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I meant California is expensive yet still popular because despite its problems it is still more desirable than many areas in the country. I meant the major cities like L.A., O.C., S.F., S.D., S.B., etc. (It's funny how many of our cities have two letter abbreviations.)
I hope you're right about the "more affordable" part.
One of the unintended consequences of growing a large shadow inventory is the unfortunate creation of a giant pool of negative equity homeowners. Zillow recently reported that over 28.6 percent of homeowners with a mortgage now sit in a negative equity position. This is up from the 26.8 percent reported only last quarter. The latest Census data shows 50,339,500 homes with a mortgage. If 28.6 percent of these are underwater you have 14.3 million homeowners in a negative equity position.
One of the unintended consequences of growing a large shadow inventory is the unfortunate creation of a giant pool of negative equity homeowners. Zillow recently reported that over 28.6 percent of homeowners with a mortgage now sit in a negative equity position. This is up from the 26.8 percent reported only last quarter. The latest Census data shows 50,339,500 homes with a mortgage. If 28.6 percent of these are underwater you have 14.3 million homeowners in a negative equity position.
True. But what if it costs them $2500-3000 for rent. And there mortgage is around $2500-3000 (includes principal interest hoa real estate taxes). Than what do you tell these homeowners who are underwater?
Rents are getting higher and higher in more desirable areas.
What would you do than if you were underwater.
Cause with tax deductions you may still be saving more on owning a home than rents over a 10 year period.
Its not that housing is depressed to me. To me its that housing is going back to "REAL" pricing. As many have stated the pricing of the last decade as absurd and EVERYONE was in on it. I remember banks approving entry level people on the job for a week for a house. I remember people becoming real estate brokers overnight. I remember Greenspan telling people to buy houses b/c rates are low, then he raises rates. This also drove illegal immigration as illegals came here to build all these houses.
It was all fluff and b.s. This is the real picture and it ain't pretty especially now that gas is no longer 99 cents a gallon. Everything has gone up in prices but REAL wages. The top is making off like a bandit and everyone else is suffering or paying more. That means too if you make $200,000 a year you are NOT at the top. You are paying more for gas, schools, energy, food like everyone else.
Right not what is key more than ever is the tried and true "location, location, location". Good locations are suffering less or have already bottomed out. Locations far from jobs etc might NEVER recover, especially with gas prices never going back down. All that sprawl is only going to get worse.
A HOUSE is NOT for EVERYONE! It is not! Its force fed as the "American dream" without truly explaining the responsibility required to own and maintain a home. Not everyone was meant to own a house and the big banks etc shoved it down everyones throats.
I agree that housing for most areas will be depressed or "real" for the next 10-15 years. If not worse.
What is not talked about in that article is the change/shift in tastes with the younger generation. They don't want a huge home. Their tastes are very different. They prefer smaller homes, living close to the city, apartments, townhomes, condos. With energy prices continuing to increase home sizes will shrink and all those "new" huge homes won't have buyers as people will be scared to pay to keep the energy on. Also these younger folks rather be on the laptop/iPad than on a lawnmower. It is what it is.
Then you will have parents of this children no longer sell the "buy a house" story as they are underwater etc. How can they tell people or their kids to buy a home knowing they haven't made a dime or its a terrible investment.
That might just be the core problem. It used to be you bought a home to be a HOME. Somewhere to be involved with the community, to know your neighbors, to want to better everything around you from schools to local stores. Instead a home became a house and something to "flip" and make money for everyone from Wall Street/Banks to the buyer with terrible credit.
If we make houses, "homes" and take care of them, them prices will rise as they are desirable to be a part of that community.
Keep in mind that there are and were large swaths of the country where the real estate downturn or collapse was either mild or nonexistent, and that i there are undoubtedly tons of realtors on this board who can point them out to you if you need specifics.
But the bozos in DC deserve 100% of the blame for the housing collapse, which is what happens when you meddle in what had been a perfectly good real estate market for several decadesfrom coast to coast.
Keep in mind that there are and were large swaths of the country where the real estate downturn or collapse was either mild or nonexistent, and that i there are undoubtedly tons of realtors on this board who can point them out to you if you need specifics.
Many of those were also in areas where the run up was mild or nonexistent also. So if real estate only drops 10% from a baseline of 0% appreciation, that'll still take a long time to recover.
Quote:
But the bozos in DC deserve 100% of the blame for the housing collapse, which is what happens when you meddle in what had been a perfectly good real estate market for several decadesfrom coast to coast.
Yep, getting rid of depression-era banking regulations led to a depression-era banking meltdown. Who would have guessed?
The last real estate downturn after the cold war(1989-1991). Prices tanked up to 10-15% in high defense contractor states like S California and DC. Took the entire decade of 90s to recover.
However this housing downturn is different since upwards to 50% probably made 0-10% downpayments on their homes plus the job loss.
We are technically in year 5 of housing downturn. I suspect federal programs are about ended. Govt has tried every trick in book (with exception of principal mortgage reduction).
Most of those in trouble will be flushed out of their homes by of next year and with short sale and mortgage forgiveness act expiring. People aren't stupid. They don't want to deal with IRS tax liability with short sales and will exit their homes or ride it into foreclosure.
So 2013-2020 market stay flat. So 15 years sounds about right for a flat real estate market.
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