The housing market is going to get worse? (2014, 3%, investment)
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Banks do NOT want to own real estate. They want to finance real estate. We are talking current events here; the foreclosure crisis, recession, misinformation about where and which foreclosure pot boiled over first. Not government bank regulations which takes this off topic. You can talk to Barney Frank and Chris Dodd on that subject. Let's not get BayArea-girl any more confused at this point.
I was nit-picking your wording. Banks do not want to own real estate but they want to be in real estate. (Your first post said banks do not want to be IN real estate, your second said they do want to OWN real estate-2 very different connotations.)
The reality is that it is inevitable that the market will continue to reflect that of a depression (or recession if you are naturally an upbeat person and want to look at it from a positive view point), and it will be a while.
From a Real Estate Appraiser view point, buyers have plenty of time to shop, and depending on one's personal agenda and finances. However; overall, shoppers will have plenty of time to look around.
I think a lot of the data driven articles do not adequately represent the area the writers opine about. When i challenged the Forbes Editor about one of those authoritative articles Forbes publshed, he admitted none of the staff actually visited the area. He was surpirsed at some of the facts I offered that directly countered Forbes content.
As to housing market I suspect every area of the US is different from another. A heavily populated area is as different from a farming area as it is from a coastal second home/vacation area. As far as I am concerned where I lived the bust began in the 1990s when housing sales were upside down - meaning houses were being financed at amounts that far exceeded their actual fair market value in a normal market. My gauge has alway been the 1 bd 1 ba home that sold for under $50K for 30 years. When the average price of that house junped to $80K in 90s I knew it could not last; the market was not sustainable. I knew when the maket began to right itself it would be messy, but I never dreamed it would have such a far reaching global affect, nor could I predict there could be as many as 40M houses in foreclosure and the banking system in complete disarray.
The next problem I see in the Midwest (high humidity and extremem temperatures) is the houses that have been empty for long periods with no utilities (heat/ac) on may be very unhealthy and actually unfit for human use. If the government turns a blind eye as it is wont to do I can easily see a generation of sick kids and insurance rates going through the roof.
It is hard to compare IL banks as they can be federal or state; they seem to have different a set of standards, but this may not necessarily be true. I've seen a fair anount of small bank merges that picked up bad assets to keep little banks in isolated farm communities. I would personally rather do buiness with a small home owned bank because they are far more cautious about home loans, they don't usually play house in hedge funds, and very often they carry their own paper. They also do not take a loan unless the buyer has 15-20% down plus closing costs at hand.
Some banks only do a 3-year ARM and some do a 20-30 yr. fixed. I took a 3yr ARM because I did not have a choice and rollled it into a 30-yr fixed in the second year. It was a good deal and I didn't lose much money on it.
I think a lot of the data driven articles do not adequately represent the area the writers opine about. When i challenged the Forbes Editor about one of those authoritative articles Forbes publshed, he admitted none of the staff actually visited the area. He was surpirsed at some of the facts I offered that directly countered Forbes content.
If an individual has a question about movable assets -- when an individual invests in the bond market, stock market, a commodity, and the similar -- they sit in their 'sweet' executive office, make a trade, and write an article -- they can be dead-on-balls accurate.
Accounting how the movable markets are being affected by the overall scope of the economy, or how the movable markets are affecting the economy, they actually have an authoritative position to boast, then showcase.
Real Estate is where "Wall Street" stumbles; when the facts and history about Real Estate come to light. Wall Streets' problem (within the context) lay with the fact they cannot come to grips, according to reality, in not being the authority figure in Real Estate. Their opinions lack the competence, (in particular), the geo-competency that is crucial in valuating - logically - after identifying the underlying problem, in which they also fail to acknowledge and/or understand. In addition to the reality, Wall Street has had a history in contributing to the adverse conditions, in lieu of economic crisis', in which Real Estate was the driving force, or the clear (concise) instigator.
Wall Street likens Real Estate to a movable; an everlasting 'crush' to compliment an influential hand in attempting to 'bank' on it, per say --seeking to capitalize on their own denial embedded in its ignorance -- creating monopolies from the extension of their own "hand," and forcing an authoritative persona onto economic behavior -- a perception that Real Estate is movable (via models of deception). Wall Street mentality is accredited with the movement of Automatic Valuation Models (AVMs). AVMs delve into data mining, a strip mining of Real Estate, which portrays a poster child for the ultimate manipulation of supply and demand, as well as the crux, organization of data and information; centralization of immovables for power and profit.
Companies, and the similar, like Zillow, are currently giving Wall Street mentalities analyses, as well as "predictions" of the state/health/value of the Real Estate market. An organization of data, via mining (stripping) of Real Estate, influences websites such as "C-D" whom are benefiting from social technology. The "Gold Standard" is taking hold to a different and dangerous meaning these days. In order to centralize Real Estate: economic behavior, thus supply and demand, must be manipulated, and the population must be sold on the perception that 'models of deception' can be part of the new Gold Standard. Companies like Zillow, and the similar, are detrimental to the health of the Real Estate market, thus the economy. It Appears that some Wall Street 'figures' are investing in these false prophets -- this behavior will eventually result in an economic crisis that will make the current one look like a small blip in history.
