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Old 04-18-2013, 06:27 AM
 
Location: Phoenix,az
391 posts, read 842,699 times
Reputation: 323

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Quote:
Originally Posted by MN-Born-n-Raised View Post
Then watch the video because they answered it. Currently, there is no bubble.
Apparently everyone is an expert. On the case of "is it a bubble?"

I present to you Exhibit A.

Obama plan to open housing market to those with weaker credit sparks debate






Quote:
Originally Posted by MN-Born-n-Raised View Post
20% of the entire Valley is re-renting after letting their homes go. As Mike pointed out, some of them are renting back their exact house that they let go. When their credit heals, they want to get back in and own. It's obvious.


Then watch the video because they answered it. Currently, there is no bubble. Most "investors" own their homes outright or have a lot of skin in the game which is MUCH different than in 2005. Also credit is much tighter so it's not a "bubble"; it's called supply and demand. If the government loosens up the lending standards again, THAT is when the bubble will re-occur. Excluding "bubbles", they do predict the market to overheat again because housing is cyclical.

The reality is housing is a big chunk of the economy. A major owner of the homes in the federal government (they bought trillions of bad notes). So it is logical for the policy makers to do everything in their power to see a certain level of appreciation so people are not upside down and they get their $$'s back. It was a smart move. While I voted for Romney give Obama props for a policy that worked. I bet on this HOUSING recovery happening. As Mike Orr accurately explained, there is a 1.5 year lag. People make money in RE by seeing trends that others refuse to see.
Quote:
Originally Posted by dualforecast View Post
correct MN, no expansion in credit=no bubble. A huge factor in our recovery has been us being a non-judicial foreclosure state, and a pretty darn fast one at that. Remember when Romney got crucified for being quoted as saying "just let it hit bottom"? That's what I would have preferred, and I think the big drops in gold, would have come three years ago. Cash for clunkers, and FTHBC.....both created pimples on ski slopes, at a tremendous cost. But back to the video, they down play infill because of economies of scale (lack thereof), and expensive land......there are many, many lots downtown and midtown and relative to any other major city (on the planet) are still very cheap. Job centers in the exhurbs? that's a large assumption. But, yes, the builders are greedy sobs, and like to keep the land cost closer to 10K, than 100K. And what about vertical growth? Plenty of vacant lots where you could build a whole connected walkway thing like MPLS, that could house hundreds of thousands...it would make a lot of sense for the extreme weather. Hong Kong has a population of 7 million, and it is very close to the size of Phoenix at 426 square miles, yet only 25% of it's land is developed.
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Old 04-18-2013, 10:24 AM
 
9,858 posts, read 11,258,778 times
Reputation: 8532
Quote:
Originally Posted by kremit View Post
Apparently everyone is an expert. On the case of "is it a bubble?"

I present to you Exhibit A.

Obama plan to open housing market to those with weaker credit sparks debate
kremit. So far no bubble. But if they succeed with what you mention on your link, then we will have learned absolutely NOTHING and we will repeat the process all over again. IMHO, owning a home isn't a right.

Thanks for sharing and I just gave you some feedback props.
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Old 04-18-2013, 11:07 AM
 
3,819 posts, read 11,974,640 times
Reputation: 2749
Keep in mind that they the Obama administration is saying they want to ease lending standards...that does not mean it will automatically return to what it was in the bubble years. During the bubble years, people were getting homes with just stated income, no real proof, didn't matter how many houses you already had...it was crazy, I knew people who literally had over 10 homes and were all bought to flip. The way it is now, and I would know since Im in the middle of buying a new home, it's a lot more stringent. Some people say too stringent, I don't necessarily agree, I actually think it should be a little difficult to buy a home, it's a big purchase but there are some people who may be financially sound but if they don't have that 640 credit score, they can't buy anything even though they debt-to-income ratio is in line. Would lowering the score required to 620 or 600 be a horrible thing? Not automatically, it depends what other requirements they ease on...hopefully it's a good balance.
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Old 04-18-2013, 11:20 AM
 
Location: Rural Michigan
6,341 posts, read 14,741,503 times
Reputation: 10550
Quote:
Originally Posted by MN-Born-n-Raised View Post
kremit. So far no bubble. But if they succeed with what you mention on your link, then we will have learned absolutely NOTHING and we will repeat the process all over again. IMHO, owning a home isn't a right.

