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Old 03-08-2012, 02:39 PM
Status: "Internet Butthurt is Real!" (set 2 days ago)
 
Location: 10 Years Later from ...
7,808 posts, read 5,222,073 times
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Quote:
Originally Posted by bowian View Post
Well, you may want to come up with another real life example. Have you seen the photos of the Ritter home? From what I saw, it was actually fixed up on the inside and outside. In fact, I found it ironic that they were in trouble financially practically from the point they moved in, yet they apparently had enough money to decorate it quite nicely and to maintain the interior. Are the Ritters taking advantage while other, more needy homeowners in less expensive homes losing out? Yes. Should they get out? Yes, although they apparently feel they have little to nothing to lose. Have they contributed to the destabilization of their neighborhood in the five years they have been there? Actually, as it stands now, no.
But the point was they were not able to pay for that home. There's a difference between having money and affording your home. If I can't afford something that doesn't mean I don't have any money. $7,900 is a lot of money per month. Don't you think if you had half that free, $3900 to spend on whatever, you could fix a home up? Clearly they had money, but not enough to afford it, otherwise I doubt they would have gone to foreclosure.

Quote:
Originally Posted by bowian View Post
Now, once they are out, then I suppose the home will go into disrepair and remain on the market for months until the price drops enough for someone to buy it. Not all foreclosures that come on the market quickly are going to sell quickly. I didn't exactly see any of them being snatched up like hotcakes. If PG were to do it the way PW does it, would PG recover the way PW did? I am skeptical.
We will never know. If it would have helped. And to answer you first point, when they had the first-time home buyer programs, foreclosures were going like hotcakes, actually. A lot of times my wife and I had to leave directly from work to see a place or else it would be gone and that included even the properties in bad condition (mold, significant damage done). Usually the price, the programs and the locations was what determined how quickly they sold.

Quote:
Originally Posted by bowian View Post
As for your previous point about PW, you mention the better schools and the lower crime. Perhaps PW was in a better shape to recover from the housing crisis with the help of those advantages, no? So, are we really comparing apples to apples?
Well that wasn't exactly my point. My point was PW can sustain their value because of those things. allen2323 stated that basically the value was going to go back down and my point was PW could hold an increase better than PG because of those reasons. I'm not necessarily comparing the two in that instance. To me it's not really going to be that easy to get that kind of increase here unless the 'essentials' improve.

Quote:
Originally Posted by bowian View Post
What are the recovery rates for the rest of Maryland, given this "woefully slow" foreclosure process? Isn't PG still lacking behind other Maryland counties in its recovery? Is the answer really the slow process or are there other factors, previously discussed in the PG foreclosure thread?
It's both in my opinion, they wouldn't have as slow of a process if it wasn't so many of them too.
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Old 03-08-2012, 02:53 PM
 
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Quote:
Originally Posted by pgtitans View Post
But the point was they were not able to pay for that home. There's a difference between having money and affording your home. If I can't afford something that doesn't mean I don't have any money. $7,900 is a lot of money per month. Don't you think if you had half that free, $3900 to spend on whatever, you could fix a home up? Clearly they had money, but not enough to afford it, otherwise I doubt they would have gone to foreclosure.
Actually, your point included a question about whether allen2323 would prefer someone coming in sooner to "fix up" the home. So you mixed together affording a home and fixing up a home yourself to start. Now the bank that gave them the loan on that house apparently thought they could afford. I am curious as to how the bank reached that conclusion.


Quote:
Originally Posted by pgtitans View Post
We will never know. If it would have helped. And to answer you first point, when they had the first-time home buyer programs, foreclosures were going like hotcakes, actually. A lot of times my wife and I had to leave directly from work to see a place or else it would be gone and that included even the properties in bad condition (mold, significant damage done). Usually the price, the programs and the locations was what determined how quickly they sold.
I didn't see any real quick movement where I live, or the surrounding areas. But there are a lot of higher-priced homes and developing subdivisions around here, so that may have impacted things.

Quote:
Originally Posted by pgtitans View Post
Well that wasn't exactly my point. My point was PW can sustain their value because of those things. allen2323 stated that basically the value was going to go back down and my point was PW could hold an increase better than PG because of those reasons. I'm not necessarily comparing the two in that instance. To me it's not really going to be that easy to get that kind of increase here unless the 'essentials' improve.
Yes, but your point can easily be applied to the recovery, especially taking into account your last sentence above. We'll see what happens in PW; hopefully it can and will maintain.
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Old 03-08-2012, 06:07 PM
 
Location: Maryland
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The median price of PG homes for sale is about 100K lower than PWC. This is not a dead cat bounce. Prolonging foreclosures is harming the county's rebound. PG can rebound if prices are allowed to reach firm footing even with poor schools.
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Old 03-09-2012, 12:12 PM
 
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Quote:
Originally Posted by EdwardA View Post
I've made this point before and it's nice to see it confirmed by the Washington Post. Part of the reason why PG's housing market is in the duldrums is because our state is run my liberal Democrats who view market interference as a good thing. Foreclosures should be sped up and the inventory cleared out as fast as possible so a floor in prices can be reached.
I agree 100%. Another issue is this just isn't PG this is the entire nation. Historically home values were 1.5 to 2x the income of the borrower. When the government started backing up FHA loans/3.5% down it actually forced home prices to go up and increased the likelihood of foreclosures exponentially. If the government never started these stupid programs home values would maintain their values, only those who could afford a home would buy one, and the bubble would have never formed. The reason we have so many issues with our economy is because too much money is tied up into real estate. People would have so much more available income if the government didn't fight the free market and force home prices through the roof.
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Old 03-09-2012, 12:16 PM
 
Location: It's in the name!
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Quote:
Originally Posted by mdfrommw7 View Post
I agree 100%. Another issue is this just isn't PG this is the entire nation. Historically home values were 1.5 to 2x the income of the borrower. When the government started backing up FHA loans/3.5% down it actually forced home prices to go up and increased the likelihood of foreclosures exponentially. If the government never started these stupid programs home values would maintain their values, only those who could afford a home would buy one, and the bubble would have never formed. The reason we have so many issues with our economy is because too much money is tied up into real estate. People would have so much more available income if the government didn't fight the free market and force home prices through the roof.

