Short Housing

Originally posted by ddog
If someone locks in a 30 year fixed rate loan at say 6.25% how can they no longer afford it if rates go up?
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well their broker might have talked them into a bubble, whoops, i mean a balloon adjustable by saying few people live more than 5 yrs in the same residence. that way they get even better rates!!!

the humor on this thread really cracks me up!!!!!
 
Originally posted by Bryan Roberts



well their broker might have talked them into a bubble, whoops, i mean a balloon adjustable by saying few people live more than 5 yrs in the same residence. that way they get even better rates!!!

the humor on this thread really cracks me up!!!!!
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How about the people who haven't been talked into a balloon adjustable and haven't cashed out??? looking pretty good right about now @ 6.25
 
"How about the people who haven't been talked into a balloon adjustable and haven't cashed out??? looking pretty good right about now @ 6.25"

Exactly my point
 
daniel, are you from Australia? just curious because I was there last year and the housing market was absolutely on fire! They sell houses using an auction system (where you go in to see the house and then at a set time all interested bid on it).

I've heard of similar stories from the UK. Houses are just on fire. The same principal working there, mild economy, fear of the stock market and accomodative monetary policy. I've also heard of similar things happening in Europe (Spain and Italy in particular.)

Everyone seems to 'explain' the price spiral but sometimes it is just a plain and simple bubble. I mean fercryingoutloud, Spain's population is shrinking and their economy stinks! There is no sustainable source of demand (kids moving out, marrying, etc.)

I feel like those old foggies who called the internet bubble in 98 and then sat back with their chins on the floor as it kept goin and goin.....
 
I don't know if anyone read my earlier post but I live in so cal and had a house in escrow that I am presently trying to get my deposit back on. Since the house is in a fire hazard zone I was unable to get anyone to insure it and even if I can the cost would be prohibitive. Well now I am being bullied by both agents to stay in "we can get you a policy that will get you through escrow". Sure- then when they make all their commissions and the isurance company cancels on me (they have 60 days to change their mind) I am left with a house that is uninsurable.

Makes me wonder if the market is still so hot why dont they give my deposit back to me and find a bigger fool?
 
Originally posted by Babak
daniel, are you from Australia? just curious because I was there last year and the housing market was absolutely on fire! They sell houses using an auction system (where you go in to see the house and then at a set time all interested bid on it).
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I'm actually from Macedonia (FYR Macedonia, don't wanna offend any Greek EliteTraders :)), but I lived for many years in Australia.

The "auction" system you mention is an absolute joke! Sounds great in theory: all buyers there at the same time, all madly bidding the value of your property higher. It's really just a tool real estate agents use to sell your property quicker.

Here's how it works:
Agent comes to your house and "appraises" its value way over anything anyone would actually pay for it. All excited, you start frothing at all the dollars you're gonna make. Once the agent's got you hooked, he sucks you into the auction method. When the bids don't come anywhere near what he "appraised" you, he starts working on you to accept a lower price, saying "this is what the market is telling us.." Since all the buyers are there, it's hard for the seller to hold on and hope for a better price, so he just sells. The agents even have a term for this, "Conditioning the Seller".
 
Originally posted by ddog
"How about the people who haven't been talked into a balloon adjustable and haven't cashed out??? looking pretty good right about now @ 6.25"

Exactly my point
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yeah, but instead of inflation increasing the value of their leveraged asset the house will instead lose significant value when there are NO buyers because of the higher rates!!!
 
Originally posted by Bryan Roberts



yeah, but instead of inflation increasing the value of their leveraged asset the house will instead lose significant value when there are NO buyers because of the higher rates!!!
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that sounds great , but if you aren't looking to sell, then maybe the lower rate refi was a good bargain don't ya think??
 
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