Realtyexec

"The fact that Americans lost nearly $880 billion in home equity might seem shocking, but you should look at that number with some perspective. After all, U.S. home equity rose by nearly $3 trillion during the recent housing boom."

Home value loss not big everywhere

http://news.bostonherald.com/business/real_estate/view/2008_… - Tue Jun 17 2008, 22:10

Did Hedge Funds Help Stabilize the Mortgage Market?

"The fact that there was an ABX index and thus an easy way for people to bet that the mortage-backed securities market would crash probably cut short the bubble--the true hedge funds were stabilizing speculators; the destabilizing speculators were (i) the funds that were long CDOs and (ii) the banks and other issuers who retained the CDOs because their portfolio managers believed their marketeers. A world without derivatives but with mortgage-backed securities would probably be a world in which we have a bigger problem than we have now."

http://www.portfolio.com/views/blogs/market-movers/2008/04/2… - Tue Jun 17 2008, 00:28

Lenders Agree to Plan To Stem Foreclosures

http://online.wsj.com/article/SB121363821436678049.html?mod=… - Tue Jun 17 2008, 00:25

Why Subprime Loss Estimates Are Still Too High

http://seekingalpha.com/article/80982-why-subprime-loss-esti… - Thu Jun 12 2008, 13:14

Nicholas

"Make no mistake an FHA is a bad loan, you have to pay the equivalent of 2.5 points upfront and you can never remove the PMI requirement. There is a real penalty imposed on home buyers by the lending industry in these markets"

FHA charges an upfront mortgage insurance premium (MIP) of 1.50% for 30 year fixed rate mortgages. It is important to note that any unused portion of the upfront MIP may be refunded within the first 84 months of the loan. Please see the MIP refund section for amounts.

Unlike in the past, the monthly mortgage insurance payment will automatically be cancelled when the outstanding principal balance reaches 78% of the original purchase price (provided that the monthly mortgage insurance payments have been made for a minimum of 5 years for 30 year loans). This was a change that occurred for FHA loan that were originated after January 1, 2001. 15 year mortgages where the home buyer makes a down payment greater than 10% of the purchase price will not have to pay the monthly mortgage insurance.

http://www.fhainfo.com/fhamortgageins.htm - Mon Jun 9 2008, 14:49

The Theory vs Current Data and our interpretation of both will always lead us in different directions, yet are equally important. I am a realist meaning i base my opinions on my reality, yet pay attention to all forms of theory and data.

"everyone needs to be suitably modest about predicting how the housing crash will end and remain flexible about the policy actions that may be needed to augment the normal functioning of the market. Some basic facts about supply and demand offer a good, if sobering, place to start."

It's Only Going to Get Worse

http://www.aei.org/publications/filter.all,pubID.28076/pub_d…

I always will show both sides to the argument, but economists predicted a .5 decrease for April also remember and look how far that was off. But informative and informational they always are. - Mon Jun 9 2008, 14:04

When people base there assumptions about the next 5 years based on resetting arms, you first need to back that up with data please as we get hammered when we speak without facts i think its only fair you do the same.

Also as i keep stating what i see is the front lines, and i am searching for some good data to establish the amount of reseting mortgages that are being adjusted into fixed loans making it easier to stay in there homes. I see a common trend for new services offering loan adjustments vs short sales. i have seen some positive results from this also. Also FHA Secure the loan specifically designed for resetting mortgages is relatively new and as Lenders are able to get the info to clients in need it will help curb some of these loan adjustments, i am not sure at what percentages but when data comes available i will post it. - Mon Jun 9 2008, 13:24

"We are seeing an acceleration in foreclosures. As foreclosures have taken off, they put pressure on prices. Banks have become more aggressive with sales on homes they have foreclosed," said Christopher Low, chief economist at FTN Financial in New York. "

"Economists polled by Reuters before the report were expecting pending home sales to decline 0.5 percent."

"In the West, the biggest trouble spot hit by the subprime mortgage crisis, pending sales rose 8.3 percent in April and they were up 4 percent from a year ago"

"FTN's Low said the pickup in pending home sales could be a sign that the housing market could soon be stabilizing.

"Sales will stabilize in the next few months and that will set the stage for inventories turning to normal sometime next year and maybe even for prices to appreciate a bit," he said.

"For now, prices will continue to fall. There is still an inventory overhang that will take 18 months to work through. The end game of the housing bust is near."

April pending home sales rise as prices slide

http://www.reuters.com/article/ousiv/idUSN0947484120080609

I think i said basically the same thing about a month ago, its easier to see whats happening when your actually part of the market not waiting for articles to support your decision. - Mon Jun 9 2008, 11:10

"(Dow went up by more than 100 pips intraday)and after the release of a better-than-expected report on US pending home sales in April. The National Association of Realtors’ index for pending sales of previously owned homes rose 6.3% to 88.2 from March, and this is the highest level in six months.

The surge in buying activity is mainly concentrated in zones which saw double-digit price declines."

One Reason for Pending's increasing in multi-digit loss areas as i have stated before "REO MARKET".

And Carl your comment earlier about taking a month or more is true for short sales, but i am talking about Bank owned offers 3 days i have seen as a max and we have been making offers daily on these listings and are getting outbid about 70% of the time.

Pending Home Sales Help Dollar Recover

http://seekingalpha.com/article/80573-pending-home-sales-hel… - Mon Jun 9 2008, 10:47

Realtyexec, one question for you. You mention the banks being very motivated sellers earlier, but whenever a surf around on these boards, there are probably 10 new posts a day about people trying to buy a foreclosure or a short sell and the banks don't respond for weeks to months, and if you have any questions, or try to get them to fix something, you're looking at even more weeks. While I believe the banks don't want to be holding this inventory, the large number of questions and responses to those questions on this site have shown that banks may not want to be holding houses, but they certainly aren't motivated to move them.


This is my opinion only and only personal experience, but when dealing with short sales they are not real foreclosures yet. The service providers are more likely overwhelmed and not motivated to accept your offers for many reasons. Ill list a few, incomplete short sale packages, incompetent Realtors representing the sellers, bogus offers at low ball prices that clog up the system, and so much more. The current short sale market is a shamble any knowledgeable Realtor is educating there clients about the % of short sales that actually close.

The Motivated banks are not as interested in short sale transactions, it is the Already Bank Real Estate Owned or REO Listings. These are the banks that are actually getting multiple offers and getting back to you in a normal time frame 3 days max. These REO's are being liquidated at a pretty good rate compared to short sales its night and day. Most times you hear people talking about foreclosures they talk about short sales in the same breathe but this is not the case.

Also it is really hard as a normal person to find an acurate list of REO's on the internet, even with the new MLS data agreement that just passed. We are able to search REO or Bank owned properties on the MLS easier, and we know they are accurate 99% of the time. Most public MLS's dont have this searchable, and all these foreclosure sites have you pay for information, but its hard to cross reference the bank owned REO to actuall listings.

Hope i didn't confuse you.

The big difference is also that a short sale is not inventory till it has foreclosed, they are clearing the REO's first.

Hope this helped.

A new site that i stumbled upon http://www.realquest.com/jsp/rq.jsp?action=switch&page=main - Mon Jun 2 2008, 14:18

The typical analysis one sees in the financial media takes a superficial approach. It assumes that all inventory is "real" and does not consider either "latent supply" at higher prices nor "latent demand" at current or lower prices.

Investors interested in housing problems -- and we all should be -- must consider how both supply and demand curves will change in a dynamic environment. Looking only at the apparent supply, and assuming that sellers will eventually reduce price offers, is a mistake.

