Home sellers suffering huge losses
- Thread starter S2007S
- Start date
I just bought a house and am closing on it in two weeks. I feel good about the purchase.....seems to me like all these doom and gloom articles all base their stats on California and Florida. You know there are 48 other states in the country and most states are not seeing the huge 40% declines so its rather stupid that the basis for all this housing doom and gloom is based on a couple of states......
The other thing I don't get is Cali and Florida were up like 100% or something crazy in the last 10 years so if it pullsback 50% so what? If you're somebody who didn't stupidly get into a moronic loan in the last couple years who cares?
Relax people not every neighborhood in the country is over run with subslime morons that are defaulting every month!...and the ones that are defaulting will get kicked out, new people will move in and an eventual bottom will get put in. If you're going to live in your house for the next 15 years then who gives a crap about the value of your house in the next 14 years?
The other thing I don't get is Cali and Florida were up like 100% or something crazy in the last 10 years so if it pullsback 50% so what? If you're somebody who didn't stupidly get into a moronic loan in the last couple years who cares?
Relax people not every neighborhood in the country is over run with subslime morons that are defaulting every month!...and the ones that are defaulting will get kicked out, new people will move in and an eventual bottom will get put in. If you're going to live in your house for the next 15 years then who gives a crap about the value of your house in the next 14 years?
That is true but it seems like the foreclosures are going to come pretty fast in the next year or two and once the bag holders are taken to the woodshed and the banks take their lumps we should see a nice bottom. So yeah prices will probably fall more and I might be early (I bought the place at an 8% discount to its original price when it was built in Jan 2003 and the appraisal I got valued the house ABOVE the price paid in 2003) but I don't see reason for prices to fall permanently lower below the pre-bubble prices for the next decade which is what the news media seems to be portraying.
Plus there seems to be an interesting "trade" setting up. As homeowners are panic selling the prices are falling.....but the rental rates are zooming higher at least in my area. Seems as these people are short selling or just walking away with losses they still need to live somewhere so it might be interesting to try and pick up some of these homes on the cheap and rent them out at higher rental rates. So yeah if you buy within the next 6 months you'll get the house at a cheaper price and if you rent it out then it really doesn't matter what the value of the home is until you decide to sell it. And if rental demand is increasing then why bother selling it if the renter is paying your mortgage?
I put our current condo on the rental market for 1 week and already have a signed lease from a tenant and the rent covers all my costs (mortgage, PT, HOA fees).
I don't know something to think about if people have the funds and credit lines to attempt this........
You make some good points. I'll give you an example.
Prices in Phoenix are down 21% from the highs according to an ASU survey. Some areas of Phoenix are seeing declines of over 30%. However prices in Scottsdale have only come in a whopping 14%. The same can be seen in SoCal. While crap areas that were bid up by sub-prime and panicky buyers are imploding, home prices on L.A.'s Westside are barely downticking and I've seen condos for sale in L.A. priced ABOVE their last trade in 2005/2006.
Also as far as rents. I see them very firm as well. There was a lot of talk in miami that these unsold new condos would cause a glut of depressed rentals hitting the market. Guess what? As rentals they're being scooped up at prices well above what I'd call bargain levels.
Prices in Phoenix are down 21% from the highs according to an ASU survey. Some areas of Phoenix are seeing declines of over 30%. However prices in Scottsdale have only come in a whopping 14%. The same can be seen in SoCal. While crap areas that were bid up by sub-prime and panicky buyers are imploding, home prices on L.A.'s Westside are barely downticking and I've seen condos for sale in L.A. priced ABOVE their last trade in 2005/2006.
Also as far as rents. I see them very firm as well. There was a lot of talk in miami that these unsold new condos would cause a glut of depressed rentals hitting the market. Guess what? As rentals they're being scooped up at prices well above what I'd call bargain levels.
That's typical. Most areas in the US might see existing home prices declines of about 15% total. Maybe 20% in some of the more aggressively bought areas. But these areas don't make national news, because there is no excitement in saying that a homeowner only made 60% when his house appreciated 80% in three years and dropped 20% in two years.
Anyway, the typical part is that housing slumps result in rental booms. That is a given. If people look around they should notice the massive amount of building of large apartment complexes.
Exactly! This is what I'm seeing also. I would imagine that as house prices fall, rental rates should be zooming higher until we reach the point where housing prices have fallen enogh to where rental rates are no longer more appealing then buying a house in which case we should hit a bottom and start heading higher. As we start heading higher and people start buying homes again the rental rates might flatten out or start falling while housing prices should start to recover so then that would be the time to start selling the rental props and lock in gains and wait for the next "its the end of the world housing crisis" to start all over again?
I dunno all I know is that when I started house hunting I was all excited reading about the massive 40 or 50% discount I was gonna get on a house....until reality hit me in the face that I don't live in Cali, FL, or Vegas and that the neighborhood I'm in doesn't really have much available in the way of foreclosures.......and that most of the people are sitting in their homes with 30 year fixed mortgages at 6% or less and not too many are interested in selling their homes so that they can go buy another house with 30 year fixed mortgages now above 6.5%....
I guess like they say, real estate is a very local and trying to nationalize it just doesn't seem to tell the whole story.
Besides being all over the media they seem to have a large group of followers any place that one can write a message i note that one source allways qouted is "Realty Trac" which makes their living selling information about foreclosures and other related things.
Media outlets give them coverage as if they are the final word from above but no one tells who they are or how they operate their business seems to me the more bad housing news put out must give them a boost. Any one know details about them?
Mean while i am starting to read more stories about groups buying up foreclosures to fix and meet market rental demand with the 5 year or more sales targets,if one buys them to rent at 50,000. in areas where avb income is 36000 or better rental should be close to 900/1000 possible that even familys on section 8 housing can qualfiy which means the govement will help with the rent, just read that one area with lots of low priced HUD foreclosures available.
Maybe Habitat For Humanity should give that a try.
Media outlets give them coverage as if they are the final word from above but no one tells who they are or how they operate their business seems to me the more bad housing news put out must give them a boost. Any one know details about them?
Mean while i am starting to read more stories about groups buying up foreclosures to fix and meet market rental demand with the 5 year or more sales targets,if one buys them to rent at 50,000. in areas where avb income is 36000 or better rental should be close to 900/1000 possible that even familys on section 8 housing can qualfiy which means the govement will help with the rent, just read that one area with lots of low priced HUD foreclosures available.
Maybe Habitat For Humanity should give that a try.