Originally Posted By fkurucz <<So many people in America view real estate as a lottery ticket or get rich quick scheme, and it really accelerated in recent year.>> FWIW, the former chief economist of the National Association of Realtors, David Lereah, published a book last year titled "Why the Real Estate Boom Will Not Bust". This book basically promised that real estate prices always go up and that if you don't buy you'll be priced out forever. The NAR was indeed complicit with helping to inflate the bubble.
Originally Posted By fkurucz <<Very sad situation. I have often wondered about returning to America thinking we would be better off, but it doesn't sound like it.>> I think I've said this before, but it depends on where your move takes you. And if you decide that it has to California, you can always rent a nice house for a fraction of what the mortgage payment would be (as low as 1/2 or better). In fact I would recommend renting to anyone moving to one of the high priced markets, as prices are almost certain to drop. Maybe not beachfront property in Malibu, but the places where mere mortals live will certainly come down.
Originally Posted By Kar2oonMan Semi-off-topic-observation: I think 'The Subprime Lenders' would be a great name for a band.
Originally Posted By Lisann22 With songs like... 1. Our love took a plunge 2. Inflation blues 3. Wall Street Waltz 4. I'm Bottomed Out. 5. My feelings are mortgaged Lead singer Nas Deq
Originally Posted By fkurucz 6. My underwater house 7. That upside down feeling 8. Where oh where did my HELOC go? 9. Flipper Theme Song (nobody is more in hock than he) 10. Achy breaky mortgage
Originally Posted By hopemax Hey fkurucz, since you live in CO, what do you see up there? We thought coming to AZ, would let us buy, but its market shot through the roof before we could, and now DH is tired of the heat. In March, we are moving to the Denver area, in part because of the housing. The plan, was to rent for a year, then buy, although with the way things are going, I suspect we will need closer to the 20% down payment by the time we are ready, so it might be rent for 2 years then buy. While I feel bad for the people that are going to lose their homes, I can't help but be a little happy, since it might mean we can finally get into the market, I just hope the tides don't shift again before we can. Although looking back "home" (Seattle), today's headline was "Housing prices defy logic, keep climbing." Prices in King County are up 9% over last year, even though inventory is up 51%.
Originally Posted By fkurucz Beware of statistics that say "median prices rose x%", especially when inventory is rising. In today's markets what this usually means is that entry level buyers are frozen out of the market, so it the more expensive houses that are selling. Under this scenario even high end prices could fall and yet the median price would rise. Regarding Colorado and Denver in particular: the econonmy along the front range tanked in 2001 and still hasn't fully recover. Because of this the hyper-appreciation fairy never stopped to visit us. Even tony Boulder is a bargain compared to SoCal. I have noticed that the northern Denver metro area (Westinster, Broomfield, Northglenn, Thornton) is more affordable than the south side (Littleton, Highlands Ranch, Cherry Creek). I live north of Denver in the Loveland/Fort Collins area. In my neck of the woods houses are selling at 2002 prices. I have noticed that fewer people are selling their houses than in years past. There is an unoccupied golf course side McMansion accross the street from us that hasn't sold in a year. I do think that the market in Denver is stronger, but it appears to be pretty soft nonetheless. Lets just say that if you make an offer below asking price that it might be accepted.
Originally Posted By fkurucz One way to get around a down payment requirement would be to buy an REO (bank owned house). I'm sure that the lenders would be eager to accomodate you with a low down loan if you have good credit and a solid and verifiable income history. Just make sure that you have the hous ecarefully inspected, as some foreclosures can have physical problems.
Originally Posted By hopemax >I'm sure that the lenders would be eager to accomodate you with a low down loan if you have good credit and a solid and verifiable income history. Thanks, this we definetly have. DH and I have been married for 9 years, and this July we finally got a second credit card, if that gives you any idea on how atypical we are when it comes to debt.