What is "Inventory"?

http://oldprof.typepad.com/a_dash_of_insight/2008/05/what-is… - Sun Jun 1 2008, 00:04

Different Views on Housing Supply

I have been reading with great interest recent articles on the current housing market. The recent Case-Shiller report shows average home prices have fallen 14% over the last year and there is currently an 11 month “inventory” of 4.55 million homes. This report has widespread news reporting, but there are other reports out there that paint a slightly different picture. I would like to reference some of these reports with a little analysis of my own.

First, let us talk about housing “inventory”. Jeff Miller at A Dash of Insight has a nice discussion on the errors of mass media discussion of housing inventory. He points out that the difference between motivated and unmotivated seller and demand of buyers changes tremendously with pricing and perceived price directions. I have put housing inventory in several classes:

* New home building: This is the only source of new inventory, all others are existing homes someone is trying to sell. Home builders have slashed new construction and managed to sell the bulk of their existing inventory. This news release from the California Building Industry Association - New-Home Production Remains Weak in April, shows that California home builders will build the lowest number of homes in 2008 since records were started right after WWII. Further, the 80,000 new homes this year and 92,000 projected for 2009 are well below the 200,000 that are needed annually to account for population growth in the state. The results (from the press release):

Furthermore, if the current projection comes true and we build the lowest number of homes since at least World War II this year, the current increase in affordability could quickly turn around when the pent-up demand for new housing starts outweighing the supply.

* Finance foreclosure homes: This is a significant portion of available housing “inventory” and is owned by extremely motivated sellers–banks. This is the portion of inventory that is both pulling down prices and offering buyers tremendous opportunities. This article (subscription req.) from the Wall Street Journal documents that sales are increasing in the hard hit areas of the housing meltdown: Las Vegas, Sacramento, CA, Ft. Myers, FL and inner city Detroit. Quote:

In the Las Vegas area, sales of single-family homes in April were up 30% from a year earlier. The Greater Las Vegas Association of Realtors says properties being sold by lenders account for more than half of recent sales.

I wrote earlier here on the positive sales reports from Sacramento, where a large amount of foreclosed homes are being snapped up by value conscious buyers. In many areas of the country, once potential buyers believe the prices of foreclosed homes have leveled many will jump in to buy and get a “deal”.

* Motivated sellers: These are those homeowners who really need to sell. They fall into two camps. Those who purchase at the price peak and are having trouble with their mortgage, but are not willing to let it go to the lender. These are very motivated, but may not get the price they want/need and go with another option, like mortgage work out. The other camp is those who need to move. If they purchased the home before 2004, they are most likely still have equity or a house payment that makes renting out the property and option.
* Unmotivated sellers: These are sellers who do not really need to sell, for example, retirees who would like to go buy a repo in Florida, but remember the prices of a few years and have listed their homes at unsaleable prices. Let us call this “dream inventory”, because these homes only sell in the owner’s dreams.

When we look at these classes of inventory, it is apparent that foreclosures are the driving factor in current housing sales. Sales figures from scattered areas of the country show pricing for bank inventory has started to reach levels to bring out additional demand. Once public perception is that prices have stopped falling, demand will increase significantly, most likely starting serious bidding on most bank owned real estate. Because home builders have very few homes starting or in inventory, there will be no outlet for heating up demand. Individual home sellers will start moving up their asking prices as the 3rd alternative for home buyers who do not want to miss the “bottom”.

At this time I am looking for more of a leveling of prices and sales, with new home sales continuing to fall. True growth in home sales and prices are dependent on availability of financing and interest rates. At this point, almost all financing must meet Fannie/Freddie guidelines and these are dependent on what the politicians accomplish.

http://seekingalpha.com/article/79479-different-views-on-hou… - Sat May 31 2008, 22:47

(Page 2 of 2)

There are two problems with buying a house in this situation. The first, plainly, is the extra $1,000 you’re paying each month for the privilege of owning, on top of the thousands of dollars you spent on closing costs. The second problem is that a rent ratio above 20 is a good indication of a bubble. When the prices of houses get out of line with the competition’s prices — that is, those in the rental market — a correction is coming.
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The question facing my wife and me was whether we were entering the market before the correction had gone far enough. I really didn’t know what the answer would be. So as we looked at houses, I started calculating rent ratios.

In the neighborhoods where we were looking, two-bedroom condominiums were selling for $400,000 and being rented for about $2,100 a month, which makes for a rent ratio of 16. Four-bedroom houses were selling for $700,000 and being rented for almost $4,000, which makes for a rent ratio of 15. No matter the price range, pretty much every apples-to-apples comparison produced a similar ratio.

Historically, this is still a bit high. But it’s very different from where the market was just a couple of years ago. With house prices having fallen over the last two years and rents continuing to rise, the decision became a much closer call. We would now have to spend only a little more each month for the privilege of owning.

Earlier this month, we found a house that we really liked, and we made an offer. It was accepted.

I’m still not sure how good our timing was. Based on the backlog of houses on the market, I fully expect that our new house will be worth less in six months than it is today. I’m also not sure that we would have been willing to buy in Boston, New York or much of California, where the rent ratios remain above 20, according to data from Moody’s Economy.com.

In fact, if you’re now renting — almost anywhere — and do not need to move, I’d probably recommend that you wait to buy. The market is still coming your way.

But it’s O.K. with me if our timing wasn’t perfect. After several years of reporting on the housing market, I’m convinced that the most common real estate mistake is viewing a house first as a financial investment and only second as a home. That’s one big reason we ended up in this bubble-induced mess.

Most of the time, the decision whether to rent or buy should be based above all on life circumstances. Do you expect to move again in a couple years? Or is there a good chance that you’re ready to settle in — and stop worrying about real estate for a while?

The housing bubble, unfortunately, forced a reconsideration of this standard, because houses became so overvalued. But they’re slowly coming back to reality, which means that buying has again started to make sense for more people. Apparently, I’m one of them. - Tue May 27 2008, 14:58

I think That New York Times Article that Bayou posted needs to be Posted again in its entirety.

Time to Buy? The Conversion of a Renter



By DAVID LEONHARDT
Published: May 28, 2008

For the last few years, I have been an evangelist for renting.
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I’ve told my sister-in-law and her husband that they would be crazy to abandon their reasonably priced one-bedroom rental in Brooklyn. When two of my colleagues were moving to Los Angeles, I e-mailed them a spreadsheet that helped persuade them not to buy a house there. That same spreadsheet was the basis for an article in 2005, when I argued that “renting has become a surprisingly smart option.” Last spring — like any good evangelist, comfortable with repetition — I wrote a similar article.

The case for renting has been simple enough. House prices rose so high in the first half of this decade that you could often get more for your money by renting. You could also avoid having a large part of your net worth tied up in a speculative bubble.

All this time, I have been a renter myself, first in the New York suburbs and then in Manhattan. But my wife and I will be moving to Washington this summer. And the housing market has, obviously, changed quite a bit since our last move in 2005. Nationwide, prices fell 14 percent from early 2007 to early this year, as Standard & Poor’s reported Tuesday. Home prices almost certainly still have a way to fall, but they’re now well below their peak.

So my wife and I began our search with open minds, willing to consider renting or buying. We ended our search by signing a contract to buy a house.

This is the story of my conversion.

•

One of the big lies of the real estate business is the idea that renting a home is tantamount to throwing money away. It’s a useful fiction for real estate agents, because they make vastly bigger commissions on house sales than rentals. But the comparison isn’t nearly so straightforward for the rest of us.