That is the most sound and agreeable argument I've heard on this issue to date. Excellent points!
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Old 03-09-2012, 12:36 PM
 
Location: Maryland
17,361 posts, read 7,752,072 times
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Quote:
Originally Posted by mdfrommw7 View Post
I agree 100%. Another issue is this just isn't PG this is the entire nation. Historically home values were 1.5 to 2x the income of the borrower. When the government started backing up FHA loans/3.5% down it actually forced home prices to go up and increased the likelihood of foreclosures exponentially. If the government never started these stupid programs home values would maintain their values, only those who could afford a home would buy one, and the bubble would have never formed. The reason we have so many issues with our economy is because too much money is tied up into real estate. People would have so much more available income if the government didn't fight the free market and force home prices through the roof.
Amen but unfortunately Obama is doubling down on interfering with markets look for things to get worse.

Obama unveils new foreclosure measures to resuscitate housing market - The Washington Post
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Old 03-09-2012, 12:55 PM
Status: "Internet Butthurt is Real!" (set 2 days ago)
 
Location: 10 Years Later from ...
7,808 posts, read 5,222,073 times
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Quote:
Originally Posted by EdwardA View Post
Amen but unfortunately Obama is doubling down on interfering with markets look for things to get worse.

Obama unveils new foreclosure measures to resuscitate housing market - The Washington Post
Last year, there was also legislation passed to push more short sales on the market and to avoid foreclosures. It got very little publicity, but it just goes to show you that there is too much interference going on by the government. Let's be honest, for Obama he doesn't want the foreclosure rate to spike on his watch. This isn't about fixing the problem as much as it's about being able to manipulate numbers in order to using it as a campaign ploy. See foreclosures are down across the country. But is that really helping?
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Old 03-09-2012, 02:40 PM
 
318 posts, read 201,252 times
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Quote:
Originally Posted by mdfrommw7 View Post
I agree 100%. Another issue is this just isn't PG this is the entire nation. Historically home values were 1.5 to 2x the income of the borrower. When the government started backing up FHA loans/3.5% down it actually forced home prices to go up and increased the likelihood of foreclosures exponentially. If the government never started these stupid programs home values would maintain their values, only those who could afford a home would buy one, and the bubble would have never formed. The reason we have so many issues with our economy is because too much money is tied up into real estate. People would have so much more available income if the government didn't fight the free market and force home prices through the roof.
Youíre on the right track. However, I donít think that FHA loans are the main reason that the housing market crashed in this country. The increase in subprime lending had much more to do with why real estate prices skyrocketed in the mid-2000ís than what the FHA was doing. During this time, most of the people receiving subprime loans opted for the adjustable rate mortgages which had extremely low interest rates to get you started. This in turn allowed folks to qualify for more expensive mortgages when under normal circumstances they wouldnít even have qualified for an FHA loan. This is one of the major reasons that home ownership jumped from 66% to over 69% in about 7 short yrs. In 2006, 90% of the loans in the subprime sector were ARM loans.

With the supply being outpaced by the demand, real estate prices boomed along with the construction on new housing developments. It all came to a head when the adjustable rates on all of these new mortgages came to term. People began to realize that they were living in homes that they couldnít afford when the interest rates on their $450,000 home went from 1.5% to 9%. That kind of rate jump changes the monthly payment dramatically. This is why the term predatory lending was thrown about so often because people were claiming that they werenít aware that the rate jump was going to be so dramatic (I donít know how they didnít know this, but thatís a separate issue).

So, while I do agree that this is a nationwide issue, I wouldnít put it all on the FHA programís shoulders.
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Old 03-10-2012, 11:44 AM
 
64 posts, read 65,740 times
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Quote:
Originally Posted by EHCT View Post
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So, while I do agree that this is a nationwide issue, I wouldnít put it all on the FHA programís shoulders.
I agree with you on this. I know Fannie/Freddie owned a lot of the subprime debt and they are subsidized by the government. Ultimately I think government subsidizing this mess ultimate led to the bubble busting. With no government guarantees (FHA, Fannie/Freddie subsidies, bailouts, FDIC) the public would be forced to make informed decisions regarding real estate and investing. With guarantees in place the risk is minimized and folks start to do unnatural things to capitalize on the irrational market in exchange for a quick buck.
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Old 03-10-2012, 12:20 PM
 
829 posts, read 1,132,740 times
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In the case of PG county. You are talking about an area where median incomes are higher than the national average. And home ownership is still relatively affordable. Rents are not necessarily cheap in PG county showing that there is a strong population demand for housing. Home ownership will remain high and the market will find a bottom just on the fact that overall median incomes are fairly high in PG county. Woodmore for example has a median family income of about 200k. Current median home sales prices in woodmore are around 350k. Which is about 1.75 times median family income. Well off of the 2006 highs of 500k. In lower income areas where home ownership is already low and likely to decrease further. You will likely see home values find there bottom around a reasonable Price-Rent Ratio. As property values in low home ownership neighborhoods tend to be pegged more to the Price-Rent Ratio. The higher the rent the higher the property values. As most of the buyers are investors.

Last edited by allen2323; 03-10-2012 at 12:55 PM..
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