banks offer incentives to low income folks because if they foreclose, the unit itself is still marketable, unlike stocks which can lose significant value or become essentially worthless. these units can be be altered for rentals which continue to generate cash income.. it is a low risk situation for banks.
Two Factors In Buying a House
- Thread starter OldTrader
- Start date
When is the last time you rented a residence from a bank? or do you know anybody that has?
When I worked at a "B of A" subsidiary 25 years ago, when we foreclosed, we dumped asap, to get it off our books...That BOR (Branch Operations Report), was key to my bonus, so I was on our Foreclosure Department to get rid of any foreclosures, that put a drag on my results...
Michael B.
When I worked at a "B of A" subsidiary 25 years ago, when we foreclosed, we dumped asap, to get it off our books...That BOR (Branch Operations Report), was key to my bonus, so I was on our Foreclosure Department to get rid of any foreclosures, that put a drag on my results...
Michael B.
ohh...so thats who was buying my branchs properties....
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redevelopment co's. when they see a run down industrial or office park, they're thinking how can we demolish this one day and make it into miles and miles of cloned mini mansions to sell to the public. they'll hold on to that land for decades if need be.
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unlike the stock market, land is scarce. the stock market can continue to create supply and artificial demand. cannot issue out new land supply in high demand areas like stock ipo's unless you're the japanese who build airports in the middle of the ocean.
anyway, re: the original topic, i look around talk to my peers (gen x), most don't own but want to and can afford but wait. they fearful of paying too much and at wrong time. demographics are still demand rich. that telling me there can be correction, but not the kind of economic meltdown so many are preaching.
(edit)
unlike the stock market, land is scarce. the stock market can continue to create supply and artificial demand. cannot issue out new land supply in high demand areas like stock ipo's unless you're the japanese who build airports in the middle of the ocean.
anyway, re: the original topic, i look around talk to my peers (gen x), most don't own but want to and can afford but wait. they fearful of paying too much and at wrong time. demographics are still demand rich. that telling me there can be correction, but not the kind of economic meltdown so many are preaching.
Quote from ElectricSavant:
ohh...so thats who was buying my branchs properties....
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in all due respect, I was talking residential single family forclosures...but I know what you mean...here in Denver, CO. must be where a lot of their holdings rest.
Most mortgage people got are not locked in for more than 10 years, because long term locked-in rates are higher. Thus most new home buyers would take 2 years, 5 years, etc. only - that will subject their mortgage to rate change at the time of renewing the mortgage.
Housing value decline has a similar effect of stock value decline, that is, people will feel "poorer" and spend less - that affects economy as a whole. The 1989 crash of housing prices in Toronto Canada (and other major cities) results in slow down in all areas of the Canadian economy. That in turn depress property values in a spiral down cycle - inducing job cuts, less stable income for most families, less spending, lower corporate profits ...
Just wanted to point out that these 2 things can change affordability over time.
Housing value decline has a similar effect of stock value decline, that is, people will feel "poorer" and spend less - that affects economy as a whole. The 1989 crash of housing prices in Toronto Canada (and other major cities) results in slow down in all areas of the Canadian economy. That in turn depress property values in a spiral down cycle - inducing job cuts, less stable income for most families, less spending, lower corporate profits ...
Just wanted to point out that these 2 things can change affordability over time.
single family homes or industrial, it's same. i've seen old neighborhoods bought out for land in past decade, they just sit on it. then when the markets come, they're repaired, upgraded or torn down for new construction. my real estate buddy showed me a sale few years ago of a 2 bedroom 1200 sq foot sh*thole sitting on 1/2 an acre in nyc suburb for $400,000 by a real estate investment group. he told me that at first he thought the seller got a great deal. but he didn't. they tore it down built a mini mansion and sold it for 1.5 million.
I think I will leave Real Estate to you guys. I just was a beneficiary of a bubble that lasted a long time in Southern Cal...I thought it was because of my finanacial prowess......lol a child could make money in RE...
The difference is I went full circle and captured the benefit, instead of this endless pyramiding. I find myself free to do what I want...you know why? I have a FY account...(It's an account I am building faster than inflation to tell everybody Fu** Y** with) My rent is due in July...I paid Junes last week...I owe absolutly no money (except my tax quarterlies which you cannot pay early or it screws them up), but real estate is a good way to borrow cheap money, I agree...(I do keep a $500.00 credit card for obvious reasons, but it has a zero balance, they increased it to 3k without my permission, and I had them dial it back down....don't ever do that again!)
Michael B.
...lol a child could make money in RE...The difference is I went full circle and captured the benefit, instead of this endless pyramiding. I find myself free to do what I want...you know why? I have a FY account...(It's an account I am building faster than inflation to tell everybody Fu** Y** with) My rent is due in July...I paid Junes last week...I owe absolutly no money (except my tax quarterlies which you cannot pay early or it screws them up), but real estate is a good way to borrow cheap money, I agree...(I do keep a $500.00 credit card for obvious reasons, but it has a zero balance, they increased it to 3k without my permission, and I had them dial it back down....don't ever do that again!)
Michael B.