Renting involves one obvious, recurring cost that can never be recouped: the monthly rent check. Buying, on the other hand, involves multiple expenses, some of which aren’t so obvious. On top of closing costs, there are repairs, property taxes, mortgage principal and mortgage interest. (The mortgage-interest tax deduction reduces this last cost but doesn’t eliminate it.) When you own, you also lose the ability to invest your down payment elsewhere, like the stock market.

Of course, owning also brings benefits that have nothing to do with money. You can settle into your home, confident that no landlord will kick you out. You can repaint the walls and redo the kitchen. All else being equal, owning seems far preferable to renting.

Knowing all this, my wife and I were willing to buy a house even if it was ultimately going to cost us a bit more than renting. We just weren’t willing to have it cost a lot more than renting.

Over the last several years, I’ve come to like a simple, back-of-the-envelope way to compare the costs of renting and owning. You find two similar houses, one for sale and the other for rent, and divide the sale price by the rent over a 12-month period. You can call the result the rent ratio.

The concept will probably sound familiar to stock market investors. It’s the real estate market’s version of a price-earnings ratio — a measure of how expensive an asset is, relative to the underlying economic fundamentals. Like a P/E ratio, the rent ratio provides something of a reality check.

Throughout the 1970s, ’80s and ’90s, the average rent ratio nationwide hovered between 10 and 14. In the last few years, though, it broke through that historical range and hit almost 19 by the time the housing market peaked, in mid-2006.

And while home prices — and rent ratios — have always been higher on the coasts, they reached whole new levels recently. In the Washington area, the ratio went above 20. In Boston, New York, Los Angeles and south Florida, it topped 25. In Northern California, it approached 35, higher than it had been in any city, at any point on record.

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership well exceed the cost of renting. At current mortgage rates, for example, a $500,000 house would typically bring monthly expenses of about $3,000 (taking into account taxes, repairs, a typical down payment and, yes, the mortgage deduction). When the rent ratio is 20, that same house could be rented for only about $2,000 a month. - Tue May 27 2008, 14:57

RealtyExec - First you point to a few articles in the media claiming the market is great, then you imply people are dumb for waiting for until "the media says its a great time". Should we or shouldn't we listen to the media? I personally wait for numbers rather than the media's spin on them.



Aj i don't take anything the media says as a truth on the good news or bad news, i just post it only so i don't get belittled for not providing any data. Most of the posters anti-buying only post articles to support there claims, so i just do the same. If i were to actually lend just an opinion based on what im seeing in my market i doubt anyone would listen.

Whats particularly amusing is when i have posted valid data most of the time its ignored, but when one index comes out you guys pump your chests like see i told you so.

Read back to the last 10 posts of the articles i have contributed, i have posted the good news as well as bad news. Just because it has been more good than bad lately doesn't mean that i am writing it, its just what people are talking about.

And also look at my last posts i mentioned all negative data as a comparison to 07 #'s, but as usual know one paid attention. I am not saying its a great time to buy for everyone, i still think that takes a consultation and evaluation of your own particular goals. I am only as you are stating articles and opinions. It seems that people are scratching there chin alot more with recent article's instead of hammering us realtor's for being delusional. I only speak for my market and things are looking a whole lot better in my market.

Cheers - Tue May 27 2008, 13:49

I still cant understand people logic on this, when i have posted so many reports showing that people are buying and look on the front page of yahoo today April sales unexpectedly up. To me do as you please but i can only see afford ability finally for first time home buyers. I think its pretty clear most of your thinking is that instead of buying when this curve is down, lets wait till the media finally tells us its safe to go outside, or hey buy when this curve is rising, neither one makes sense to me.

http://news.yahoo.com/s/ap/20080527/ap_on_bi_go_ec_fi/home_sales

With the Fed saying dont expect any more rate cuts, and curves such as this showing pricing declines at a great amount. Also watching my particular market rebounding. Well i can make my assumption about what is about to happen. When i look at this curve i also keep seeing more people that will now qualify that have been waiting on the sidelines,

Here is a reason again to back my point that the banks are creating the bottom or already have last month.

Home sales rise in hard-hit areas

Buyers snatch up foreclosed properties after big price cuts.

http://www.moneyweb.co.za/mw/view/mw/en/page94?oid=208450&sn…

http://latimesblogs.latimes.com/laland/2008/05/foreclosure-f…

But hey like we still will wait it out, and when things look better and the media says its a great time to get a deal guess what there will be 5 other people right there next to you overbidding again driving the prices back up. I don't think we will ever see a rise like we just saw, but i do see stabilization taking place as we speak, and i commend the banks for taking huge losses in order to set the tone.

I speak for my general market every market is different, but you should be paying close attention. - Tue May 27 2008, 09:28

Conditions ease a bit for first-time buyers

A quarterly report from the California Association of Realtors this week said that 44 percent of California households could afford to buy an entry-level home in the first quarter of 2008, up from 26 percent in first quarter 2007. That's also up from 33 percent in the final quarter of 2007.

The reasons for the buyer-friendly shift in the First-time Buyer Housing Affordability Index, as you may have guessed: Home prices have fallen, and interest rates too.

The report says a family would need an income of $67,830 to afford a home costing $356,350 (which I think is 85% of the state's median house price in the first quarter, if I am understanding the group's release correctly), based on an adjustable-rate mortgage at 5.65 percent, and a 10 percent down payment. CAR's release doesn't say what percentage of the buyer's income is going for housing expenses (mortgage, taxes, insurance).

In Santa Clara County, the report said 31 percent of households could afford the area's entry-level home, up from 24 percent in the fourth quarter of 2007. San Mateo and San Francisco counties had the state's worst affordability, at 22 percent and 23 percent respectively.

http://blogs.mercurynews.com/realestate/2008/05/23/condition… - Sat May 24 2008, 23:50

I understand AJ, but i only post the articles and to me any gain that big needs to be looked at especially when everyone says know one is buying or should buy, That figure right there cannot be disputed. Also your comment about this is based about seasonal and a normal markets sales. So that means you are basing that argument on us being in a normal market, which is fine. But so many other posts claim the opposite.

I agree about the stock market analogy about trying to call bottom, its almost impossible.

Those that know and understand what is happening in the REO department understand that the banks are creating the bottom. Ive said this in previous posts that i feel the bottom is being set as we speak with REO pending and closed listings, These listings are creating REO comps, that other banks as well as them selves will use as there bottom. If most of these banks are getting at least 2 offers and in most cases 3-4, and selling in a relatively fast DOM compared to normal seller listings are short sales. Well then you can make your own judgment of what you would do next time you priced an REO Comp.

When these REO's came onto the market there was no REO comp and short sales are priced ridiculously low some times, so a REO also had to be priced aggressively. But now New with the pending and closed data in my opinion banks will price at the same or higher. If an REO is sold in your area it might be the measuring stick to how low it will drop. I have seen other REO's come on and priced typically within 5% of the closed REO, and sometimes even higher.

