Thieves, I mean bankers get it.
Those of you who BOUGHT your own place - Regret it?
- Thread starter pftek
- Start date
Thieves, I mean bankers get it.
Here are some quick stats on the Real Estate market , it still hasn't bottomed ...could be a good time to buy here this next yr:
http://realestateinsidernews.com/na...distressed-property-statistics-for-2011-2013/
Property Statistics For 2011-2013
February 1, 2011 ·
Following up on today’s earlier post about Real Estate Facts About Distressed Property
Here are a few more facts as pertains to the REO/ Foreclosure/ Shadow listing conversation:
* According to RealtyTrac Senior Vice President Rick Sharga, major banks currently hold roughly 1 million REOs.
* Only 30% have actually made it onto the market. Agents, that means 70% of the homes the banks have ALREADY foreclosed on are sitting..vacant. These homes are all expected to hit the market in the next few months. Don’t be confused, that accounts for only a tiny percent of the looming Shadow Inventory.
* Foreclosure filings reached a new high in 2010.
* Realtytrac expects 2011 foreclosures to surpass 2010 by a massive margin… 4 million filings are expected this year.
* That number does NOT include the more than 5 million delinquent loans that have yet to enter the initial stages of the foreclosure process.
* As we reported last week, there is expected to be upwards to 20,000,000 underwater homeowners if values fall another 5%. And, across the US there is little question that prices are indeed falling
Weed-Luver
Member
many who got caught in the housing bust, bought houses over-priced and out of their price range....keep it real, don't try to keep up with the jones..a little research helps greatly..
Darth Fader
Member
It's really not that people were trying to keep up with the joneses as much as the bubble made EVERYTHING expensive around here. I mean $500,000 wouldn't get you anything but a shithole in a bad area. But to your point, people did use there houses as atms to stupidly finance unaffordable lifestyles. We were looking to buy in spring of 2006 and found a nice small house (1300 sq ft) in a good neighborhood listed at $740,000. The realtor told us we could offer 700k and payments would be about 2k per month. So I went home thinking "how is that possible?" and began do do a lot of research. Thank God. I discovered some great information on blogs about the housing bubble (remember this is 2006). I devoured this stuff and became an official bubble-watcher.
The housing market is very simple really. Unlike the stock market, it moves slowly like an aircraft carrier turning at sea. You not only have price information but sales volume that you can track monthly and there are actually very few major inputs to supply & demand. Namely Jobs, interest rates, and economy. Smaller input would include population flow, new development, etc. But just think about those big 3: jobs, interest rates, and economy.
So now if unemployment goes back down to 6%, that means more people can buy homes - an input to demand (positive). or if the economy improves people will have more money (same - a positive input to demand). If interest rates go up, money becomes more expensive to borrow and people can not afford as much home (a negative input to demand), or alternately stated, less people can buy a home for $XXX.
Right now, because of overbuilding, massive foreclosures, and a stagnant market, supply is near or at an all-time high (a input to supply that should negatively affect value). But banks are hiding this inventory because they want to keep prices as high as they can. Speaking of which, everyone aside from new buyers want to keep prices as high as they can - especially banks and government who get a big chunk of their income from property taxes. So government pulls whatever levers it can - keeping interest rates low as not to sink the market, offering first time buyer programs (a positive input to demand, tax-interest deductions, etc. These may pump up demand (and hold up prices) in the short-term, but they really just shift future demand to the present and ultimately the holding costs for banks act like gravity in that they will eventually force the banks to liquidate - a positive input to supply which lowers prices.
So digest all of that and look at your local area, how big the bubble inflated, and determine if housing values have returned to the mean in your area. There have been something like 49 asset bubbles since WWI and every single one has returned to the mean with the exception of 2: the housing market and stock market. I'll bet the housing market is close but not quite there. Here's the thing, in my opinion government has done EVERYTHING in it's power to keep housing values up including a bonanza giveaway of taxpayer money to the banks to allow them to stay solvent and hold the shadow inventory. If we truly had a free market, housing would dive.
This was, BY FAR, the biggest housing bubble in the history of the U.S. Rest assured it will be followed by the biggest housing bust/depression in U.S. history. Again, locality is everything.
If you live where there was a lot of open land, rampant over-development, and massive speculation, you probably can get a great deal. Just make sure the valuation is good. By the way, we didn't buy but someone else did. Zillow shows they paid $735k in 2006 and the next sale on that property was $540k in 2011. Lost $200k in 5 yrs plus any equity & every payment made. My friend made a similar move on a condo. I warned him but he said he "didn't care if it lost $50 grand the first year". I was laughed at by friends and co-workers alike as a chicken little for years as the talk of a "soft-landing" progressed. And the funny thing is, very, very few of them will give me any credit or even admit that they were wrong. The psychology of bubble mania is even more fascinating the the bubbles themselves.
Anyway, sorry for the long-wind. I hope someone finds it interesting. Best of luck!
Jeeyah
Active member
