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Old 12-30-2007, 10:33 PM
 
Location: St. Paul's East Side
550 posts, read 1,637,783 times
Reputation: 281

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Quote:
Originally Posted by moving123456 View Post
I was actually surprised when one home that I had saved on a real estate site recently dropped their asking price a whole $2,500.
$2500 ? ? " ?

That nothing! Over here on the east side houses I am tracking are dropping in 5k, 10k and 20k increments!

Granted, I am only tracking SFHs priced below 100k, and the zip codes are not the best. But I think what's happening here may be an indicator of where the TCs market is going.

Houses which are not dropping often cannot drop anymore and allow the owner to pay off outstanding mortgages on closing day.

I've seen short sales which are still overpriced... the house doesn't sell when in short sale mode, then it goes into foreclosure. Thats when you start seeing the deep discounts.

In my mother's Shakopee sub-division of <35 houses, 3 homes are currently in foreclosure...

I don't have the numbers, but I have heard rumor that the pipeline of upcoming foreclosures is PACKED.

I expect another year, at least, before we start seeing the real bottom of the TC market.

But I may be wrong, that's just my opinion...
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Old 12-31-2007, 07:50 AM
 
5,341 posts, read 14,140,726 times
Reputation: 4700
Quote:
Originally Posted by StPaulEastSider View Post
The fallout of the Twin Cities Housing Market from state-income and prime mortgages will not be fully apparent until 4th qtr of 2008. That's when the last of the mortgages written under the now-unlawful stated-income mortgages will hit the market.

For example, I know of a house on Maryland Ave in St. Paul. Built circa 2004. Never sold, never lived in. July 2007, the month prior to the Aug 1st cutoff for stated income mortgages, the house sold. The price listed for the sale [on Zillow] is exorbitant, given the market last July. But as far as the neighbor 2 doors down knew, the house never changed hands, and is still not lived in. The original builder told the neighbor in October that the house is now headed for foreclosure. My guess is the original builder had a straw buyer over appraise the property and push through a "sale". The buyer never had any plans to live in the property or even make a single payment on the new mortgage - which is why the house is now headed for foreclosure.

Multiply this scenario hundreds of times... I think the worst is yet to come.

On the other hand, Minnesota passed one of the toughest mortgage lender laws, which went in force on Aug 1 1007. This might slow the flood of fraud in MN and help to protect the market over the long haul.
Stated income loans are still completely legal in MN as long as they are originated by people that work in banks (as opposed to brokers). So what you see happening in the market right now is brokers joining forces with banks.
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