Wall Street may admit the flaws, but it will not stop them from attempting to convince others their analyses are accurate. If Wall Street wanted to know the truth, look at a credible analysis, and report reality, then it would be obvious to seek out consultation from the analysts on the ground who are trained/educated/experienced, to deal with such concerns. Instead, they continue to inject and run their numbers through a deceitful process, and then report their findings, which ultimately represent the "Wall Street" mentality of greed, power, and authority from afar, beyond their realm of specialization.
Wall Street should stick to their own markets; leaving the performance of Real Estate market analyses/analysis', the reporting of value, and reconciliation of the health of the asset, to the experts.
Last edited by Greeenback; 05-21-2011 at 09:51 PM..
Greeenbeck I agree with what you say. The problem is we seem to have one big orchestra and no conductor. Between 1949 -1981 my mother hed a real estate license. i was her secretary from 4th grade thru college. We talked about real estate deals, bad actors, bad broker/owners, and why deals went sour every day until she died in 2002. Way back then realtors had 'moral turpitude" and savings banks did not make home loans. There were no ARM or no-money down loans, no "shaky credit" loand and title companies were closely scrutinized.
In 2005 through esearch I became aware that the four largest real estate companies in America were held by an off-shore company that did not conform to US laws. Two years later I became aware that local boards had no control over realtors. Its function is to educate. I learned this after I contracted with a national company that had the license of a rogue realtor hanging on the wall.
NO ONE can predict what the housing market or the current interest rates will do tomorrow, next week, next year or 10 years from today. I still think recovery will be a slow messy process to clean up in most areaa until all the agencies involved are on the same page and it when it does it will be much better for all concerned. However I do not see this happening very soon.
An opinion is what it is: a view of something that is not necessariloy based on fact or knowledge.
The opinions in this forum are multi-faceted. The members are from different states, different regions of the country, different economies, different demographics, etc., and we all have different experiences. i cannot say anyone else is right or wrong. i can only speak of my own experiences where I lived at a particular time in my life.
I actually agree with most of what you are saying.
Apart from our political differences (my view that people without papers do not deserve to be called illegals) we actually see eye to eye on a lot of things economically.
The real estate market is very challenged and the system is rigged by the guys at the top.
The real estate market is in bad shape and not getting better anytime soon. There are certainly deals to be had but there will be more deals for the next few years. We may not hit bottom until 2014-2015, maybe.
I have said this before but nationwide (even in the small farming communities that you mention like the one I grew up in in southern Indiana) prices have gone down and are not looking to recover anytime soon.
Land prices have continued to go up for production agriculture but much of this is fueled by the corn bubble going on caused by ethanol and commodities bubble. We may be 1-2 years away from 10k per acre land in places like Iowa and Indiana.
Once people figure out that ethanol is not a good solution and that it wastes energy we may see a sharp drop in the price of corn and subsequently other commodities (wheat, soybeans, etc).
Apart from land prices, RE in rural communities are not going up. They may not be down 50-60 percent like some bubble area but in the past 10 years they have gone sideways, some down.
Thanks to the beyond-imbecilic Dodd-Frank law, the housing market will definitely get worse, and here are a few reasons why that's a foregone conclusion.
Under that boneheaded piece of regulatory overkill, getting a QRM (qualified residential mortgage---doncha just love legislative gobbledygook?) will mandate a 20% down payment; potential homebuyers without that 20% DP could face a 3% boost in their interest rate and assorted fees according to the NAR, and a 2% boost in those fees according to the NAHB.
This mandate will exclude millions of Americans without huge cash reserves from ever being able to buy a house, many of whom are creditworthy; that mandate will also result in a mass exodus from the home lending industry for community banks from coast to coast.
To read the rest of the sickening details, please go to Welcome to HomeSolutions.com, and read Robert Lusk's blog entry dated May 9, 2011; it's bound to make you even more furious, since it was the deliberate gutting of underwriting standards by Mr. Frank & other clueless Democrats, and not low down payments which initiated the housing collapse, and the international financial meltdown which followed in lockstep.
Thanks to the beyond-imbecilic Dodd-Frank law, the housing market will definitely get worse, and here are a few reasons why that's a foregone conclusion.
Under that boneheaded piece of regulatory overkill, getting a QRM (qualified residential mortgage---doncha just love legislative gobbledygook?) will mandate a 20% down payment; potential homebuyers without that 20% DP could face a 3% boost in their interest rate and assorted fees according to the NAR, and a 2% boost in those fees according to the NAHB.
This mandate will exclude millions of Americans without huge cash reserves from ever being able to buy a house, many of whom are creditworthy; that mandate will also result in a mass exodus from the home lending industry for community banks from coast to coast.
To read the rest of the sickening details, please go to Welcome to HomeSolutions.com, and read Robert Lusk's blog entry dated May 9, 2011; it's bound to make you even more furious, since it was the deliberate gutting of underwriting standards by Mr. Frank & other clueless Democrats, and not low down payments which initiated the housing collapse, and the international financial meltdown which followed in lockstep.
your link didnt work. here is an article about the topic, written by a few NAR senators who seem to generally support your point of view that we should continue to pay for the current risky, federally subsidized mortgage system.
on a side note the article claims it would take the typical American family 14 years to save up for a 20% downpayment.
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