Are you a proud homeowner?

Owning, not owning, whats the real difference? You cant take a home you own to the grave. What is important is if you are enjoying the place you are living in or not. Whats left is all about money. So if you are in a home that is going down in price, instead of renting the equivalent and putting your money somewhere that is going up, then you are just being dumb.

This is the equivalent to saying "I dont mind losing boat loads of money as long as I own my home". Dumb dumb dumb.

"Its not an investment" is gobble gook realtors use to get lemmings to buy homes.
 
Quote from jackherman59:

In neighborhoods all over the nation, "for sale" signs have been sitting around for years. Homes have gone unsold and prices are acelerating to the downside in an obvious "bear market".

Can you sit there and still say that you are a "proud homeowner" with your house rapidly depreciating like a tech stock from 2000? Unlike the tech stocks of 2000, though, you cant just jump on Ameritrade to "cash out". It takes months or years to sell a house now and all that time you have to pay taxes, fees and watch the neighborhood kids vandalize your mailbox.

The "for sale" signs seem to be part of the landscape of America and there is still that army of "proud homeowners"....
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Hmmm. Really?

In 2007 there were 4 homes for sale in my neighborhood of about 100 houses. This is prime area in Central, Fl (non beach). Each home sold quickly from 2 days to 2 months for at or about the asking price. 2 of those homes were purchased in 2004. Both sold for substaintally more in 2007. Btw, these are 650-900K homes.

Are other areas worse off? Sure they are. Thats real estate for you though. Location, location, location.

In any event, just like the tech bubble in 2001, the sky is not falling and life will go on. Some will suffer, some won't. For example I know a guy who has a mortgage with World Bank. They've agreed to lower his payment from 4500/mo to 2000/mo for 5 years. This was several months ago, btw. Long before Bushes bailout plan. Is he better off? I dunno, well see how it plays out. But I suslect your going to see alot of this which will mean far fewer homes in foreclosure than whats anticipated. In fact, don't be surprised if the next thing your upset about and claiming to be proof of the end of the world is that Banks may have over stated their writedowns leading to greater than expected profits going forward. Who knows? certainly not you or I.

Remember, nothing, and I mean nothing, is ever as good or bad as it seems. When it comes to the markets those are words to live by.

Merry Christmas:)
 
Quote from Deadwood:

Hmmm. Really?

In 2007 there were 4 homes for sale in my neighborhood of about 100 houses. This is prime area in Central, Fl (non beach). Each home sold quickly from 2 days to 2 months for at or about the asking price. 2 of those homes were purchased in 2004. Both sold for substaintally more in 2007. Btw, these are 650-900K homes.

Are other areas worse off? Sure they are. Thats real estate for you though. Location, location, location.

In any event, just like the tech bubble in 2001, the sky is not falling and life will go on. Some will suffer, some won't. For example I know a guy who has a mortgage with World Bank. They've agreed to lower his payment from 4500/mo to 2000/mo for 5 years. This was several months ago, btw. Long before Bushes bailout plan. Is he better off? I dunno, well see how it plays out. But I suslect your going to see alot of this which will mean far fewer homes in foreclosure than whats anticipated. In fact, don't be surprised if the next thing your upset about and claiming to be proof of the end of the world is that Banks may have over stated their writedowns leading to greater than expected profits going forward. Who knows? certainly not you or I.

Remember, nothing, and I mean nothing, is ever as good or bad as it seems. When it comes to the markets those are words to live by.

Merry Christmas:)
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Somebody is taking the hit when a payment is lowered to less than half of the previous amount that was contracted for. Sounds like World Bank would be a poor investment. Regarding central Florida home prices, you have to be kidding. I'm not sure what cul-de-sac you live in, but ain't no 700K houses I've seen holding their value! I DO see houses that were 550-600 selling after a few months for 350-400, but that's after been on the market for awhile. These are just the facts, and to think conditions are otherwise is hiding your head in the sand.

