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Real estate market collapse, no documentation loans, stated income loans, real estate market prices bottoming out over next 3-7 years, housing price adjustments
gotta disagree with you here. Back in 2003 I knew what was going on, new when it was going to happen and how it all was going to play out. So did Nourel Roubini, Eric Janzen and Schiff and countless others. The info was out there and had people done their research back then they wouldnt be in shock and awe now.
Gotta disagree with you! 100 people could look at the same research data and draw 100 different conclusions. You just happen to include yourself in a group that saw things more or less the same way. Perhaps numbers don't lie as the saying goes, but they can be, and they are interpreted according to an individuals bias, predudice, training, and other factors.
One of my degrees is in International Economics. I don't look at data and use my imagination and fairy dust to come to economic conclusions and neither do the people I named. As I said, from 2003 till now they have been DEAD ON every step of the way. There are TONS of people, not just the ones I named who have been spot on. Once you understand economics, its very clear and plain to see. As I said, i feel bad for no one. The info was out there.
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Originally Posted by goodbyehollywood
I don't think anybody really knew when this was going to happen or exactly how it was going to play out. The writing may have been on the wall, but it didn't give the date.
Not all homeowners are in trouble or take a short-term view. I plan to hold my properties for 15 or 20 years, let my tenants pay off my mortgages and retire on whatever I can sell the properties for at that time. I didn't buy at the peak and I won't sell at the valley. I don't need to sell and I certainly won't sell at an arbitrary amount set by a buyer who considers the media their financial guru. If so many buyers hadn't gotten in over their heads with those too-good-to-be-true loans, the market would be finding a floor, because sellers would simply say "no" and not fire-sale their homes because a buyer thinks they should. But homeowners borrowed foolishly and now we're dominoing.
I agree that we're not at a bottom and won't be until all the Option ARMS and weak Alt-As are flushed out of the system. Of course, the bailout is going to prolong the process by propping up borrowers who will eventually capitulate anyway. So the fall won't be parabolic, but it will take longer to bottom. So if you know when that will be, please let us know.
If you actually understood economics and followed it you would see that your assertions are 100% incorrect. Just do research on Roubini, Eric Jenzen, Schiff. Those are just three of MANY economist who were 100% accurate. Do research instead of assuming. Assuming is why many people find themselves in such odd situations wondering why they went in the wrong direction.
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Originally Posted by GeminiGal
So what your saying is that my family (and MILLIONS of others) should have listened to these Gods of Wisdom, 5 years ago, and sat our hands waiting for the RE bubble to burst. Sorry, but LIFE doesn't happen this way.
You sound all too happy that ALL homeowners are going to suffer for what a handful have done. I did say that my home isnot my BIGGEST investment - but it still is an investment. It's my family's hard earned money that went into purchasing that home.
happy, not at all. I am also not sympathetic to willful ignorance. If people don't want to do research and if "life doesn't work that way". Then don't sit here crying about your outcome. It could have been avoided. What I do care about though is bailing willfully ignorant home owners out via my tax dollars. I think that's utter crap to say the least. I am all for helping those in need given situations beyond their control. Not researching is something that IS in a persons control. I don't mean to offend, this is just my opinion.
Not researching is something that IS in a persons control. I don't mean to offend, this is just my opinion.
I guess your right - I should have just RENTED - in a crime ridden, crappy schools, drug infested neighborhood. My kids don't deserve a home. I'm so reckless in my lack of research of the RE bubble that I have failed my family financially. I should have listened to the Gods of Wisdom. How stupid and financially reckless of me.
I guess your right - I should have just RENTED - in a crime ridden, crappy schools, drug infested neighborhood. My kids don't deserve a home. I'm so reckless in my lack of research of the RE bubble that I have failed my family financially. I should have listened to the Gods of Wisdom. How stupid and financially reckless of me.
Offended? Heck yeah!
You are becoming defensive on something I never said or implied.
1. I have lived in three states and five counties and in NO city I have seen has there not been apartments in decent areas. So I think you are being a bit on the overly dramatic side here. I am willing to bet you could have found a nice apartment in a nice area. The problem was you wanted a home, and that's fine, be happy with your decision. Don't expect sympathy because your home is losing value. You should have researched the situation. Let me spell this out so you don't insinuate some other meaning. Let say you did research early on. You saw what was coming, but you decided you WANTED a home and a backyard. You go in, buy a home and your happy with the outcome. You bought it knowing full well what is coming. No harm, no foul.
2. Your not a bad mother, you wanted to provide a house for your kids. Shows you love them nothing wrong in that.
All I am saying here is. These home owners who didn't research and are now in a tizzy about falling home prices need to stop crying. Besides, no turning back now. Just prepare for the long haul and I hope the best for everyone.
Well, I think it really depends on what part of the country you're in. On the West Coast, housing prices had soared to insane levels over the past 15 years, not just the past 3 or 4. It was like the Dutch Tulip Craze.
Case in point? My brother bought a 2-bedroom, 1-bathroom 1920s house in a nice section of LA in 1994 for $300,000. Ten years late in 2005, he put it on the market for $925,000 and got five offers in several hours. People bid it up past the $1,000,000 mark. Now this is for a TWO-BEDROOM house convenient to downtown. Somebody tell me how people just starting out in those areas were going to afford their starter homes at these levels. Eventually, at these price points, the demand level was bound to drop to zero.
