Home values still going down? Why? (Phoenix, Chandler: foreclosed, student loans, new house)

[LordBalfor]

Originally Posted by Home_Kid

i didnt say "alone", but considering a majority of Red Rock is incomplete by the builder, selling homes 50% less than just a couple of years ago is killing the values of existing homes. a large portion of "PHM foreclosures" (the homes sold through Pulte Mortgage) is due to Pulte Mortgage giving loans out to people who really couldnt afford the home. Pulte is a irresponsible greedy company and they are now fighting to stay afloat, and they are doing so by selling there shiat homes at drastically reduced prices. the downward spiral is a long way down, and for PHM (and probably others) they are still at the start of that downward spiral.

You do realize don't you that just because an ARM resets it doesn't mean the rate is going to go UP. It depends on the type of ARM. If it's an ARM tied to an index (as many ARMs are) a lot of those folks out there with resetting ARMs will actually see their payments DROP - since interest rates now are very possibly lower than they were when those folks first bought their home.

I have no idea what kind of percentage those types of ARMs are (in the total market of ARMs) but I don't think you can automatically assume that the vast bulk of soon-to-reset ARMs are going to result in higher loan payments. Now of course those folks who bought with loans featuring VERY LOW initial rates and automatic raises in those rates later on, ARE going to be in trouble - but I've never seen numbers specifically spelling out just high a percent of ARMs those types of loans make up (particularly in regard to the coming ARM resets).

Just something to consider...

Ken

[Howard Roark]

Don't forget that many people significantly increase the square footage when they move from apartments to becoming a mortgage slave. PITI(M) was more than double for me when I was a mortgage slave compared to prior to that when I rented a two bedroom place. My house was 1450 square feet, 3 bedrooms, and two bathrooms.

And yes, you tend to buy more things to fill the larger square footage.

I had a 16% increase in my pay rate the year I bought a house. I was worried about the tax increase. So I naively thought my tax savings would make buying a house worth it. I bought at the peak in 1990 in the California bubble.

I ended up spending at least twice more money than I did renting.

Actually that amount did not include the $13,000 (13% of the value of the house) I took to the table to pay the difference between what I owed on the house and what I sold it for.

Originally Posted by roosevelt

Please keep in mind that if you rent, there are no income tax deductions, assuming that you work and pay taxes. If you buy a house, you get a tremendous write off for interest, and even having an office in your house. Owning is always better than renting. At the end of the mortgage, if you are responsible and pay it off, you own a place to live free and clear and will never have to worry about having a roof over your head.

[roosevelt]

Originally Posted by Rick Lee

It's not exactly that simple. Unless you're in a 100% tax bracket, you're still paying that money. It's just that more of it is going to the bank and the county instead of to the feds. I own a house in VA and rent in Phoenix. As a renter, I really hate subsidizing homeowners via that interest tax dedeuction. Ditto for having no kids and subsidizing those who choose to have kids. I'd much rather be a renter in 2006 than have bought a grossly overpriced house that could put me upside down to the tune of six figures and then take years to be above water again. I bought my last house in 2004. When it appreciated by $100k in less than two years, yeah, I liked being a homeowner. Now I'm about even and worry every single day about my tenants skipping on me or calling me to complain about this or that needing fixed while I'm 2500 miles away.

This is not 2006 I am talking about, I'm talking about now. Prices are reasonable, mortgage payments are low interest. Just about the whole payment is a write off on income tax. My basic reasoning is that if people buy a house and pay it off over 20-30 years without constant borrowing on the equity, by the time they retire they have no rent or mortgage payments to make.

[Xica_da_Silva]

<< My basic reasoning is that if people buy a house and pay it off over 20-30 years without constant borrowing on the equity, by the time they retire they have no rent or mortgage payments to make.>>

That's my long-term strategy right there. Maybe I'm crazy; time will tell. Although, I also requested no pre-payment penalty so I can pay off early if possible.

