Wait at least one more year before purchasing house! (Phoenix: short sale, foreclosure)

[markas214]

Originally Posted by teach1234

Uhhh, people, the point here is to communicate information, not engage in literary fisticuffs (although I would argue against the word "literary" being applied to some of the posts I've read).

It is important to debate the merit of people's viewpoints. I don't consider replying directly to another poster as an assault but merely a rebuttal.

[Ponderosa]

Originally Posted by markas214

This really has nothing to do with prognostication. It is all about risking seeing a big down payment disappear. Again I am putting my trust in those who have correctly predicted the direction of the real estate market. Your two house Zillow example and near zero price drops on new new builds which have been resulting in near zero sales are hardly reassuring especially looking at your track record predicting the market. For example

Ponderosa 4-10-2007:

We'll see.

As for my prognostication of two years ago, I did not foresee the Lehman deal, $150 oil, and off the chart commodities, and the sharp fall of the dollar among other things. I don't think anyone else did back then either. The world economy fell out from under us, so to speak. I have thus hedged my latest prediction with "barring any unforeseen economic meltdown". I base my prediction on a reading of the economic tea leaves and, as of right now, I am bullish on the gradual return of the housing market in this area.

[markas214]

Originally Posted by Ponderosa

We'll see.

As for my prognostication of two years ago, I did not foresee the Lehman deal, $150 oil, and off the chart commodities, and the sharp fall of the dollar among other things. I don't think anyone else did back then either. The world economy fell out from under us, so to speak. I have thus hedged my latest prediction with "barring any unforeseen economic meltdown". I base my prediction on a reading of the economic tea leaves not and, as of right now, I am bullish on the gradual return of the housing market in this area.

Back in the boom it was easy for people to speculate since few had anything to lose. Zero down was an absolute catastrophe. These people walk away with no regrets and they don't care if they ruin their credit. I worked hard for what I have and do care. I fear the worse and if I'm wrong I may pay a bit more but nowhere what I could to lose. You need to see it from my perspective. I am moving across the country and have no idea if I will love living in Az or hate it. For those who can wait it out it will take a while to get even and then ahead but eventually the mortgage does get paid down. In fact if I were underwater I'd be paying down the principal and trying to use some of the government programs to renegotiate the amount. Unfortunately the lax credit standards allowed a lot of irresponsible people to borrow money easily available from unscrupulous lenders.

[markas214]

Originally Posted by Ponderosa

"barring any unforeseen economic meltdown". I.

Actually I went through a lot of your old posts to see what you were thinking a year or two ago and most did say barring a terrible recession or something to that effect so you hedged well even a year or two ago. I think even those who saw a crash coming have been surprised by the depth and speed of this one. Cheers.

[Howard Roark]

This housing bubble crash has been predicted by the bloggers on The Housing Bubble Blog since 2005. Also Charles Hughes Smith, whose socialist politics I passionately disagree with, predicted on his blogs that the real estate bubble will bring down the stock markets around the world.

We HBB bloggers laugh and quote the pundits who say "no one saw this coming!"

We were aware it would be deep. Also Harry Dent predicted a depression in 2009. Is this a depression...or is it still too early to say? Option ARM resets and Alt-A resets are beginning in earnest. I think October will be a big stock market crash because of continued escalation of foreclosures.

Originally Posted by markas214

Actually I went through a lot of your old posts to see what you were thinking a year or two ago and most did say barring a terrible recession or something to that effect so you hedged well even a year or two ago. I think even those who saw a crash coming have been surprised by the depth and speed of this one. Cheers.

[crunchtime]

Originally Posted by Ponderosa

Barring some unforeseen economic collapse, home values in Phoenix metro "bottomed" around October of 2008. Median prices are misleading as they reflect the relative share of foreclosures. Compare house to house over the coming months. Watch your own house with Zillow. You are not going to see a big value change in THAT house though it may bounce around a little. The worst is over. In a year or less homes will resume appreciating and in a couple years, they will be back on trend again, will make up the undershoot where that has happened, and be tracking gains in wages. This too shall pass.

Of course home prices will eventually level out after most of the foreclosures are finally sold but don't except annual double digit increases either like before. That will never happen again for along time. I am looking at 5% increases for quite awhile.

[azjack]

"I am looking at 5% increases for quite awhile."

I am guessing that is an annual rate. Phoenix prices are now declining at an annual percentage rate in the neighborhood of 30%.

"This housing bubble crash has been predicted by the bloggers on The Housing Bubble Blog since 2005."

Indeed it has.


I remember that RL Brown character would preface his rosy predictions with some language like "barring some external, unforeseen calamity, etc." Of course, the flippers, liar loan applicants, and their allies in the real estate, lending, and debt collateralization fields are themselves responsible for much of this global economic upheaval. Lehman Bros' demise partly stems from loan defaults right here in our backyard.

[Axiom]

Does any one else pay attention to PMI's Market Risk Index?

They use economic, housing, and mortgage market factors (home price appreciation, employment, affordability, excess housing supply, interest rates, and foreclosure activity) to determine scores that translate directly into an estimated percentage risk of future home price declines.

They just released First Quarter 2009 data and Phoenix is still on their list of the 10 riskiest MSA's. In their estimation there is a 98.8% chance that prices will be lower 4th quarter 2010 than they were 4th quarter 2008.

Personally I think things are going to get worse before they get better.

[Ponderosa]

Originally Posted by crunchtime

Of course home prices will eventually level out after most of the foreclosures are finally sold but don't except annual double digit increases either like before. That will never happen again for along time. I am looking at 5% increases for quite awhile.

Never said that. I expect appreciation at roughly the rate of gain in wages. It can't be sustained long in either direction from that metric.

NOTE: I do think that foreclosed homes selling for 50 bucks a sf will appreciate at double digits rates for a while till they catch up, but that is the exception.

[Ponderosa]

Originally Posted by markas214

Actually I went through a lot of your old posts to see what you were thinking a year or two ago and most did say barring a terrible recession or something to that effect so you hedged well even a year or two ago. I think even those who saw a crash coming have been surprised by the depth and speed of this one. Cheers.

I agree. I certainly never saw the Dow going down around 7k from 14K, for example, or the world-wide scope of this thing. I think a lot of people who know much more than I are scratching their heads at this. On the other hand, I have done a great job with the volatility since last fall and have made some money off of this crisis, and I am neither buying nor selling my homes.