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Old 11-19-2012, 07:39 PM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,136,225 times
Reputation: 6920

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Quote:
Originally Posted by ducviloxi View Post
Isn't this type of thing what we just went through? Apparently lessons have not been learned. People talk about this being a housing "recovery"! This is laughable. A true housing recovery is when people can afford home prices based on a solid job market and incomes, and by afford I mean having a stable job, putting a decent amount down (15-20%), having 8 months of reserves and not spending more than 25-30% of your gross income towards all housing related costs.
Those sound more like conditions during a recession.
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Old 11-21-2012, 12:32 AM
 
Location: Whittier, CA
494 posts, read 1,910,631 times
Reputation: 459
Robert Shiller Senses Housing Bubbles Forming In Two US Cities - Business Insider
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Old 11-21-2012, 07:32 PM
 
Location: Chandler, AZ
5,800 posts, read 6,539,626 times
Reputation: 3151
There's plenty of blame to go around regarding our skyrocketing housing prices and the 2008 crash which was predicted several years earlier, with the Feds, politicians and numerous other culprits all guilty.

Our worst-in-the-nation zoning restrictions have made housing unaffordable for thousands of potential newcomers and longtime residents, thanks to the slow-growth/no-growth/open space crowd and the treehuggers who own everybody in Sacramento.

The fact that the FHA is still offering home loans with as little as 3.5% down for folks who filed bankruptcy as little as 3-5 years ago, as an absolutely disgusting front-page story in the LA Times a few days ago pointed out is downright infuriating and absolutely asinine.

That absurd practice needs to be terminated forever.
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Old 11-21-2012, 07:36 PM
 
Location: Le Grand, Ca
858 posts, read 1,496,528 times
Reputation: 233
Quote:
Originally Posted by Marv101 View Post
There's plenty of blame to go around regarding our skyrocketing housing prices and the 2008 crash which was predicted several years earlier, with the Feds, politicians and numerous other culprits all guilty.

Our worst-in-the-nation zoning restrictions have made housing unaffordable for thousands of potential newcomers and longtime residents, thanks to the slow-growth/no-growth/open space crowd and the treehuggers who own everybody in Sacramento.

The fact that the FHA is still offering home loans with as little as 3.5% down for folks who filed bankruptcy as little as 3-5 years ago, as an absolutely disgusting front-page story in the LA Times a few days ago pointed out is downright infuriating and absolutely asinine.

That absurd practice needs to be terminated forever.
Why? Because someone had a tough time a few years ago, he/she should not be able to buy their own home again? Ridiculous.
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Old 11-26-2012, 02:54 PM
 
Location: Whittier, CA
494 posts, read 1,910,631 times
Reputation: 459
Quote:
Originally Posted by Xplorer View Post
Why? Because someone had a tough time a few years ago, he/she should not be able to buy their own home again? Ridiculous.
not for at least a while, and with above average criteria...because they have already demonstrated a lack of financial prudence, a large majority of those foreclosing today either bought homes they could not afford based on unsound financial assumptions or used their home as an ATM.

Some people did have an emergency fund in place for a job loss but they were unemployed for massively long periods of time. In this case should a lender lend to someone who is unable to become re-employed quickly? Of course not..people with such a shaky employment background should not be buying homes.
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Old 11-27-2012, 10:56 PM
 
Location: Lafayette, CA
2,518 posts, read 3,997,543 times
Reputation: 624
Quote:
Originally Posted by ducviloxi View Post
not for at least a while, and with above average criteria...because they have already demonstrated a lack of financial prudence, a large majority of those foreclosing today either bought homes they could not afford based on unsound financial assumptions or used their home as an ATM.

Some people did have an emergency fund in place for a job loss but they were unemployed for massively long periods of time. In this case should a lender lend to someone who is unable to become re-employed quickly? Of course not..people with such a shaky employment background should not be buying homes.
Exactly.

When did home ownership become something everyone should have?

Should everyone be able to buy a brand new Ferrari? It's not fair if they can't! State and gov't subsidized sports cars, except the average Ferrari is still cheaper than the median home in OC, so at least in case of default the hit to the tax payers will be much less.

People who have foreclosures or bankruptcy on their record are duly scrutinized and denied credit, because they already hung themselves once, why give them another rope so soon? That's not only welfare, it could be seen as a form of sadism.
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Old 11-27-2012, 11:01 PM
 
Location: Lafayette, CA
2,518 posts, read 3,997,543 times
Reputation: 624
Quote:
Originally Posted by EscapeCalifornia View Post
It hasn't been that way in OC in a long time and likely never will be again, not as long as the world's wealthy all want some property here.
Well let's be honest, it hasn't been that way in SoCal/NorCal since slightly before 2000. So it wasn't THAT long ago. I bought my home in Lafayette for 4x less than what my neighbor sold his home for 2 months ago, and he had less acres, and about 1,000 less sqft.

Did incomes suddenly increase 4x between the mid-90s and now? No, in fact wages are stagnant for the most part. What changed?
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Old 11-28-2012, 06:19 AM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,136,225 times
Reputation: 6920
Quote:
Originally Posted by DocGoldstein View Post
Did incomes suddenly increase 4x between the mid-90s and now? No, in fact wages are stagnant for the most part. What changed?
Probably the number of available jobs in that area increased plus a decline in interest rates. Home prices are generally driven by the incomes of homebuyers. Those likely went up where you are.
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Old 11-28-2012, 10:24 AM
 
Location: Lafayette, CA
2,518 posts, read 3,997,543 times
Reputation: 624
Quote:
Originally Posted by CAVA1990 View Post
Probably the number of available jobs in that area increased plus a decline in interest rates. Home prices are generally driven by the incomes of homebuyers. Those likely went up where you are.
Incomes are up for sure in the SF Bay Area, and there are a lot of tech jobs, but as a multiplier, 3.5-4.0x income used to exist even in prime areas as recently as 1999. Now it's closer to 6-8x median income, especially in places like Santa Clara County. Interest rates surely have an effect, but that's my point. Cheap credit is the only thing that is supporting current prices. It was also the support during the last big bubble. Can the government continue to buy $40,000,000,000 worth of MBS every month just to float the housing market?

None of this is sustainable.
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Old 11-28-2012, 11:51 AM
 
Location: Everywhere and Nowhere
14,129 posts, read 31,136,225 times
Reputation: 6920
Quote:
Originally Posted by DocGoldstein View Post
Incomes are up for sure in the SF Bay Area, and there are a lot of tech jobs, but as a multiplier, 3.5-4.0x income used to exist even in prime areas as recently as 1999. Now it's closer to 6-8x median income, especially in places like Santa Clara County. Interest rates surely have an effect, but that's my point. Cheap credit is the only thing that is supporting current prices. It was also the support during the last big bubble. Can the government continue to buy $40,000,000,000 worth of MBS every month just to float the housing market?

None of this is sustainable.
Isn't it more lack of credit demand that's keeping rates low?
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