Thanks for sharing and I just gave you some feedback props.
If you read that article it talked about fha loans for those with credit scores from 620-680. Fha loans had nothing to do with the housing crash. All fha loans are (and have always been) full-doc loans, requiring the borrower show their tax returns, paystubs & the property requires a real appraisal and inspection - not a "drive-by" or "desktop" appraisal, those were reserved for the "innovative" bankers in the private sector... If Angelo Mozillo wrote loans like that, there wouldnt have been a crash.

One could argue *very* effectively that it was those who had "good credit" who caused the crash.. those were the people sucking out imaginary "equity" with helocs, and signing "ninja" loans for multiple homes they were speculating on.. "Ninja loans", meaning no income, no job, no asset verification loans.. Barney Frank and Fha never wrote ninja loans, thats why their market share dropped precipitously during the bubble.. fha loans were "too hard" to get, but liar loans were easy to get.

By the way.. what happened to Angelo Mozillo for passing off billions of dollars in bad loans to the government, then lying about it?.. yup, a penalty out of his pocket of $0, and retirement as a billionaire.. so lets take it out on regular folks trying to buy *one* house to live in by badmouthing fha. A program that has helped millions of americans over the last 60+ years because the "free market" *wouldnt* help them.

We live in an area with distorted home values - much of the "flyover" part of the country has values that are much lower than Phoenix - there are large swaths of the country where $50k would buy most any home in a given city, and the "free market" bankers dont want to "bother" with loans below $50k. Its awful easy to say "I'd just pay cash", if you have cash.. but not everyone does. Wal-mart is one of the largest employers in this country, and they dont pay wages that would support $300k mortgages. Thats why we need fha, usda and va loans. Theyre the only game in town for buyers who werent born with silver spoons in their orifices.

Last edited by Zippyman; 04-18-2013 at 11:33 AM..
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Old 04-18-2013, 01:53 PM
 
9,858 posts, read 11,258,778 times
Reputation: 8532
Zippy. I simply want people to have skin in the game when they buy a house. Including those who take out phantom "equity", Ninja loans, as well billionaires such as Angelo Mozillo. In summary no skin in the game and no loan. I bought my 1st house at age 21 with 15% down and I grew poor. I've worked (and saved) since I was 12 years old. I worked hard and studied hard. So even if you grew up poor, work hard and good things will happen. I will admit it will be a lot easier for my kids.
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Old 04-18-2013, 04:01 PM
 
123 posts, read 244,096 times
Reputation: 74
City Centers in U.S. Gain Share of Jobs as Suburbs Lose - Bloomberg

If this trend continue, then the Brookings Institution report contradicts ASU's model. In a 1% growth environment, how many companies will come to Casa Grande for example. In a high growth economy, there would likely be high commodity prices, which are more reason to live in multi-family/high density. If we were to expand at even 4%, I would expect 10% growth in China.
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Old 04-18-2013, 06:35 PM
 
Location: Texas
2,847 posts, read 2,529,879 times
Reputation: 1775
An investor-driven boom is likely to end badly
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Old 04-18-2013, 07:18 PM
 
123 posts, read 244,096 times
Reputation: 74
every home buyer is an investor in what will likely be the largest purchase of their lives, even if it with someone else's money, as is every lotto player. Without the "investors" we might very well be at 1969 prices, instead of 1999 prices (condo market). Compare numbers of FTB with Investors paying cash..........I can't remember the last time I saw a young couple out house hunting. In the long run, stocks are what makes people wealthy, however a high percentage of the middle class never buy their first share....housing is about the only alternative investment vehicle...and you need a place to live anyway.

