Is the FHA out of their minds? (Hoboken, Deal: apartment, rent)
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Can anyone clarify if this applys to TOWNHOUSES as well as condos... and while we are on that subject does anyone have a clearcut definition of a condo vs. a townhouse....?
We just put a bid on a property in Timber Hollow in East Brunswick, NJ.... one floor unit, private outdoor enterance, 2 bedroom 1 bath, private enclosed back yard.... and I have heard it referred to as both a condo AND a townhouse. So now I am rather confused as well as concerned....
I might be wrong, but I always thought a townhouse was a multi-story, up-and-down type of residence without anyone over or beneath you but just on the sides.
In general, FHA is a horrendous idea. Get rid of it.
Gee, thanks. I'm pre-approved for an FHA loan. There's no way I could save 20% anytime soon, and I was paying $2200 in rent for the past four years. With an FHA mortgage, I will be able to pay less than that monthly and get the tax deduction.
I might be wrong, but I always thought a townhouse was a multi-story, up-and-down type of residence without anyone over or beneath you but just on the sides.
That had always been my understanding too.... but one realtor we had been working with told me it depended on the location of your front door. If it was set up "apartment style" and your front door was in a shared hall, you had a condo. If your front door was outside, you had a townhouse. It seems a lot of opinions differ on this though. Truthfully I stopped caring, I though 6 of one = 1/2 dozen of the other.... but these new regulations do seem to put a new spin on it all.
That had always been my understanding too.... but one realtor we had been working with told me it depended on the location of your front door. If it was set up "apartment style" and your front door was in a shared hall, you had a condo. If your front door was outside, you had a townhouse. It seems a lot of opinions differ on this though. Truthfully I stopped caring, I though 6 of one = 1/2 dozen of the other.... but these new regulations do seem to put a new spin on it all.
Thanks, I had not heard that definition. Sounds similar to the difference between a motel and a hotel, lol.
Gee, thanks. I'm pre-approved for an FHA loan. There's no way I could save 20% anytime soon, and I was paying $2200 in rent for the past four years. With an FHA mortgage, I will be able to pay less than that monthly and get the tax deduction.
If there weren't FHA mortgages prices would be lower, so you wouldn't have to save as much to reach 20%.
And where is this place in which rent is lower than mortgage+taxes+HOA? Where I was last paying $2200 the place across the street has a similar (a fair bit smaller in footage, same bed/bath numbers). A 5.25% 30 year fixed would be $2045/month, taxes are $765/month. No idea what the HOA is.
An interest only loan at 5.25% for the full price plus taxes is more than the rent, which is my ball park compare for buy versus rent.
It is getting pretty close now, as prices have been falling.
And how is this a good thing? If a builder needs say $500K to get out whole and he can only sell for $300K, he will just go into bankruptcy.
If I buy at $500K and prices drop to $400K, I will either sit it out for a very long time, or bail, if I need to move for some reason.
I do not understand how tumbling home prices, sellers taking beatings, large condo developments sitting empty or going rental are all good things?
Tumbling prices make homes affordable for people not dumb enough to go into ridiculous levels of debt. Sellers taking beatings is bad for the seller, but that's balanced by it being good for the buyer - plus the seller clearly overpaid in the first place.
Large condo developments going rental provides more affordable accomodation for people. And they won't sit empty once the price is lowered anyway, and given carrying costs they'll be lowered (or the owner will go into bankruptcy and they'll be forced to sell at whatever price they can get).
If builders overpaid for the land, or overbuilt then yes they'll lose money (and go bankrupt if they lose too much). Again a good thing, since it allows the competent builders who didn't make financially stupid moves to grab up the assets of the incompetent builders at fire sale prices - which is how capitalism is supposed to work.
Do you also think cheaper food is bad? Cheaper energy? Cheaper clothing? If not, why is accommodation any different - they are the four things necessary for people to live - we want them as cheap as possible.
You must also be against cheap health care, right?
Inflation will save the day in the end, so don't worry. Your dream of expensive houses will be back soon enough.
I just got a voicemail my realtor left me in regards to the Email I sent her regarding the FHA reg article.... she told me the property I had bid on was not considered a condo property because it was "fee simple".
Now can someone please clarify what THAT means? LOL
And how is this a good thing? If a builder needs say $500K to get out whole and he can only sell for $300K, he will just go into bankruptcy.
It's pretty simple. The builder made a bad bet. Just like those who choose to play the stock market, it's been a game of buy high, sell low in the past few years. He got in too late at the bottom of the real estate pyramid game, as did many buyers in the past few years. Instead of using their eyes to see reality, greed set in with the vision of $$$ signs. He now has a few choices: if he put up his own cash to build he can choose to take his losses and write them off. But like 99% of those out there (fake made up stat but its gotta be in the ballpark), he is at the mercy of a lender who has to be repaid and if he can't do it, his business is bankrupt.
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If I buy at $500K and prices drop to $400K, I will either sit it out for a very long time, or bail, if I need to move for some reason.