So i would pay close attention to these numbers in your area. - Sat May 24 2008, 11:46

Home sales see first monthly gain in 6 months

Changes in Bay Area home sales, prices
+33.3%

Increase in existing single-family home sales from March to April 2008
-14.2%

Decrease in existing single-family home sales from April 2007 to April 2008
-26.4%

Decline in median sales price of existing single-family homes from April 2007 to April 2008

Statistics provided by DataQuick


http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/20/…



Price 12/31/07


Price 05/19/08


Change

Beazer (NYSE: BZH)


$7.43


$8.14


9.6%

KB Home (NYSE: KBH)


$21.60


$24.49


13.4%

Pulte (NYSE: PHM)


$10.54


$14.26


35.3%

Ryland (NYSE: RYL)


$27.55


$33.02


19.9%

Toll Bros. (NYSE: TOL)


$20.06


$24.40


21.6%

Unweighted Average


19.9%

Has Housing Turned?

http://www.fool.com/investing/general/2008/05/20/has-housing… - Fri May 23 2008, 13:27

"Permit me to point to some seemingly arcane (but in fact highly significant) numbers we have lately received as evidence that the worst-case scenarios concerning cumulative subprime losses being thrown around by the rating agencies, among others, are exaggerated."

Encouraging News on Subprime Mortgage Delinquency Roll Rates

Yes, you heard that right: the housing world has big problems, but it’s not coming to an end, after all.

http://seekingalpha.com/article/78394-encouraging-news-on-su… - Thu May 22 2008, 11:33

Zack an REO is

"Real estate owned or REO is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank. The minimum bid in most foreclosure auctions equals the outstanding loan amount, the accrued interest and any costs associated with the foreclosure sale including attorneys' fees.

After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own. It will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a Realtor. Generally speaking, bank REO properties are in poor shape in terms of repairs and maintenance; however, real estate investors will often go after these properties as banks are not in the business of owning homes and so, in some cases, the low price can more than compensate for the condition of the property." - Wed May 21 2008, 10:02

Bay Area home sales jump; Santa Clara County median house price drops to $699,500

" Bay Area home sales shot up 28.8 percent in April compared to March, a sign that mortgages are easier to obtain and more buyers jumped into the market"

http://www.mercurynews.com/ci_9323882?source=most_viewed

You can view these numbers any way you like, but it makes me know im not the only one that thought things were picking up.

Hoping the Housing Crisis Is Over

http://seekingalpha.com/article/77620-hoping-the-housing-cri…

Predicting bottom of housing mess takes courage

"m. But he pointed to about 3,000 pending sales in El Dorado, Placer, Sacramento and Yolo counties last week as the most since 2005."

http://www.sacbee.com/142/story/888572.html

What most people don't realize is when new REO's are getting multiple offers which is the case at the moment, it creates a comp. These new Comps will set the precedence for New REO pricing and DOM and above or below asking price will come into effect,

Ask some Realtors how many REO's with Multiple offers are they getting and will the next bank price them below this mark. I'm not saying we reached bottom, but a bottom does not have to be a deeper drop. It could be a flat stagnant line that takes awhile to rise again. But Like most things lets watch what that Media says or those informative hate blogs. - Wed May 21 2008, 03:06

WOW

Don't Buy
Home Seller
in Los Angeles

"and occasionally picking up a property through my friend at the bank when some poor sap that was ignorant enough to get in way over their head can't afford it. I basically bottom feed and make a killing."

This made my day.

Not only did you confirm alot of the Realtors stance, but you actually contributed. LOL Man this is entertainment.

I find it funny how buying from a friend at a bank makes it automatically better than from a Realtor and thus makes it a great way to Buy.

WOW. - Thu May 15 2008, 14:14

Us realtors always have time to drop in from time to time to contribute, we are not writing novels we are only usually posting bad grammar and alot of quick misspelled words due to trying to get it done in between appts and such.

2009 Home Price Forecasts: Up or Down?

http://seekingalpha.com/article/77231-2009-home-price-foreca…

NAR Home Sales Report Shows Some Nasty Declines

http://seekingalpha.com/article/77208-nar-home-sales-report-… - Wed May 14 2008, 13:02

Home Price Erosion Will Continue

http://seekingalpha.com/article/77092-john-hussman-home-pric…

Mortgage Holders Find It Hard to Walk Away From Their Homes

http://www.nytimes.com/2008/05/10/business/10housing.html?ex… - Tue May 13 2008, 22:32

And it continues to Spin out of Control.

I cant even get to the content of some of these last posts by richard and elvis due to the fact that 90% of this insult game is continued to be played.

Richard you have almost redeemed your posts to credibility after those absurd comments about it being correct to walk away from a house and let it foreclose, because of contractual agreements.

Would you really want us to drag into this argument the thousands of other things that are legal in our country , yet the general public respects the reasons why these are legal but does not endorse them or generally as a society condone them.

There are many injustices already in our society, to use loopholes to fight your argument only belittles the actual argument. - Tue May 13 2008, 15:23

You guys have completely lost track about what your argument was about, and continue to make outrageous claims as the one richard did with out even flinching. Maybe its just me but i cannot understand for the life of me how this thinking has become normal and so nonchalant

I understand Richards post till he made that grossly exaggerated statement. I have actually agreed with alot of Richards Posts, but man this has to be someone else posting under his name. And Ryan to get on here and back up that thought. It just goes to show how far this discussion has fallen towards garbage.

ARE YOU SERIOUS YOU WOULD RISK EVERYTHING YOU HAVE WORKED FOR WITH YOUR CREDIT TO LET IT GO AND EQUATE IT TO A FLIP OF A COIN. YOU THINK THESE PEOPLE DIDNT HAVE THERE CREDIT RAN WHEN THEY TRIED TO RENT, OR YOU THINK THEY WILL MAYBE NEED TO BUY A CAR SOON AND MAYBE JUST MAYBE WANT TO USE THERE CREDIT AGAIN.

Please bring back the Guys that where posting valid arguments and valid data to back it up. I cannot believe that anyone would condone what is happening or would suggest that it would be ok to just let something foreclose. I guess you guys have that super credit that doesn't drop an avg of 250 points after a foreclosure.

JR might be disgusted, but I am truly just confused about what has happened to our society. I dont care if Im a real pro, homeowner, father, mother, or working Joe. I could never agree with these lasts posts as being normal.

Please someone take this thread back to credibility. - Mon May 12 2008, 20:08

It seems as this is a forum for those with negative feelings towards the NAR and Realtors to just come here and go off on a tangent, but it seems pretty clear that the content is losing steam. The posts are getting watered down at each end.

When someone posts a great article, it is rebutted with nonsense and a article from some obscure publication about what we have all read 100 times. We get it. So Please unless you have some insight that the last 765 posts didnt cover leave the tangents to your blog comments and niche blogs were everyone hates Realtors already.

I didn't see one response to any of the articles i posted, so i assume you guys got those arguments covered. All i hear is bickering and its coming from those that actually contributed at first, now you are just adding to all the other garbage that some members are posting. If you want to have a genuine conversation, does it have to be about bashing a member or an entire profession.

At first you thought you might be actually helping, read your last 10 posts is that still the case. - Mon May 12 2008, 15:48

Rates for jumbo mortgages finally falling, brokers say

http://blogs.mercurynews.com/realestate/2008/05/09/rates_for… - Mon May 12 2008, 00:05

Fannie to Aid Underwater Loans

http://online.wsj.com/article/SB121035864744281229.html?mod=… - Sun May 11 2008, 22:08

Calling the Bottom?

http://optionarmageddon.blogspot.com/2008/05/calling-bottom.html

The Impending Mortgage Crisis: Part Three

http://seekingalpha.com/article/76724-the-impending-mortgage…

Should We Force a Housing Bottom?

http://seekingalpha.com/article/76673-should-we-force-a-hous… - Sun May 11 2008, 21:28

- there's always the possibility (nightmare in my book) of Barack or somebody subsidizing/guaranteeing more loans to stop this fall, but short of some socialized mortgages that increases the pool of buyers. So while rents might be rising, they're very far away from where they make sense.