The signs of a bubble were there for everybody see for the past several years. When I kept seeing some geographic markets chalking up double-digit increases every years, you knew that something had to give somewhere. But the speculation was mostly virulent in the West, the Northeast, and South Florida. If you look at areas where home values gained a steady 5% or so a year, the fallout hasn't been nearly as bad. And if you look at the foreclosure rates, the real bloodletting follows the same geographic footprint.
Of course, a lot of this was also driven by speculative homebuilding. I market 15 different developments and, around 2004-2006, I always felt as if I were the angel of death at the meetings with the clients. In 2006, I lost two accounts because I told them to stop building $400K + houses, and concentrate on the $200,000 market, or stop building entirely. Given what meatheads most builders are, you can guess that they just kept on erecting houses. That's why, according to the national association of home builders, 20% of the guys building houses in 2006 are out of business and bankrupt today.
It also was amazing how short-sighted the bankers were. I knew the *** was officially up in 2006 when I was in a meeting with a mortgage guy who kept talking about how illegal aliens were become such a great growth market for mortgages. When I was skeptical, this guy literally said, "No, it's great. Because they pay in cash and on time."
The next question out of my mouth was, "Why would you loan $250,000 to a person who can get deported the next day?" You would have thought that I had whipped it out and micturated on the table. But that was the prevailing attitude of the time: Blue skies ahead.
It also didn't help that mortgage companies stop carrying their own paper. 15 years ago, it was a point of pride with most mortgage companies that they serviced their own loans. Then they figured out that they could sell off their mortgages to places like Citi for extra money. The problem with that, of course, is that their underwriting standards went right down the tubes. After all, if they weren't going to be holding the paper for more than 3 weeks, why did they have to worry about the creditworthiness of the borrower?
So yeah, in 2006, I saw it coming and started divesting out of real estate marketing. I also sold my house for a tidy profit and moved to a nice neighborhood where somebody was dumping their house at fire-sale prices.
You are becoming defensive on something I never said or implied.
1. I have lived in three states and five counties and in NO city I have seen has there not been apartments in decent areas. So I think you are being a bit on the overly dramatic side here. I am willing to bet you could have found a nice apartment in a nice area. The problem was you wanted a home, and that's fine, be happy with your decision. Don't expect sympathy because your home is losing value. You should have researched the situation. Let me spell this out so you don't insinuate some other meaning. Let say you did research early on. You saw what was coming, but you decided you WANTED a home and a backyard. You go in, buy a home and your happy with the outcome. You bought it knowing full well what is coming. No harm, no foul.
2. Your not a bad mother, you wanted to provide a house for your kids. Shows you love them nothing wrong in that.
All I am saying here is. These home owners who didn't research and are now in a tizzy about falling home prices need to stop crying. Besides, no turning back now. Just prepare for the long haul and I hope the best for everyone.
Interesting points, I think you are spot on. We bought a house in NJ in 2002 and sold it in 2007 - it almost doubled in price in that time. However, we also bought a house in 2007 (needed a bigger place). We got it for $200k off asking price, which it would have sold for easily in 2005 but I still think we paid $200k too much for it. But you have to have a place to live and this was the perfect house for us. As long as you are aware and OK with what you are paying - relax and enjoy your property.
Ther are nice places that have apartments but not really the nicest in a area. Face it;many of these peole wanted to get out of teh apartmant situation and the problems they bring to area.Many made out like bandits iof they sold at the right time and made alot of money with little investmant. Many waited too long or didn't understand the uses of these loans. But that said many home buyers made alot of money off their previuos homes to the point that they are in better shape how than ever.The problems are only estimated at 1% of homeowners except for a few areas really.But then renters are even further from owning a new home with the tighter financing than they were last year.In fact the influx of renters from people losing their homes will only drive rents upward.Afterall banks have no interest in being landlords to renters and many landlords are losing properties that they rented out.
Ther are nice places that have apartments but not really the nicest in a area. Face it;many of these peole wanted to get out of teh apartmant situation and the problems they bring to area.Many made out like bandits iof they sold at the right time and made alot of money with little investmant. Many waited too long or didn't understand the uses of these loans. But that said many home buyers made alot of money off their previuos homes to the point that they are in better shape how than ever.The problems are only estimated at 1% of homeowners except for a few areas really.But then renters are even further from owning a new home with the tighter financing than they were last year.In fact the influx of renters from people losing their homes will only drive rents upward.Afterall banks have no interest in being landlords to renters and many landlords are losing properties that they rented out.
We have apartments here (south florida), in nyc, and out in fort worth where I used to live and many other places in very nice areas. So this statement that apartments are a problem or come with problems isn't true. Depending on where the apartment is the cost of entry can be cost prohibitive to the problem people. Example, you have 2500 and up apartments near the down town here that are supposedly upscale. You won't be getting many criminals renting there or around there. As for rents, here in South Florida they are going down. I have seen rent go down by 200 a months around here. Its a beautiful thing. There is so much rental units on the market right now and a outflow of people, supply has out stripped demand which in turn has pushed prices down.
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If so many buyers hadn't gotten in over their heads with those too-good-to-be-true loans, the market would be finding a floor, because sellers would simply say "no" and not fire-sale their homes because a buyer thinks they should. But homeowners borrowed foolishly and now we're dominoing.