Nothing wrong with sitting it out. A long time ago, people brought homes to actually live in for the long term, not think of them as an investment to flip off in a few years. They hoped to at least break even on the sale down the road. Luckily along the way they were still able to make a little profit, usually seeing a return along the lines of inflation plus a few percentage points. They got real lucky if they chose to sell in the last 5 years at a rate of inflation plus a FEW HUNDRED percentage points. Quite out of the norm, which has never been seen in most of our lives, nor will ever be seen again considering it was the main cause of almost bankrupting companies that have been around since the 1800's. That ship has long sailed away. If you were the actual purchaser in the last few years and for the near future and needed help (i.e. - not paying all cash and making an agreement with a lender for a mortgage) then get a cozy recliner, it's gonna be a LONG wait.
Nothing wrong with bailing either. People in cali doing it all day long, giving the middle finger to the lenders and mailing their keys in. Nothings gonna happen to them. Unfortunately, most of the real estate owners here are from NY and NJ, aka, recourse states. You wanna walk, fine. But it's not fun when they get a judgement, start garnishing your wages and assets since you didn't want to fulfill the mortgage agreement and pay back the underwater loan.
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I do not understand how tumbling home prices, sellers taking beatings, large condo developments sitting empty or going rental are all good things?
What's not to understand? It's the free market correcting itself, just like it has done throughout history. Home prices aren't tumbling, they are going back to normal. Add in an interference play by this current administration with all their silly "making home affordable" and "cash for clunkers" lol, programs, which have done absolutely NOTHING but delay the inevitable, just causing a little bump in the road.
Prices haven't tumbled. Just ask the person who brought in 1999. They can still make an INSANE return, if they choose to sell now and list at a normal price. I've seen houses and condos list for 40%+ off their 2005 "values" by those who purchased before the bubble began to inflate. SOLD IN ONE DAY and they still made a great profit. I'll use Hoboken as an example. Nice 2B condo, 1150 sq. ft, young guy paid $150k in 1999. Could've sold it (based on comp sales) in 2006 for $600k. Similar units listing right now at $475k-$500k. Can sell it right now, with people beating down his door with checks in hand, for $360k. Undercut the market, and still make an INSANE profit. Lol, try doing that with any investment these days. The geniuses who brought those units in 2006 and want to sell NOW instead of 20 years, yes they will be the ones taking the beating you talked about.
Those that sit and "hope" prices return to 2005 levels will just have to settle for a lower then "insane" return, and as time goes on, a lower and lower return until it's back to that magical number, the rate of inflation plus a few % points, which btw also corresponds with income % increase, the way housing has always worked. For those purchasing now or in the past few years, again, it's gonna be a LONG wait just to break even. Have a kid and send them off to college, that's how long.
Metro NY (which includes North NJ) is still at one of the most LEAST AFFORDABLE housing markets in the country where only 21% of homes sold were affordable. All based on household income. Referenced here: Housing affordability remains vastly improved - Aug. 19, 2009
No disputing it, NJ is wealthier then other states. But majority ain't THAT rich. Even with all the job losses in the financial arena, which is a big factor right now out here, it isn't too bad. People hanging by threads and plastic (credit cards...). Just look up the household incomes for your town and compare it to listing prices. Then maybe the surprise will come.
Of course all this can be disputed if you are a buyer coming in ALL CASH. You can pay whatever the hell you want and keep the comps up, keep the seller happy, keep the price inflated and keep the NAR cheering their favorite slogan, "Now Is The Time To Buy Buy Buy!!!".
But alas, most who are coming in all cash usually earned that from being a smart investor. If prices were so good, places would be snatched up instantly. And they are at times. If you see a place sitting more then a week without being sold, it ain't a good deal. Again, people with much more knowledge out there then the average real estate buyer are doing deals, if the price is right. They would get it long before the normal person would.
And if you're like the normal 99% (fake ballpark stat again), who need someone else to help you buy a home, aka a lender/mortgage company then you gotta play by THEIR rules of affordability these days. Underwriting is back to normal - for conventional - 3x max annual income, 20% down (10% with PMI sometimes), 28%-35% (est) Debt To Income ratios, etc.. Once you got that down (which most people don't with prices these days and their incomes), then the APPRAISALS GOTTA HIT THE MARK!! Lol at SO MANY loans being denied these days based on the appraiser, who most of the time doesn't even have a clue about the local market. Seller lists at $600k, buyer negotiates to $530K, lets go into contract. Silly appraiser comes by and puts it at $450k. Deal falls through, home back on the market :sigh:... Time to repeat the same process again. Unless they smarten up this time.
Just watch how bad the Hudson County market is gonna get as time goes on, especially with these insane tax increases. Lol, we already having AUCTIONS in Hoboken and North Bergen! Smart builders - knew to cut their losses while they still can, uneducated buyers who must be dreaming of being underwater with the still inflated prices they paid, though enough to start wrecking the comps for all the other sellers who are still holding out "hope"....
Gee, thanks. I'm pre-approved for an FHA loan. There's no way I could save 20% anytime soon, and I was paying $2200 in rent for the past four years. With an FHA mortgage, I will be able to pay less than that monthly and get the tax deduction.
So you can't really afford the house and my tax money will bail out your bank if you default. Awesome. Where in the US Constitution does it authorize the Fed to be involved in real estate?
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