Im not sure if it will Barrack or not, but i do feel that this presidency change will have a major influence on our market. This is the reason why i cannot agree with most of what you guys are saying. I can also not predict or back up the market stabilizing. Why? Because we don't know who the president will be or there agenda to correct or leave alone this market to correct itself. This is a major influence alot of you are leaving out.

And about your socialized mortgages that increases the pool of buyers. Are you guys not understanding the signifigance of what these new FHA loan limits have done. In my area Santa Clara County or Silicon valley, we more than doubled the amount of buyers we could put into an FHA loan that is huge. We went from 362K max loan amount to 729K. I cant see where people don't understand how this will effect the market. - Sat May 10 2008, 11:01

Yes, interest rates are low. I used that as part of my argument for why now is a good time to build, assuming inexpensive land.

Im not sure what construction costs are in your area or land costs, out there. There are so many homes available right now that are bank owned that you could not possibly build for cheaper. Alot of builders are also taking huge losses, when you take into account those homes vs your building project plus holding costs, permits, increasing costs of material i don't know if that holds true for the typical house. There are always projects that will be cheaper, but as a whole i cant see this being the case. There is just to much bank owned homes that are = to or below the price per sqft it would cost to build.

Are there any builders that would want to do a scenario building a home vs buying a bank owned home new construction. - Sat May 10 2008, 10:52

Nice Post Richard

Its great that you can see the value in some of us like Paul Francis. I also see the benefit of this argument, but to a more civilized level. I do think this thread will be a great benefit to those on the fence whether they see light or the darkness.

Keep the articles coming its almost like i don't have to search the internet for information i can just come here for my updates.

Cheers - Fri May 9 2008, 21:03

Ive held my tongue as long as i could after being emailed to my office and called on our 1-800#. By mad Trulia members hoping to harass or get me in trouble.

By non-Realtor contributions you mean those sitting on the sidelines with no actual stake in any of the content they have to offer. I myself have posted positive as well as negative articles about the current market, i don't spin the positive articles any more than the negative articles. Like all stories there is your story, my story, and the actual story. Unfortunately for us the actual story is out of our grasp on a factual basis. We can only interpret data based on our own views and only interpret other peoples interpretations of data based on there views and biases. That being said are any of us any step closer to really understanding what is to happen next. I for one don't think i can predict anything let alone this type of market. Thats why i don't, and i don't make outrageous claims for either side.

As a professional i am aware and continue to inform myself of all the positive as well as negative reports coming out daily, am i naive to think those reports will be factually accurate. No. I am a realist if anything and i realize that if i were to bet my clients decisions based upon the opinions and interpretations of NAR or Any other index I would be doing my clients a great disservice. I will tell them what there payments will be make sure my lender qualifies them and in detail explains to them there loan. I will negotiate the best deal i can on whatever property they decide to buy. This is my job.

What you people don't understand is people have already made up there minds whether they will buy or rent based upon there own beliefs. When they come to me it is not my job to persuade them to buy vs rent. I can only simply do the numbers give them the data, for them to interpret. Most the clients that are curious and on the fence will make there decision based upon what they really wanted the moment they signed the contract and got the keys, or backed out and got there deposit back. There are many of you and i know it feels like the majority, who feel it is our fault as Realtors. But to you i say if it makes you feel better by all means blame us. As i whole i cannot defend each and every Realtor, and i would not waste my time doing so. I can sit here and post many different articles on who i think is to blame from the borrowers all the way to the government, but at what accomplishment. It would not make me feel better. When i woke up those problems will still be there.

To Mike and all those that think that arguing on here will make a difference, if you want to make a difference in the way the Real estate market is structured do something about it. These small words will only continue to flame more nonsense and fake posts from negative people. If you want to help do something that involves action, the only way to change the system is to be part of the change. Those that sit on the sideline will always be bench players.

My actions that i take up daily is living up to my professional responsibility as a Realtor and owner of numerous entities. I can only train those beneath me to conduct business the proper way, and to make sure each client i have is a voice for me to the rest of the community.

I know it sounds cheesy, but you can make a difference if you want to. You can also just complain and complain, hoping you are making a difference. I would hope you would choose the first one.

Cheers - Fri May 9 2008, 18:49

HOUSE LEGISLATION

The broad package approved by the House would retool the Federal Housing Administration program to guarantee up to $300 billion in home loans when a property has declined in value. Lenders would have to erase a portion of the original loan to secure a government guarantee on future payments by a homeowner. It would also give first-time home buyers a tax credit of up to $7,500, let states issue $10 billion in tax-exempt bonds to refinance loans and create a tougher regulator for Fannie Mae and Freddie Mac.

The Congressional Budget Office estimated the bill could help as many as 500,000 homeowners and would cost the government an estimated $2.7 billion.

FACTBOX: What has the U.S. gov't done to fix housing crisis?

http://www.reuters.com/article/rbssFinancialServicesAndRealE… - Thu May 8 2008, 19:56

"Kleinhenz repeated earlier CAR predictions that the number of home sales in California may have bottomed out and are starting to pick up in recent months. CAR forecasts that 332,100 single-family homes will sell this year, down 6% from last year. Sales peaked at 625,000 house sales in the state in 2005, CAR figures show."

CAR Forecasts 24% Price Drop for California Houses

http://seekingalpha.com/article/76279-car-forecasts-24-price… - Thu May 8 2008, 19:25

I find it pretty concerning that a member of Trulia would take time to go to my office website feel out a lead form that by the way that gets emailed to me anyways, and complain about me be being "while being incredibly abusive, argumentative and dishonest"

I wont use your name and or say more about it, but i see this as a greatly disturbing. I would hope that before contacting my website, that is made for clients you would take time to contact me. If I in any way came across as anything but argumentative i apologize. I just feel that i needed to address this thread with some input. Until this email, I actually felt like i was contributing and giving a different perspective to the subject.

I can see now that people really will do anything to prove a point. By the way thanks for your email, i will not disclose more but just understand that there is know one above me to complain to in my office, so you reached me point taken and if anyone took any of my posts as harassing i apologize to those that did.

I am just let down that we cannot have a real conversation on topics as important as this one.

Cheers. - Thu May 8 2008, 13:21

"I guess you're only guilty of attempting to deceive those of us in this thread, but creating false impressions of reality."

False impression, FHA is not an illusion. Those guidelines were made by your govt as well as mine. I casually stated that it is not as hard to qualify as everyone thinks, or as Ryan posted. He stated his opinion of what he thought qualified or was acceptable. That is not always the case, and FHA will qualify lower ficos and low down payments, so to sit here and say they don't is a blanket statement that i addressed.

I don't know why i am under attack for knowing some FHA guidelines and understanding which of my buyers and which ones don't qualify.

You guys are missing the point FHA is there for buyers that can afford to buy a home the person qualifying has to provide full documentation to support there income. FHA is not stated with no money down. If a person qualifies with his income and his Debt to income ration is within guidelines then why would they not deserve to buy a home. FHA is strict on full documentation, and if the client can prove his income is stable and justified then who are we to judge.

I'm not going to bore anyone here with the reasons and ways FHA, i just addressed a false statement and I'm now being attacked for bringing it ti light that there are Loans out there for Low Fico's.

Also since everyone loves posting facts. lets see some #'s on foreclosed FHA loans.

BY THE WAY THIS GUIDELINE WAS NOT MADE UP YESTERDAY. So i don't understand the shock and outrage. - Thu May 8 2008, 13:03

And Per our In-house Retail Lender a 580 fico will only allow you to borrow up to 500K loan amount if you have a 600 fico you can qualify to the full 729,750 loan amount that is the maximum allowed in most counties i work with.

