[Need_affordable_home]

I was checking Zillow and the classifieds. In a nearby neighboorhood called Breaker's West, one seller sold his 3/2 1500 square foot house for $242k, a fairly good price. He wanted $299k, Zillow zestimated at $317k. The buyer negotiated a significent drop from asking price. Too bad the HOA fees are $430 a month and property taxes $5k a year. Thats over $10k a year for both without any insurance(too expensive) Those kind of prices are not sustainable. If hurricane insurance keeps doubling, we will see house prices halve in a couple years. Dont overpay for a house! Its about time Florida house prices come down to fundamentals. If prices drop enough and if I can make enough money as a freelance graphics designer, I just might stay in south Florida, after all, ive lived here all my life.

[bale002]

Originally Posted by Need_affordable_home

one seller sold his 3/2 1500 square foot house for $242k, a fairly good price. ... Too bad the HOA fees are $430 a month and property taxes $5k a year. Thats over $10k a year for both without any insurance

If $430 in HOA doesn't cover at least insurance for the building structure, it sounds like a SFH in a gated community. So what does it cover? Does the community have a plethora of golf courses, swimming pools, and tennis courts?

In any case, my understanding is that some $1 trillion in suicide loan payments will reset in 2007 and there is a significant possibility of no-growth or a recession in the overall economy. Taking these and other factors into account, coupled with the hurricane/insurance wild card in Florida, it certainly is worth waiting into 2008 - one or two more full hurricane seasons to see which way the wind blows - for those who need to and can do.

[Need_affordable_home]

It is in a gated guarded golf community with million dollar houses. Very expensive uppermiddle to upper class community. That $242k house is in the worst part of the community, its on the edge 20 feet from the road with a fence and trees covering some of it. I can see the upper half of those houses as I drive by. $10k a year for HOA and property taxes is insane, this is a big chunk of most people's salaries!

[Nancy Lynne]

that are coming due in 2207?

[bale002]

Originally Posted by Nancy Lynne

... suicide loans ... that are coming due in 2207?

I'm not sure what's coming due in 2207 (probably we'll all be speaking Mandarin by then), but suicide loans refer to "exotic" or non-traditional loan products featuring, first of all, variable interest rates (adjustable rate mortgages - ARMs), then monthly payment of interest only whereby the principle remains constant (the loan is not paid down or amortized - interest only mortgages), then mortgages with monthly payment options (often called option ARMs) whereby the mortgage holder can not only pay interest only on a monthly basis, but make a payment which is even below the amount of accrued interest, also known as negative amortization loans because, instead of paying down the principle or keeping it the same, it actually increases.

Such loans were once available only to sophisticated, high-worth home buyers in special circumstances (exotic loans), but since the credit bubble even the US Federal Reserve has pimped the spread of such loans to the general public under the guise of the promise of "home ownership": in the case of interest only loans and option ARMs, the average mortgage holder is betting that the market price of the house will rise indefinitely forever, as if it were some great Ponzi scheme, or that income will increase, possibly at a faster pace than the rate of increase in accrued interest, otherwise, if prices stagnate or fall (in recent months prices have fallen around 3% nationally, unprecedented since the 1930s, and more than that in Florida), the mortgage holder (I don't call a person in this situation a "home owner", which is a more of a euphemism nowadays) will likely find himself "upside down"; i.e. the mortgage is for a higher amount than the market value of the house, so in case he were to need a quick sale, he would wind up owing money.

On top of that, now that short-term interest rates are higher than they were in the 2001-early 2005 period, the peak of the credit bubble, fueling the peak of the housing bubble in 2004-2005, the minimum payments on these suicide loans, often for huge principle amounts, are resetting at higher rates: minimum payments on up to $1 trillion of such loans nation-wide will increase in 2007, significantly in many cases, well beyond the pace of increase in income, if any, putting many mortgage holders under financial stress and at risk of default and foreclosure. In Florida, the unexpected increase in property taxes for many and the insurance debacle come on top of this.

The rate of foreclosure has already increased, perhaps to around 6%-7% nation-wide over the last year or so, and in Florida by around 30%-40%, one of the highest levels of foreclosure increase in the country (for some reason there are a lot of foreclosures also in Colorado) (I am not sure of the exact foreclosure level and rate of increase statistics, but somewhere around there.)

So in 2007, the rate of foreclosure may accelerate, even to the point where it puts stress on the financial system, likely against the backdrop of a slowdown in overall economic growth, possibly a recession. In this scenario, housing prices should come down further, likely at a faster pace than in 2006.

This is a worst-case scenario. One possible way out is for the Fed to lower interest rates again, allowing mortgage holders to re-finance for the umpteenth time, and so rolling over the Ponzi scheme - in the absence of real income and productivity gains, and not artificially inflated by mere increases in the money supply - for at least another year.

I hope this helps.

[DeLaSalle]

Originally Posted by Need_affordable_home

It is in a gated guarded golf community with million dollar houses. Very expensive uppermiddle to upper class community. That $242k house is in the worst part of the community, its on the edge 20 feet from the road with a fence and trees covering some of it. I can see the upper half of those houses as I drive by. $10k a year for HOA and property taxes is insane, this is a big chunk of most people's salaries!

Dear NAH,
You seem like a genuine and sincere person.
But with all due respect; You sound delusional, Hysterical and mislead more and more...

There are people that "Want" to pay high HOA fees to escape from the the "Typical" FL neighborhoods and live among their own kind(Like me). My wife and I "Choose" to pay a larger % of our income to live where we Love it!

I was all for your cause at first but your incessant whining, crying and "Bad-Mouthing" FL just because you can't/refuse to live here is Getting real old...

What if I started a thread called "Need an Affordable BMW 335i sedan"(Black Saphire Metalic w/Beige Dakota Leather...).?
If I can't afford/choose to afford a 335i, I get over it or BUY IT!! Which I did!!!

This reply is not to disrespect you but to honestly let you know that you have really been acting "Delusional".(The other Nice folks on this board humor you)

Before you go and move 1000 miles away from your folks and Civilization, Please talk to some honest knowledeable People!
Think about this "You get what you pay for"...
There is NO FREE LUNCH...EVER!!
Best Regards,
DLS

[Muggy]

Dear DeLaSalle, please do not fear monger here. Ironically, you wrote this in another post:

Originally Posted by DeLaSalle

Don't ever apologise for the way you feel...The Freedom of Expression Must work both ways or not at all. There are many in this country who persecute those they do not agree with using shame, guilt and alienation as their weapon of choice...

I'm proud of you Need Aff. It was clear when you joined that you WERE hysterical... to buy.
Now you know markets are cyclical. Don't ever believe otherwise; stay strong young grasshopper!

[bale002]

Originally Posted by DeLaSalle

... with all due respect, you sound delusional, hysterical and misled and more, DLS ...

Why, pray tell, are you shouting?

[seeriously]

To Delasalle..

PERFECT POST!

But you're wasting your keystrokes. These whiners have driven away their families and their neighbors with their negativity and this board is all they have. Through it, they are creating their own reality. You called NAH delusional, but if that's the way he's seeing things then I guess he has created his own reality.

[Need_affordable_home]

Trust me, I got over staying in south Florida a while ago. The purpose of this thread is for anyone rich that wants to stay in Florida should wait for house prices to drop more. I have stated a case where this seller went from $299k to $242k in order to sell because no one wants to pay so much. Yes some people dont care about high HOA, property taxes and hurricane insurance(or they go uninsured) but I think most people care about not overpaying for a house that will be cheaper in the next few months and years.