Merry Christmas to all:)
 
Quote from Deadwood:



In any event, just like the tech bubble in 2001, the sky is not falling and life will go on. Some will suffer, some won't. For example I know a guy who has a mortgage with World Bank. They've agreed to lower his payment from 4500/mo to 2000/mo for 5 years. This was several months ago, btw. Long before Bushes bailout plan. Is he better off?
Remember, nothing, and I mean nothing, is ever as good or bad as it seems. When it comes to the markets those are words to live by.

Merry Christmas:)
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No bank would cut the monthly payment 60 percent on a large loan like that. It would be cheaper for them to foreclose on that idiot. Your friend ain't telling you the truth.

Besides, if he is living in a 700k home then he should be making over 150k a year and be able to afford a 4500 payment. Why let someone live in a 700k home for 2000 a month??? You have got to be kidding.
 
Quote from jackherman59:

Oh the proud homeowners respond now eh? I see you guys on the Titanic while the band plays on watching your house go to zero.
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Should we sell and move out then Mr. Jackherman that has it all figured out? Some people buy a house to live in, not to resell.... Why would it matter if the house is worth less.. .You still gotta have a place to live in don't you?
 
Quote from doginponyshow:

No bank would cut the monthly payment 60 percent on a large loan like that. It would be cheaper for them to foreclose on that idiot. Your friend ain't telling you the truth.

Besides, if he is living in a 700k home then he should be making over 150k a year and be able to afford a 4500 payment. Why let someone live in a 700k home for 2000 a month??? You have got to be kidding.
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Actually i'm pretty sure it is true, but it's more complicated than what I wrote.

Heres a brief summary:

1. Buys the house in 2003 for 500K. Puts 50K down.

2. House appraises for 825K end of 2005.

3. This guys a mortgage broker and see's the end coming.

4. Goes to World and re-fi's and they loan out 775K.

5. Now he's got his 50K back plus 275K or 325K total in his pocket. (775-450)

6. Mortgage biz goes bust, he comes to work for me at 50-75K/yr.

7. House is now worth 650K and falling like a stone.

8. He goes back to the bank and says he's out. They make him the new offer.

As a side note. A banker friend tells me it's always been the case that if there is equity in the house then foreclose. But, if the house is underwater try to work with the borrower.

As for the other poster who claims all 700K houses in Fl are now 350K- Come on! Are there some areas like that? Absolutely. No arguement there. But to say that's everywhere is nonsense. I can go online and see exactly what the houses in my neighborhood sold for, so I'm not guessing on this.

Keep in mind. I live in an established neighborhood, not some new develpment of cookie-cutter houses. I also live in one of the few areas in my county that is non-flood zone and has great schools, no crime to speak of and doesn't have 900K homes on 1 street and 125K homes around the corner. In other words, it's where people want to live if they can.

Now, don't get me wrong. Is my house worth what it was a year ago? No way. I would estimate based on selling prices it's down 5-6%. So what? That still means it's worth alot more than what I paid for it. ( which was the point of the OP, that all homeowners are screwed).

Anyway, believe what you will. I understand this site is beyond bearish and downright ammageddon like in it's thoughts about the future. I for one think it's a rocky road ahead, but that like all things this to shall pass and become a distant memory. That doesn't mean I won't short MBI every time it pops. It just means I don't think things will end up as bad as some of you. Thats all.

Peace
 
Quote from jackherman59:

Oh the proud homeowners respond now eh? I see you guys on the Titanic while the band plays on watching your house go to zero.
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This is a rather ridiculous statement. Property has value regardless. Much like money used to have value when it was backed by the gold standard. Unlike money these days though, property is still tangible.

If paper money became useless as in a depression, the first people to lose there homes would be renters. Why would somebody want you in the property they own causing unnecessary damages, which lead to unnecessary repairs, when the money you give them has no value?
 
I live in Philadelphia area and I am looking to buy a house in the near future. Prices did not go down by much so far...

Agras
 
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