Fed needle getting closer to popping housing bubble

[murray t turtle]

Quote from Covertibility:

Wow wasn't higher rates predicted when Feds Funds was at 1%?

DOOOOM! Crash!

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This Probably isnt the best comparison, but it may work anyway.

Somewhat like the homebuilders today;
its a mixed market. Semisector doesnt look like a bubble;
buts its notably weaker than homebuilders.

Most of homes have seen purchased had 20-30 yr FIXED , dont use ARM much except for investment or shorter term;
Federal Reserve Board ARM 11 year chart is still in a clear downtrend .

Just dont agree with that fundamentalist title-''bubble'';
thats fighting the fed ARM chart.

 

[jficquette]

Quote from Apex Capital:

Your $240,000 mortgage is not very realistic for CALIFORNIA.
I would say double that figure.

And more to the point, 2/3'rds of the people in the San Francisco Bay Area are holding "interest-only" mortgages . . . The "interest-only" mortgages are the current rage across the Nation.

Good Luck people.
When the music stops, where's your Chair?

I live in Carlsbad. The home market seems to be running into a wall. Just the last 3 weeks or so. There are 3 houses for sale on my street that dead ends after 3 tenths of a mile. Maybe 8 house on the street.

All the homes for sell on my street are from flippers, including the guy I rent from. He wants $1.3 mill. I sold my house last year.


I have also noticed 3 "reduced for quick sale" signs that were not there 3 weeks ago in the general area.

It's going to get ugly ugly ugly.


John

 

[Slim Harpo]

Quote from tanp21:


People these days have little to know savings. If times get though or as things get to expensive then people will have to sell. If the middle class can't sustain the bubble it will be a mass exodus.

I think most of us can agree that it is not a question of if but rather when.

If you are correct and there is a mass exodus, where do all those people who exodus turn to live? Where will they live if they get foreclosed on or just can't maintain the mortgage payments any longer and are forced to sell or worse yet, just walk away...

What will happen to those from a mass exodus? Where will then end up?

 

[peilthetraveler]

Quote from Slim Harpo:

If you are correct and there is a mass exodus, where do all those people who exodus turn to live? Where will they live if they get foreclosed on or just can't maintain the mortgage payments any longer and are forced to sell or worse yet, just walk away...

What will happen to those from a mass exodus? Where will then end up?

Its not all 1 home per family people out there...there are alot of middle class investors that went and bought carlton sheets "no money down" program and those guys probably own 2 or 3 houses that are renting out...the people renting the house will probably end up buying the house from a discount at the bank or they will just have to move. But the people that do just own their home with little or no money down will have to either move to a cheaper area or maybe move in with relatives or something is my guess

 

[jficquette]

Quote from peilthetraveler:

Its not all 1 home per family people out there...there are alot of middle class investors that went and bought carlton sheets "no money down" program and those guys probably own 2 or 3 houses that are renting out...the people renting the house will probably end up buying the house from a discount at the bank or they will just have to move. But the people that do just own their home with little or no money down will have to either move to a cheaper area or maybe move in with relatives or something is my guess

This guy I rent from owns 11 houses with his ex wife, brother, etc. This guy is a police officer. They are a lot of people out there like this and I feel like they are starting to scamble a little.

JOhn

 

[Midas]

Sorry guys,

There have always been landlords. Just because Carlton Sheets is making a bundle selling his rental program on late night TV does not mean this sort of real estate investing is a new thing.


On the other hand it does seem like more people are getting into the rental game. Just like any form of investing the weak hands will be shaken out.


Sound real estate investors with strong NOI and positive cash flow will fair pretty well in coming years. As home prices become over inflated, interest rates rise, and the real estate cycle begins to turn more people will be renting.

 

[tanp21]

Quote from Slim Harpo:

If you are correct and there is a mass exodus, where do all those people who exodus turn to live? Where will they live if they get foreclosed on or just can't maintain the mortgage payments any longer and are forced to sell or worse yet, just walk away...

What will happen to those from a mass exodus? Where will then end up?

What will happen? Simple supply and demand. The more houses on the market when owners are desperate to sell the lower housing prices will drop.
They will rent or move to a cheaper area.

 

[Haylavshik]

Quote from Slim Harpo:

If you are correct and there is a mass exodus, where do all those people who exodus turn to live? Where will they live if they get foreclosed on or just can't maintain the mortgage payments any longer and are forced to sell or worse yet, just walk away...

What will happen to those from a mass exodus? Where will then end up?

IN A VAN BY THE RIVER...

 

[NasdaqTrader]

If there a big pop in the real estate bubble,isn't it very possible for the banks to lose tons of money if foreclosures occur,especially if the home prices drop to a price that is lower than the amount of debt owed to them on each home?

 

[tanp21]

Quote from NasdaqTrader:

If there a big pop in the real estate bubble,isn't it very possible for the banks to lose tons of money if foreclosures occur,especially if the home prices drop to a price that is more than the amount of debt owed to them on each home?

Yes but they hedge their risk with MBS.