

[Phoenix lady]

I heard Suzy Orman say (maybe 4-5 months ago) that January of 2009 would be the "bottom" and from that point, things would start, slowly, going up in regards to the housing market. Whether or not this is true... She does seem to understand financial issues pretty well from what I can tell from watching, occasionally, her program on MSNBC.

[LBear]

Originally Posted by azjack

I am glad that your family is full of multi-millionaires who made their millions from ME renting during the great Phoenix housing bust of 2006-20??. People like ME. That's it, you frightened me and now I must buy or I will have to live with a scarlet R. I'll ignore the likelihood that the house will drop in value another 20% this year.

Look, life is full of risks. The people who succeed in this world are RISK TAKERS. The majority of wealthy people got there by taking RISKS. If you don't want to, then fine, nobody is forcing you. When you study the mentality of the people who succeed in the business world, they must take risks.

If you want to be secure in renting and never owning your own home. That is your life and your decision. Trying to use FEAR to keep people from investing is wrong. My family came from Europe and HAD NOTHING when they came over. We lived in apartments and they worked 2 jobs. They knew that rentals were NOT a long-term wise decision as the money was paying someone else's mortgage. When they saved their money, they took RISKS and bought rental properties and the situation reversed and had people like YOU, pay their mortgage. Now, they are in their 50's and 60's and multi-millionaires. They worked hard and took risks. There were people like you who tried to scare them and told them not to buy real estate. If they listened to them, they would have ended-up like them, living in a run-down apartment, 50 years old, living check to check, driving a beater car and crying doom & gloom at every turn.

I know some people like you, they have resentment towards people who invest and buy real estate, they do not take risks. If that's want they want, then more power to them.

Also, your math skills are atrocious. If home values fell 50% already, now you are predicting another 20% drop this year, for a total of 70% drop. Then a $400K home will now be worth $120K. With your "analysis", this home will drop another 20%, and in the end will be worth $40K two years from now.

If that is the case, which it is NOT, the entire USA will collapse and the government will collapse. Complete anarchy will take over and the USA will cease to exist. In that case, who cares in the end, we are ALL doomed.

[CouponJack]

Originally Posted by LBear

I know some people like you, they have resentment towards people who invest and buy real estate, they do not take risks. If that's want they want, then more power to them.

.

Your argument is misdirected here. No one is saying to NOT buy real estate. Hell, if I had the cajones I would've bought properties years ago and would've tried to go at it that way......

The argument is whether its sensible to buy NOW. Many markets have come back to historical pricing levels when you take inflation into account (which is historically the average appreciation level of resi RE).

[azjack]

"I know some people like you, they have resentment towards people who invest and buy real estate, they do not take risks. If that's want they want, then more power to them."

Um, I owned a house two and a half years ago, so why would I resent someone who buys a house? I am simply trying to help people avoid a big financial mistake by buying a declining asset like Phoenix real estate in 2008.

"Also, your math skills are atrocious. If home values fell 50% already, now you are predicting another 20% drop this year, for a total of 70% drop."

You made my day with this one. You are attacking my math ability, and then you state that a 50% drop followed by a 20% drop equals a 70% drop. Guess what? It does not.

A $100K house (or painting or whatever) that declines by 50% is worth $50K. A 20% drop from $50K would make it worth $40K. So, a 50% drop followed by a 20% drop would actually be a total 60% drop.

"If that is the case, which it is NOT, the entire USA will collapse and the government will collapse. Complete anarchy will take over and the USA will cease to exist. In that case, who cares in the end, we are ALL doomed. "

And you call folks who recognize this housing crash for what it is "doom and gloomers." If your Arizona single family house is worth in the $100K range, the United States will cease to exist? Wow, that is an interesting way of viewing the world, I have to say.


Perhaps you should give up on bashing my ability to calculate percentages and stick to your strengths. Perhaps you should elaborate on your anti-Catholic bigotry over in the Religion Forum.

[artvandelay]

I too bought an overvalued house. I knew it was overvalued (based on avg local incomes) but not to the degree it was. I mistakenly thought things were about 10% overpriced, but not 40%! So, my house, originally listed at $350K, reduced to $305K, and appraised at $315K, I purchased for $281K. Only now, it's estimated worth is about $220K.