Each county is different you can check your FHA Loan limits here.

https://entp.hud.gov/idapp/html/hicostlook.cfm

Our in-house also lends in 47 states as well, if you ever need a referral rich. - Thu May 8 2008, 12:50

No realtyexec, you clearly stated that a person with a 580 FICO could qualify for such loans.

A 580 Credit score does fall within guidelines of FHA. I am not backpedaling from that statement if you were in the business or ever looked it at FHA rate sheet you would clearly see 580 Fico in there.

This is of course if you qualify with the other FHA guidelines. Not that all 580's qualify as much as all 700 might not qualify. They have to coincide with other guidelines. - Thu May 8 2008, 12:44

""Realtyexec: but the FHA guidelines state that one may only use non-traditional means of proving credit worthiness if the FICO record is too thin or non-existent, it isn't to be used as a replacement for a bad FICO score as you suggested.

I'm sure that using it as a replacement for a bad credit record is a common form of fraud, but simply put, I don't see any evidence that people with lousy credit are actually able to get the loans you suggest are available. Furthermore, the $500k loan you mentioned would only be available in a minority of markets, and it would not necessarily be comparable to a loan by an 800 FICO score high earner, because such a person might get their loan without FHA involvement, at lower rates.

Given additional context, it almost seems as though you're promoting fraudulent FHA applications, with improper use of non-traditional creditworthiness applications. In fact, it seems that you were fairly clearly attempting to deceive either the readers of this website, or the FHA. I hope it was the former, since while that's evil, it's not a felony.""

How am i promoting anything fraudulent. FHA Loans are government backed loans and there is no way you will be able to get away with any form of fraud, your statement that i condone or in any way promote it is slanderous and pretty pathetic as a rebuttal.

I clearly stated if a client is to have NO FICO score when you run there credit FHA GUIDELINES permit you to use 4 nontraditional tradelines. YOU CANNOT REPLACE A BAD FICO SCORE! I dont even know what that means if your score is 520 thats your score other than extensive credit repair i dont see how you can replace that with a nontraditional tradeline.

If there is no fico score meaning no scores some up on all 3 beaurueas then you take the FHA guidlelines that "THEY MADE" not me. I simply follow FHA guidelines.

Also yes you can get a conventional loan with a better rate if you don't want to go FHA. But that was not my point, there are many reasons why you would rather have a FHA loan vs Conventional and vice versa but i will not go in to detail here about it here. Your bank or lender will be the best person to help you understand why you would choose either one. But the fact remains there are reasons why an 800 score would go into a FHA vs Conventional.

I am stating facts, and if someone wants to throw out a false statement i will let them know that it is incorrect and show them what is correct. I did not make up FHA's guidelines but i do have knowledge of them and when someone talks like it is fact and it is not, i feel the need to address it. The same way you are addressing my statement. - Thu May 8 2008, 11:54

Realtyexec: who exactly is it that is backing these non-conforming, 97% LTV mortgages to recently bankrupt, sub-prime, non-citizens who received $15k as a gift?

FHA with new loan limits due to stimulus package. They do resident aliens as well as those applying for citizenship with working work permits. No Tin #s. you can even qualify with no fico score with 4 non-traditional trade lines. You just have a bit higher rate. - Thu May 8 2008, 10:22

"Joe Sixpack"--used to be able to buy a multi-hundred-thousand dollar house with no little or no money down, regardless of his credit rating. Today, the "regular buyer" needs to put up about $45,000 in cash to buy his "average priced" ($225,000 or so) home--AND he needs a very strong credit score"

This is not the case a client can still qualify right now on a 500K loan amount with a 580-600 credit score 1 year out of a bankruptcy and not even have to be a citizen with only 3% down and that 3% can be a gift. Also there 30 year fixed rate would be the same rate a person with a 800 fico would receive through FHA. So your statement is not entirely true. In your case the minimum they would have to put down would be around 8K and have a 580 FICO. Sounds like these Sixpack guys can still buy homes to me. - Thu May 8 2008, 10:07

Hey Deborah good to see you its been awhile, I'm glad you have stayed around to try to be some voice of reason with all the mob mentality going around.

To me Trulia has always been a great place to voice an opinion but when i left awhile back it was do to unregulated threads such as this one. We can keep to argue but at what end to the consumer that Trulia targets,or we target to actually help.

It is a lose lose. I guess the business of the market has kept me distracted, but Trulia has always had a soft spot in my time dedicated to the internet.

Opinions such as these will always be the motivation to create a stronger trust with each individual client i work with or anyone under my management works with.

Roger i know your reading haven't we had enough worthless posts. Can we discuss a new topic, as it seems everyone has chosen there side. Lets create a New forum to discuss. Being a Forum for voices are we really voicing anything new worth listening to? - Wed May 7 2008, 21:17

I could care less about any of these articles as "fact" as those that are working understand it is subjective to our own market.

This is the rebuttal to that article as some Yahoo will soon post this link as the next best thing since sliced bread. Well hey hate to break it to you, they are all opinions and only Nostradamus holds the key to the universe's futures.

The WSJ Is Wrong on the Housing Crisis

http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-th… - Wed May 7 2008, 20:58

"the gains are going to a small group of people, and that most Americans are doing significantly worse than they were 10 years ago"

Welcome to America. I could go on about this even in my tax bracket this is everything and nothing. Read Buffets response to Taxes. - Wed May 7 2008, 20:51

"It's just a sensationalistic headline"

Welcome to our world Rich. - Wed May 7 2008, 20:42

"in three months I'll become a lawyer and charge people $300/hour for my services."

Three words for you maybe two "PRE PAID LEGAL"

If anyone think that that service will replace a Lawyer well hey maybe they think that looking over a contract is worth the 30 dollars a month or whatever the price is that the pyramid sales approach tells you to take.

My point being maybe prepaid legal does fill a gap just as much as a service as redfin, but the educated or mind you informed buyer would understand the difference of being represented by a 1-800 # compared to a local professional . I think both business have found and are filling a Niche, but a Market is alot bigger than a Niche. And 10 dollars an hour for a Realtor, man if anyone is delusional it is you mike. Like Ryan says you just make anything you say incredible with statements like that.

So good night all you out there and i hear the monthly service for a 1-800 doctor is the next big thing.

I got telemarketers that are waiting to hear from you if you really believe this will help you.

Cheers - Wed May 7 2008, 20:18

If you made money as a VP in 3 franchised real estate firms, i think you are just as much to blame as a Realtor. You made money off this problem just as much as anyone else. - Wed May 7 2008, 16:18

"corporate operations just laid off 35 VP positions"
"'m 49 and have held VP positions at three of the top national franchised real estate companies"

Ok now things are starting to come into perspective, but i may be speculating on this one. - Wed May 7 2008, 15:43

Thanks Paul great post.

And Mike i have no words or enough care to even argue your last post. But hey keep it coming if it makes you feel better or you think its an actual contribution. - Wed May 7 2008, 13:33

Wow is this thread becoming biased in 2 completely different directions.

First off New responders to this thread please read through the other 100 answers of its a great time to buy due to inventory and rates. Although that may or may not be true its been stated over and over, please contribute in a more informational way.

Now Mike man you sound bitter, and thats ok. We each have our opinions and are always entitled to them. But your argument also sounds like the other 100 posts from angry people blaming NAR, commissions and Realtors.

Lets just either provide some new insight explore another topic inside this topic or close the thread its been exhausted at end. There are tidbits of great articles, but more than not garbage.