Last edited by dualforecast; 04-18-2013 at 07:27 PM..
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Old 04-18-2013, 09:02 PM
 
Location: Phoenix,az
391 posts, read 842,699 times
Reputation: 323
Quote:
Originally Posted by MN-Born-n-Raised View Post
kremit. So far no bubble. But if they succeed with what you mention on your link, then we will have learned absolutely NOTHING and we will repeat the process all over again. IMHO, owning a home isn't a right.

Thanks for sharing and I just gave you some feedback props.
Whenever I hear the housing market going up, I am very cynical. I've never owned a home or never will, just don't like the results of a crash of any kind.

Quote:
Originally Posted by HX_Guy View Post
Keep in mind that they the Obama administration is saying they want to ease lending standards. I actually think it should be a little difficult to buy a home, it's a big purchase but there are some people who may be financially sound but if they don't have that 640 credit score, they can't buy anything even though they debt-to-income ratio is in line. Would lowering the score required to 620 or 600 be a horrible thing? Not automatically, it depends what other requirements they ease on...hopefully it's a good balance.
I think there shouldn't be scores at all. You should be forced to create a business plan before you are able to take a mortgage.

Quote:
Originally Posted by Zippyman View Post
Its awful easy to say "I'd just pay cash", if you have cash.. but not everyone does. Wal-mart is one of the largest employers in this country, and they dont pay wages that would support $300k mortgages. Thats why we need fha, usda and va loans. Theyre the only game in town for buyers who werent born with silver spoons in their orifices.
At the peak of that bubble you all experienced, this was exactly the problem. People worked at walmart and took out too big of a loan. When the extra jobs dried up and people were getting laid off in mass, so followed the housing market. There shouldn't be loans because you don't make enough, that creates the problem in the first place.

This is coming from someone that is no where near the term rich. I know a few people in Phoenix, including myself, that will work two days straight with no sleep, while others work four, and don't even make 75K a year.

Quote:
Originally Posted by MN-Born-n-Raised View Post
I've worked (and saved) since I was 12 years old. I worked hard and studied hard. So even if you grew up poor, work hard and good things will happen. I will admit it will be a lot easier for my kids.
I'm going to say you were lucky. Based on my upbringing I am very cynical about this kind of thought process. I can't really debate any points because the admins to be, will delete all of it.
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Old 04-19-2013, 06:14 AM
 
9,858 posts, read 11,258,778 times
Reputation: 8532
Quote:
Originally Posted by kremit View Post
Whenever I hear the housing market going up, I am very cynical. I've never owned a home or never will, just don't like the results of a crash of any kind.
As the video link accurately suggested, you have a 1.5 year lag. That means you have 1.5 years to get out if you listen to people like Mike Orr. I bought a beautiful home in 2011 at $51 a square foot while people were suggesting it was going to continue to fall. Look at my 2010 posts when I said it was going to drop some more so I am not a RE cheerleader. I was relying on Mike Orr's solid research. He helped me make around $100K in appreciation in 2 years. But more importantly, I am enjoying my investment during the fall and winter months. If my AZ home drops to $0, I still have a great spot to live. But al signs show that it is going up for at least another year.

I have bought and sold a lot of properties and have made hundreds of thousands of dollars doing so. Some like the stock market. That crashes too but as Mike Orr said, it can crash in a day. I only invest in housing and my own business. I will never invest a nickel in the stock market. That's because I am logical when I buy something. IMHO, the stock market is manipulated and I simply do not have the knack to read the stock tea leaves as others do. So if I cannot pee on it, I won't buy it.

For me at least, I only will live in a home that I buy. A prerequisite for me getting married was that I needed to live in my own place. So my girlfriend (and now wife or 27 years) saved with me so that we could get married. I absolutely love owning my own home without a mortgage. I'm not saying renting is wrong (it has it's advantages) but it isn't for my lifestyle. I love to decorate and fix up the place. It's my hobby.
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