I'm just hoping they repeal the recent property tax 'increase'(or however it's worded)! And this is a Republican governor. Strange indeed.

[Ponderosa]

Originally Posted by Xica_da_Silva

<< My basic reasoning is that if people buy a house and pay it off over 20-30 years without constant borrowing on the equity, by the time they retire they have no rent or mortgage payments to make.>>

That's my long-term strategy right there. Maybe I'm crazy; time will tell. Although, I also requested no pre-payment penalty so I can pay off early if possible.

I'm just hoping they repeal the recent property tax 'increase'(or however it's worded)! And this is a Republican governor. Strange indeed.

I hope they don't (repeal). Brewer surprised me with her insight. I might even vote for her if she keeps it up. We had better start paying attention to education, amenities, and infrastructure in Arizona or our homes are going to be worthless when all we have left here are retirees and tourists and the illegals who tend them. Can you say "Florida"?

[roosevelt]

Originally Posted by Xica_da_Silva

<< My basic reasoning is that if people buy a house and pay it off over 20-30 years without constant borrowing on the equity, by the time they retire they have no rent or mortgage payments to make.>>

That's my long-term strategy right there. Maybe I'm crazy; time will tell. Although, I also requested no pre-payment penalty so I can pay off early if possible.

I'm just hoping they repeal the recent property tax 'increase'(or however it's worded)! And this is a Republican governor. Strange indeed.

Good thinking. I had a 30 year mortgage and added only 10% a month to the payment and it payed off in 20 years. No matter what happens though you have to make that 10% extra payment each and every month.
Property taxes are a variable, someone has to pay for the schools, but if you rent you are paying the property taxes for the landlord anyway.

[asufan]

Originally Posted by roosevelt

Good thinking. I had a 30 year mortgage and added only 10% a month to the payment and it payed off in 20 years. No matter what happens though you have to make that 10% extra payment each and every month.
Property taxes are a variable, someone has to pay for the schools, but if you rent you are paying the property taxes for the landlord anyway.

That's my plan as well. Luckily for me, after I refinanced from a 6.25% interest rate to 4.675% back in January (both 30-year fixed), the payment went down so much that I just pay a small amount more than the original mortgage payment before I did the refinance, and it will be paid off in 15 years, and I will be just turning 50. Such a novel concept. Should make retirement much easier.

[Ponderosa]

Originally Posted by asufan

That's my plan as well. Luckily for me, after I refinanced from a 6.25% interest rate to 4.675% back in January (both 30-year fixed), the payment went down so much that I just pay a small amount more than the original mortgage payment before I did the refinance, and it will be paid off in 15 years, and I will be just turning 50. Such a novel concept. Should make retirement much easier.

I bet you go out and buy a new house with a new, higher, mortgage in the next 5 years. Really, how many people around here have the same house and loan they had when they were young? 30 yo neighborhoods here are ghetto with but a few exceptional areas that first time buyers can't afford.

[poolgirl51]

Originally Posted by Ponderosa

I hope they don't (repeal). Brewer surprised me with her insight. I might even vote for her if she keeps it up. We had better start paying attention to education, amenities, and infrastructure in Arizona or our homes are going to be worthless when all we have left here are retirees and tourists and the illegals who tend them. Can you say "Florida"?

I can't rep you again but you hit the nail on the head. Having moved here from Florida I saw it first hand. I am a 2nd generation native Floridian and it is so sad to see what that state has become.

[ArcticPhoenix]

Originally Posted by jwest09

I noticed on Zillow, that the valleys home values are still going down thousands each 30 days. How long does anyone think this trend will last and when they think it will stabilize? Other western states home prices are on their way back up, at last.

It will continue until people can afford a home! If people can't afford something, they don't buy it... well okay here in America we do because we have credit but that has stopped... so prices will continue to slide until they probably reach 1.5 - 3 times the average income...