Cheers - Wed May 7 2008, 12:50

It has nothing to do with the bottom of the market. These people with a foreclosure on there credit if there lucky with FHA guidelines would have to wait 3 years to buy a home. And that is with a legitimate hardship. bottom only is about prices. It can hit bottom price wise yet stay stagnant or show increases of minimal percentages, yet that does nothing for families out of homes. Houses vacant due to foreclosure and torn apart by angry borrowers are becoming common. These houses will take awhile to get back on the market as a rental if a investor picked them up to rent. I just am looking for an insight into peoples minds about the whole cause and effect of foreclosures besides real estate prices, banks are absorbing these losses daily. What about the ripple we cant see coming in rental.

But i guess like most things in life when the media tells us there is a rental issue then its legitimate and more than likely common knowledge right? I always talk to investors about certain investments and one think remains true most of the time once your neighbor or coworker starts talking about hey the next big thing its probably to late and real investors are on there way out selling to the poor guys with speculating minds. - Wed May 7 2008, 11:40

Richard i think all of us need to stay on topic or create a new when where we can provide more valuable information.

Your plan not sure it would work, due to the many tax implications of homeownership. There are plenty of lease options available to all the weary out there. Look into them.

Also would someone address the question i asked earlier about rental market predictions. We have so many people watching this thread i would think someone would have data, as everyone has provided so much data as why the market is free falling with no bottom in site.

Since everyone is speculating what is to happen in real estate, please someone speculate about rental market. - Wed May 7 2008, 11:12

I only speak from personal experience and have no need to try to speculate what will happen. I deal with today and help my client understand today's market. Having wrote 3 offers in the last 30 days all on REO properties all have have had Multiple offers and the banks are doing a great job getting these in contract fast. So while alot of people wait for the bottom and speculate, buyers are out there buying and facing competition.

Wether its the right time to buy or now is based solely upon each individuals needs and wants. As a Brokerage it is not our job to economic gurus that can predict the market. It is our job to provide the services of a Realtor and make sure we continue to provide that service in a professional matter.

I also would like to see more questions asked or answered about the cause and effects of the rental market we are about to see. We all talk about the Glooming Foreclosure #'s and people losing there homes.I would like to see a report on where these people will go and when they get there what effect will that have on those of you that decide not to buy and want to continue to rent. Will this drive rents up in your markets where it now comparable to buy instead of rent.

Any articles on that subject would be appreciated.

Here is another article

Home-price data has its flaws
Market anomalies painting skewed picture, index producers acknowledge

http://www.marketwatch.com/news/story/market-anomalies-skew-… - Wed May 7 2008, 09:27

Since everyone seems to jeep posting links and i am not sure as to what has been discussed the last 300 posts i will add some links to articles that i ran across today.

The media & Case-Shilling index may be a little off about the current housing slump using skewed data. One reporter finally speaks out about the truth of the current market… Please visit the following link or click on the photo above to read the full story & hear the video:

http://realtytimes.com/rtpages/20080505_realtyviewpoint.htm

The Housing Crisis Is Over

http://online.wsj.com/article/SB121003604494869449.html?mod=… - Tue May 6 2008, 21:45

I'm with you Roger this is a great thread, and it shows the ability for a forum such as Trulia to have people with different perspectives argue without getting nasty while at the same time bringing great perspectives. I haven't checked in for awhile as work has picked up, but i do still try my best to come and participate in threads like this.

Thanks Trulia for a great forum. - Sat Apr 19 2008, 19:09

I also think Realtyexec's last post understates the issue. Jared said he would have "been in a world of hurt" had he paid asking price for a California condo in 2005. Exec replied that this would only be true if Jared had a 3-5 year ARM, but not if he had a 30-year. How is this accurate? If Jared would have paid asking price, he would be in the same position that has led millions of people to foreclose--after the value of his home fell, he would wake up and realize that he owed more on his mortgage than his home was worth. When Jared's condo's depreciation has caused what was a $300k asset to fall to, say, $250k, what incentive does Jared have to pay the bank on the $275k loan he owes it? Not all current foreclosures are people who are pushed to it due to costs they can't afford; some simply walk away because the math makes sense.

This is exactly why i would suggest you rent, you are not ready to buy a home with that mentality. That mentality is the exact reason as i stated a couple of posts back that the foreclosure rates are effecting more than the subprime borrowers.

And believe it or not i do understand todays borrowers because i deal with them everyday and im believe it or not in that age bracket. Just because we are in a new age does not mean the fundamentals of homeownership are no longer valid.

I cant believe that last post Ryan not that there is anything wrong with it, but how it shows how far away some of us are about why we should buying.

I STRONGLY SUGGEST RENTING. - Sat Apr 19 2008, 00:45

Jared

What Liz posted in her reply is common knowledge to professional agents, so how is that a solution it is everyday practice. The hard part is having Sellers listen. I'm not going to clog this up with back and forth, so i can say i really dont agree with people throwing stones.

Good for you staying out of the market if it was the best thing to do. Great you can afford but dont buy. To me these things have nothing to do with comps. The problem with people making comments about what should be done when someone else sells there house, is one they have no clue what a realtor is telling the seller, two they have no idea what every seller is specifically thinking. More importantly they have no clue of the situation, and some like yourself with no experience except as a spectator. i like to think i would be a better coach or i would make the right call while watching sports. But thats what most of these posts are about, you have no real understanding of the pressure and the stakes involved.

Lets look at how many houses were bought in 2005. Do you seriously think that all of them are in foreclosure or losing there houses. Yes alot bought for the wrong reasons, yes alot bought that couldnt afford it, yes alot bought for speculation, but hey you know what believe it or not alot bought because they actually wanted to live in the house and pay it off in 30 yrs. Crazy as it may sound. And those people although with concerns due to there current value, are only 10% into the life of there loan. 3 years out of a 30 year loan.

This is just another example of how we currently view things based upon how we used to view things, the fast food mentality seeps its way into home ownership. The information age that informs us so fast we that give up because our house prices fell within the first 3 years. I cant believe we are even addressing such issues. There is a reason its a 30 year loan, ok as you well know like the 6th grader you talk about. How many years does it take to pay off a 30 year loan.

"The Realtor told me that now was a great time to buy because if I don't buy now, I'll never be able to afford to own and would have to rent forever. (No, really. She did. She still calls and is a super nice lady, but she promised I was outta luck unless I bought in 2005.) I told her I'd give her $180,000 (I was very proud of myself for keeping a straight face,) for the house she wanted just under $300,000 for and we left with a free bottle of water. But, if I were going to let you sell the house, supposing I'd bought it for $300,000 I'd still want you to tell me to take a (bigger) loss. I'd be in a world of hurt."

A world of Hurt after 3 years, if you got a 3-5 year adjustable yes you would, but you seem like the type of person who as you said makes alot of money and would have gotten a 30 yr fixed fully amortized. So would you really be in a world of hurt. When you qualify for a 30 year fixed you understand that you can afford that payment period for 30 years. The value of your home in know way effects that payment, so why would you be hurting, unless you suffered hardship. You would just not be bragging to your friends how you made 100K in the first 3 years, you might have to wait awhile to make that comment. Is that so bad, if you bought that as a home. Not to be able to say hey i got this much in equity right now, well you obviously know equity doesn't mean much until you sell your house. If your in a 30 year fixed im not sure you would be selling anytime soon.

Sometimes we need to sit back and understand that we really only can think for ourselves, and if you make a good decision great. If you make a bad decision than thats unfortunate, but it is your experience solely. So with your mentality you would be in a world of hurt, to someone else they might be in the 1st inning of a long game. And game as a analogy only to time, buying a house is not a game.

