The long slow pop

Sooo… yeah. I’ve had this penthouse apartment for the past three years in a housing hot city (Seattle) and my rent hasn’t budged. When we hit double digit inflation to pay back China for the sub-prime boomlet and deficit, with all of this fresh new property on the market and no cheap lending…

Rent won’t be seen as throwing your money away.

Same situation here. Neighbours are selling their houses, similar to mine, for 240K€ (bought new 5 years ago for 120K), to go to live in nicer 300K ones. If the market crashed, say, by half, I’d happily sell again for 120 and buy a 150 one. I don’t think the stupidly inflated price of a house I 'm using to live in and would need to replace if I sold it has anything to do with my real net worth.

This is only applicable to people with idiot ARM loans. We have a fixed mortgage rate. We’re not affected and, as a plus, we get to own.

I’m currently trying to sell a house in SE Michigan (I know, should just go ahead and slit my wrists now). And hoping to buy in NC as soon as the Michigan sells, assuming hell hasn’t frozen over by then. Meanwhile, just trying to familiarize myself with what’s out there, what neighborhoods I find desirable, etc. This mess with the crash is a good reason to wait a while, but I am also driven by not wanting to have to sign another year lease on the current rental, which would push me back to buying until Summer 2008.

Meanwhile, I’d be interested to hear more about how you are doing the research you mentioned, Slyfrog. I’ve checked a number of MLS listing sites, including their .net, and I don’t see the sort of research tools you mention–for example, the ability to find already sold properties with selling price, etc. I’d love to start tracking properties closely enough to, as you say, show up at the seller’s agent doorstep with verifiable data showing comparable pricing, etc.

I keep hearing this repeated all over the place, but it’s not even the best part of the Wall Street Journal story. The BEST PART is that the quote followed an anecdote in which a 70-year old woman, who was in danger of foreclosure on a $900 a month mortgage, was talked into a super-duper-special-secret loan by a cold-caller from New Century in which she made no payments for two years, after which her mortgage ballooned to $2200 a month. Yes, she left the income section of her application blank, and yes, the loan was approved.

Hell no, this is fantastic news. Foreclosures forcing unethical lenders out of business is great for the rest of us, especially those 20 somethings and even 30 somethings that have been unable to buy their own house because of astronomical prices now have a better chance of doing so. An increase in foreclosures means more inventory on the market, which is AWESOME for buyers. Just imagine all the desperate sellers and bankers ready to make a deal to get the debt off the books.

Short of a nuclear war on American soil, I’m hard-pressed to think of anything decreasing the value of American real estate any time soon.

A friend of mine works in the underwriting group of a mortgage company, and they do try to be diligent about this stuff, but it’s as flawed as any other process. Loan officers and applicants will make up numbers, revise them later on just to make them fit acceptance criteria, obfuscate their true income, hide their debts, and so on.

The underwriters are still supposed to catch that, but there’ll be someone somewhere who’s too overworked (they’ve been crazy busy for years now), too naive, undertrained, no longer caring, pressured from above…

Good for her. I mean, she’s already in danger of losing her house and somebody offers to let her live there for free for two years and then lose her house. Sounds like a no brainer. Presumably she left the income section blank because its irrelevant; you don’t need income when you aren’t paying the mortgage.

Let me give you a verifiable example that works in my area. Go to www.minnesotahomes.com. Click on the “Property Search” tab. Then click on the “Twin Cities Solds” tab. From there, using the filtering tools on the left side of the screen, and the map, you can look at areas and determine sold prices in the area within the last 6-24 months (depending on how you set the filter). It even pops up little “pins” on the map for you so you can see at a glance where things sold, what price, etc.

Now that obviously works for the Twin Cities, but I imagine there is something similar for almost any large metropolitan area.

There’s a couple problems there…
why does a 70yr old still have a mortgage?
why wouldn’t she sell it and buy something she could afford?

I’m hoping for a huge pop…hopefully I can get a Mcmansion for $100k!

I am vindicated. Again.

Just sold mine above market value- dodged a bullet.

This varies by area, though. Some places get hit much harder than others, so I always take these articles with a grain of salt. In CA, it’s a BIG deal. Down here in the SE? Not so much. When you can get 15 yo (or less) houses with 1800 sq. ft. for $130-$160k, adjustments are MUCH less of a problem.

Are there general MLS sites you can use? Id like to start watching prices in my area of Florida so I can have a better handle in a year or two.

Looks like the smart people are in this thread… :)

http://mls.com/

Weee. That site just showed a house that is 1 bedroom, 1 bath, 1794 sq feet for… $6,950,000 unfortunatly they want me to do a free trial (which will likely result in junk mail / email out the whazoo) to see more info.

The town I live in is a “working industrial town”, not anything remotely close to a luxury community with rich people. Id love to drive by that place and see what a 7 million dollar 1 bedroom / bath house looks like. Maybe they have a tree which has golden apples on it in the front yard.

Maybe they said bath when they really meant olympic swimming pool?

Well, it appears that Senator Dodd may just bail everyone out and stop the foreclosures:

U.S. lawmakers will have to consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes, Senate Banking Committee Chairman Christopher Dodd said today.

``The impact of losing 2.2 million homes I suspect will be in a lot of areas of our cities and towns that are already pretty hard hit, so we clearly want to look at that and legislate,‘’ Dodd, a Democrat from Connecticut, told reporters in Washington after a speech to the National League of Cities.

Foreclosures involving homeowners who took out subprime loans from 1998 until 2006 could cost $164 billion, Dodd said, citing a December study by the Center for Responsible Lending in Durham, North Carolina. The government needs to provide at-risk homeowners ``forbearance or something like that to give them a chance to work through and get a new financial instrument here that they can manage financially better,‘’ Dodd said.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aww3A6BGTLuQ

That is crazy talk. The only logical end is the end of western civilization, SO DO NOT BUY A HOUSE!