You don't need a crystal ball, especially if you have the context of history and other markets. It's not easy to know what the housing market will do (I considered myself informed but still paid too much), but that's why fixed loans and 20% down are smart, so an unexpected downward value doesn't cripple you.

[twiggy]

Originally Posted by Ponderosa

Hindsight is 20/20, they say. Lots of armchair experts out there who saw the bubble all along now. I am watching CNBC this AM and see the parade of experts all going on about how the oil price which has gone through the ceiling the past two days is due to supply and demand fundamentals, growth in Asia etc. etc. They said the same thing about homes - the demand is real, they are not making any more land and about the dot.com - the future is the internet. Wrong, wrong, and wrong again. It won't help your bottom line, but you're in good company in misjudging a speculative bubble from the pedigrees of some of these talking heads.

Yes, I use to be glued to the news now I don't really watch it anymore. It's like a bad reality show without the reality. XD After about 10 min. of what the "so called" experts have to say while they contradict themselves I'm about through. It seems we have just a little too much information in this age. It's like a bad rumor. It gets really distorted along the way. I think Artvandelay has a point, next time around I'll buy 20% down and fixed. That is if I can ever get out of my ARM. Right now I'm trying to just enjoy AZ, enjoy the house and kids, go swimming and forget about it. Like you've said before Pond. I'm realizing that I might be here for a while, might as well look on the up and up. For anyone interested my house was appraised at 400,000 when I bought it, I bought it from my father at 250,000 with 18,000 down on a ARM because of self employment. My neighbors are now selling similar houses and bank owned for 230,000 to 270,000. I haven't gone below what I owe yet, but it's getting there and I sure won't have the equity I saved for 5 years and put down to get in here. I had to do the move for other reasons though so I have no regret. Just wanted to see why I was so blind, what I missed. This insight has cleared it a lot for me. Thanks

[LBear]

Well, I have to disagree completely with AZJACK. I believe NOW is the time to buy in CERTAIN MARKETS/cities. Don't let fear be the motivation behind your decisions. Nobody knows for 100% certainty when everything will turn around. It's a RISK and if done right, will be very rewarding in the long run. Don't let the pessimism of some stop you from making an investment.

[markas214]

If now is the time to buy then next year, 2010, 2011 and 2012 will be just as good. There is no way appreciation will increase beyond wages for the next five years in bubble markets.
The question should be if levels of historical afforability have been reached. We're getting close in the outlying areas but the close in areas remain well above historical norms. My wife and I own in Pa, well 50% equity anyway and when we move to Az will earn more than triple the median household income but still find places like Scottsdale way overpriced. $400k for a 50 year old fixer with a nice lot and pool is not something I'd consider purchasing. We'll be lowly renters for a year or two or buy a house north of the 101 that's bigger and newer than Scottsdale's offering in the same price range.

[markas214]

Originally Posted by twiggy

Yes, I use to be glued to the news now I don't really watch it anymore. It's like a bad reality show without the reality. XD After about 10 min. of what the "so called" experts have to say while they contradict themselves I'm about through. It seems we have just a little too much information in this age. It's like a bad rumor. It gets really distorted along the way. I think Artvandelay has a point, next time around I'll buy 20% down and fixed. That is if I can ever get out of my ARM. Right now I'm trying to just enjoy AZ, enjoy the house and kids, go swimming and forget about it. Like you've said before Pond. I'm realizing that I might be here for a while, might as well look on the up and up. For anyone interested my house was appraised at 400,000 when I bought it, I bought it from my father at 250,000 with 18,000 down on a ARM because of self employment. My neighbors are now selling similar houses and bank owned for 230,000 to 270,000. I haven't gone below what I owe yet, but it's getting there and I sure won't have the equity I saved for 5 years and put down to get in here. I had to do the move for other reasons though so I have no regret. Just wanted to see why I was so blind, what I missed. This insight has cleared it a lot for me. Thanks

Get an 30 year fixed FHA loan. You're in a lot better shape than most who bought two or three years ago.

[markas214]

Originally Posted by LBear

It's a RISK and if done right, will be very rewarding in the long run. Don't let the pessimism of some stop you from making an investment.

Most people buy houses to live in. There are way better things to invest in than your house. Buy a house to reside in not as your retirement account. Max out your IRA, 401K, etc. Buy something affordable. Don't put all your diposable income into a mortgage. You'll retire with an old house and no income.