Originally Posted By Mr X ***FWIW, the former chief economist of the National Association of Realtors, David Lereah, published a book last year titled "Why the Real Estate Boom Will Not Bust". This book basically promised that real estate prices always go up and that if you don't buy you'll be priced out forever.*** RECENTLY "former", you should add. That guy was a real piece of work. Each and every month, he'd state in some way or another "housing appears to be rebounding", "housing has appeared to bottom", etc... And always careful to fudge the numbers so that if month over month was better than year over year or whatever...they used whatever fit. And the problems? Oh, there was an excuse for EVERYTHING. Oh, weather related? "builders couldn't build". Good weather? "Must be too nice out for house hunting. Up in the South, down everywhere else? "OH...the South is a great indicator that things are turning around!!" Down in the South one month later? "the South doesn't matter, pay no attention to the South...look at WYOMING, they're having a great month, must be a rebound!". Jerk.
Originally Posted By ajnhollysmommy We are caught up in all this lender mess. Before we sold our house we were told because of our 800+ credit score when the time came in 3 months to buy another house (we went on extended vacation) that we would not have any problems- even if DH did not have a job when we relocated in Boise. WELLLL here we are 3 months later, we found a house we loved contacted our bank and then said NOPE sorry just cant give you a loan - even with putting $75,000 down we cant get a loan. The house we were looking at was $229,000. so we will be renting for the 1st time in our 13 yrs of marriage. - we were also told not to pay to much rent up front because some of the owners of rentals are forcloing on this homes and taking peoples rent and running.
Originally Posted By Mr X That's unfortunate, sorry to hear it! I assume it's because the work history hasn't been established for long enough, then? Putting down 1/3 of the loan is pretty extreme...I'm surprised you can't find ANYONE that'll finance under those circumstances. But, the fact is the lenders are HAVING to crack down on all this stuff just to remain in business...it will get worse before it gets better. If it makes you feel any better, some gurus are in fact RECOMMENDING renting over buying at this time...up and until housing does find a definable bottom and that could take years. So this might actually be a blessing in disguise for you, believe it or not.
Originally Posted By SuperDry <<< But, the fact is the lenders are HAVING to crack down on all this stuff just to remain in business...it will get worse before it gets better. >>> Which probably means that those "old fashioned" rules of thumb such as having at most a 30-year standard amortization and not devoting more than a third of one's income to housing may actually be words of wisdom rather than just outdated rules from another era?
Originally Posted By davewasbaloo Maybe we're old fashioned. I have 26 years left on our 30 year mortgage and the payments are 1/5 of my monthly net salary. We will be looking to upgrade, and I may go back to a 30 year with a third of the salary funding it, but no more.
Originally Posted By Mr X Wow...you guys are trying to tell me that those old formulas actually make financial sense for all concerned somehow?? Incredible! And meanwhile, on the wall street side, all the stress and strain is GONE once again (til it crops back up), lenders are up, up and away today (some as much as 10% or more). Funny. Same thing happened after New Century (the first subprime to die) died...suddenly, it was "over". And they went up and up and up like CRAZY for weeks...to 52 week highs in many cases. Then they started sinking...most to new 52 week lows (we're talking months here, from yearly lows to yearly highs and then back again to yearly lows...even LOWER than before). And now, AHM died...some analysts quoted outdated figures from LAST YEAR in support of the surviving lenders. And suddenly...like magic (Disney could learn a thing or two), it has ALL..GONE..AWAY.. Til next time. I'm personally doing my homework this time. Hoping to short at the top for once (Countrywide is still a small short position for me, but I can ride it all the way back up to 52 week highs if I have to without hurting my portfolio too much).
Originally Posted By Mr X Dave, YOU sir are apt to be a proud homeowner for decades to come...through probably any sort of turmoil that may arise. That, is something to be happy about.
Originally Posted By Elderp These days it is better to invest in upgrading your current house riding this bad mortgage wave and then being prepared to sell when it gets better.
Originally Posted By davewasbaloo Thank you. I am hoping to grow the portfolio to two houses eventually, rather than a pension. One in the UK, and one in the US. Then I will retire in one (not sure which one yet, and sell the other to pay for our old age). That's the plan.