Cheers - Sat Apr 19 2008, 00:06

Newportfiji

Anyone thinking gains when buying a home is making a mistake, when the word investment is used it is over years and years even decades. So in some points we agree.

But everyone keeps talking about stricter lending lending is getting easier. Stated income was never a real gauge of lending, and to say that they are getting stricter because there is no stated income is just wrong. It is getting easier in my eyes with the new loan limits and rates. People that can prove there income get loans, with FHA even bad credit or bankruptcies are not the deciding factors. I dont want to generalize to much, but stated income is going away but with prices reasonable and rates solid most families are getting a loan. But most are just not ready to commit due to market negativity. Which is fine, but if they do buy i guarantee after a decade what market conditions we face now would have been corrected.

This is a generalization again of my area, and thats all i can speak on. - Fri Apr 18 2008, 12:27

"Earlier today there was some discussion on whether and how much Congress's decision to increase the loan limit on government-backed mortgages would effect home purchasers. I'm not sure if this answers the question, but the WSJ link below provides an update on action being taken.

It is my reading that the recent legislation ALLOWED Fannie Mae/Freddie Mac to increase limits on government-secured loans, but action had not yet been taken by those bodies pursuant to this approval--until today. Please let me know if I am misunderstanding this or if you have heard anything else.

For any mortgage brokers out there--any insight on how recent legislation will affect interest rates (especially legislation aimed at increasing conforming loan limits) would be much appreciated.

Again, thanks to everyone providing such strong analysis."

Ill answer this question first. Im speaking on a generalization for my county and general area, i am not a national specialist and have no real need to be. Most of your arguments are all based on a national market, but we can debate all we want it will not coincide in most cases with our own communities.

Santa Clara county FHA limits before the increase max loan limits $362,790. After loan limit increase available till end of year $729,750. This is for a 1 Unit. Thats just the beginning thats almost double the old limits. Most buyers have never even had any chance to utilize a FHA loan. With the max LTV on the new conforming Jumbo being 97%. Your purchase price could be $752,320. Old limits 97% purchase price could be $374,010. If that doesn't stand out, ok ill go farther.

Depending upon your debt and interest rate to qualify for the old limit your looking at a annual income of about 65-75K. Compare that to the The median income for a household in the county was $74,335, and the median income for a family was $81,717. That means alot of people would have qualified under the old limits, but inventory of homes in that range was a negative influence.

Now lets look at the New loan limits depending upon your debt and interest rate to qualify for the New limit your looking at a annual income of about 135-165K. That is for the Max at 97%.

That means there are new buyers with these loans in the range from $374,010-$752,320. With the ability to take advantage of a FHA loan with 97% LTV and in some cases a minimum Fico of 600. I don't know about the rest of the country but with most families having 2 primary workers those incomes in the silicon valley are not out of the ordinary. Also with down payments of more than 3% more people also qualify.

If you dont think this opens the door for a huge amount of buyers then maybe im doing these numbers wrong. Whether this will affect sales and inventory time will tell, but it seems that alot of people in the industry do not understand or know how to qualify these type of Loans. That might be the biggest problem, as things happened so fast alot of people were unprepared.

We are funding our first deals under new loan limits next week, and have numerous pre-quals with new buyers. So with that being said it is hard to really understand what everyone else is doing, but these new loan limits have opened many doors for new buyers in our office.

all these numbers are generalizations, and based upon my current market area. Here is a website to check loan limits in your area.

https://entp.hud.gov/idapp/html/hicostlook.cfm - Fri Apr 18 2008, 12:02

Jared

Its pretty easy to point out a problem, but lets hear a solution. if you were selling your home what would you want your Realtor to use to gauge your listing price. By all means please help us Realtors do the right thing. I love how most these answers address the problems with no realistic solutions.

Im open to all suggestions, and sellers would you like us to sell your house based upon speculation and not a real CMA system. - Fri Apr 18 2008, 11:20

I love when people generalize the whole housing market and are really naive to think that we can really talk about any housing price prediction based on a national avg, a county avg, or even a city avg for that matter. You dont have to be an economics major to understand real estate. I would love to read any thoughts that you have economically that would back your post up. Why not even make it valid and base it upon a zipcode or school district for that matter.

I know you like to hammer realtors with negative talk, but its really easy to pick a fight with knowone. Meaning you are really not accomplishing anything talking about the market as a whole. When a realtor shows a house he doesnt use the national avg school scores as his mark to criticize the school district. He doesnt quote the national inventory or national avg to price his home. It is naive to think that a professional realtor would not understand the sensative relationship they need to have about there individual community.

I think there are plenty of people to blame and some realtor's are on that list, yet to really get to the core of what caused this you would need more than an economics degree. I can relate it to any other profession that builds any thing in this world for pay. Do you blame the guy that machined a gun, for any violence that happens after the fact. There are plenty of problems because of individuals that get paid to do there job, when someone gets paid to build a house would you blame them for the foreclosure. Crazy right, No how could you. Well what about the seller that owned there house for 30 yrs and cashed out and sold to a first time home buyer. Are they at fault is the Listing agent? There are plenty of people to blame starting at the bottom working all the way to the top, yet we still blame the realtor's cause they got paid so much to do there job. Well not to burst anyones bubble but there are more people that made money from these transactions than realtor's. And most made more then them. Lets start with the sellers, the realtor's, the brokers, the banks, the secondary markets, the servicer, the numerous middlemen who sell the loans. The rating systems for mortgage backed securities, the investors, the global investors, the fed, the chief economist, The media and so on. So with this one transaction making so many people money, why is the Realtor the one to blame? Easy target for a easy argument that really doesn't address any problem.

Most realtor's know this and its really hard to prove as a conspiracy theory but alot of what happened and is still happening is due to the media's portrayal of the sub prime market. They hammered it in peoples heads that the sky was falling. By pumping fear they caused a chaos effect. People that didn't have sub prime loans just gave up and are still giving up on there loans. Not because there bad loans not because there adjustable, Because a couple of bad apples couldn't afford there homes and sold for a lower amount than they bought theres. That paranoia opened the floodgates, not one of the best things to do to first time home buyers. It was a domino effect, and Realtors are taking the blame. Rates have not changed significantly in the last 2-3 years. So whats the reason then, what caused it. The realtor's still i guess.

People would be amazed if they took the time to interview some of these people going into foreclosure. These people are not unemployed, there not in an adjustable mortgage, there not in hardship. There hardship is that there house is less than what they paid, and the media has pounded that into there head the last year. They do what alot of people do, panic and give up. I don't see where a Realtor is at fault in that situation.

I am also only speaking on personal experience and cannot vouch for the market as a whole, and i would not make that mistake. Yet i have my opinions and i am glad i have this forum to do so. - Thu Apr 17 2008, 23:55

Yes there are so many closing costs, it is best to ask for credits typical credits that a lender allows is 3% of purchase price. Some people want credits with closing costs, some prefer a cheaper purchase price as they don't want to include them into the life of the loan.

Good Luck - Wed May 14 2008, 21:17

I would consult with a Acorn specialist or FHA CALHFA specialists, that can run the numbers for you without having to pull your score. If the income levels pan out, then i would check the scores and see how close you are or if credit repair is possible.

There are so many cheaper homes now on the market you would be surprised what you see out there. FHA and Acorn or not FICO driven and if income is documented you might have shot at it. I can refer you if needed.

Good Luck - Wed May 14 2008, 21:14