Ok, I'm obsessed...again, it isn't political, it is about the housing

market. I am curious what you guys think about the future here in the good ole USA when it comes to housing, homeownership, and the American dream. With the sub-prime lending racket/fiasco, what do you foresee in the near to relatively near future? Tons of foreclosures for people who cannot afford those interest only loans they got? What else? What do you see that doing to the value of homes and the cost of homes and financing homes, etc?

The market here (NW NM) has slowed down and homes over $350K have stalled and aren't moving. Homes are still selling here but not for the listing price or above and homes are sitting on the market for months. What have you noticed in your neck of the woods?

Would you buy a home now? Are you buying homes now? If you own a home, what do anticipate in the future regarding its value...and resale value?

Be BRUTAL. You'll find the "floor" price with a little digging around.

The challenge is getting a loan, 'they' say.

I don't worry about home values--we live in our family home--it ain't an investment, it's a home. The price would have to fall to the point where dollars were less expensive than toilet paper to wipe your ass with before there'd be any issue with regard to the purchase price of this old joint. There are cars that cost way more than what was paid for this house, many eons ago...

Housing is a good 2 to 5 years from the bottom. We could easily see home prices fall 30% to 60% depending on the area. If you buy now you will lose money on the home. Keep renting and watch the local market. When mortgages cost less than rents for the same property, it will be time to buy.

Didn't you read what I said about finding the "floor?"

Naaah, you didn't.

A house not far from me is selling for only 12K over assessed value. It's in prime condition, too. This is a neighborhood that routinely sold for fifty percent OVER assessed. I'll bet the floor on that property is BELOW assessed value.

If you wait too long, you'll be in a competitive market again. Find the floor, find the house you want, negotiate for the very best price, and go for it. One does not have to compromise--state the 'willing to pay' price and leave it at that.

Now the buyer rules--in your "two to five years" the buyer will be competing with OTHER buyers who have the same idea.

got but I know what you mean. That's wonderful that you have a family home.

It's big, but filled. We like it, and won't move for anything, even when realtors were pestering us to sell it to yuppie types while that old boom was going on. We probably don't fit in the 'hood anymore--the place has gone from middle class/reasonably well off to 'Look at all the stinking rich bastards!' There's only one family in a ten or more block area that has been here longer than we have--everyone else is 'newer' money, over the last three or more decades!

that is 40 to 200% more than what should be loaned to them.

goes up must come down.

The market was fueled by bad loans(by an unregulated Mortgage industry)while the * Administration looked the other way.- People who could have bought a modest simple house wanted more house than they could afford.

The Construction industry never thought that the building would end...and they didn't pay attention to the warning sign....more new homes forclosed on....houses sitting on the market for months now..

Flippers....buying up houses doing a few cosmetic fixes and then reselling the house for $$$$$. - Parasites....they helped fuel the mirage that these houses were getting snapped up by real homebuyers and thus causing the prices to skyrocket.

Plain and simple Fraud - the loans were so easy to get that Realetors, Morgtage and pretend buyers committed massive fraud....

I read an article today that said whole neighborhoods are empty due to foreclosures etc...

I am thinking this is going to be MUCH worse than the housing market crash in the 1980's.

Anyhoo...that's my two cents..

people choose not to go there. The prices are (to me) high here and you don't get much for the high prices either so I look at some that I would love to live in but I am not willing to over extend. I actually wasn't tuned in for the 1980's situation. But we drive through some really nice neighborhoods now and every 4th house it for sale...expensive neighborhoods. Two people I know who used to work at title companies here said they actually have had times when they were doing more foreclosures than actual transactions.

lived in Texas we had a ridiculously large home that had about 5 rooms we never even used. After 20 years of home ownership in 3 different states i am firmly in the camp of buy below your means when possible.

in the hot months and cleaning it, just vacuuming the place took 2-hours. I do however miss my big backyard, the houses here are way to close together, next house I'm getting a moat filled with alligators and giant wall surrounding the place with a sigh that reads "If you didn't call, you shouldn't be here".

after rate increase the a/c running most of the year because it is so hot in Texas (don't miss that heat at all).

I like your idea. I think I might use a sign like that too. :evilgrin:

but many people made decent decisions.

I think that 1 in 4 empty houses you see will increase to 2-4 by first quarter 08.

Too many people were buying homes, not to be homes but to be their investments.

Too many bought with the intention of making a few cosmetic adjustments and expectation of selling in 1-5 years with a 25%, 50% mark-up.

People who bought in early were able to do that, but it reached a point for many where, if they were to sell, whatever they would / could buy into would likely eat up all of their profits and demand they buy another house or condo with an over-inflated price.

There are only so many people in the US who are comfortable taking on a 200k, 300k, 500k, 750k mortgage, you know?

Some of them got bad deal loans but many didn't. Many simply got off the treadmill when they realized what was coming.

maybe even 2

still haven't reset. Also people won't have the ability to buy a lot of the stuff they were buying when they were using their homes as an atm so that has a trickle down effect and the last thing are increasing prices in rents here simply because the demand is higher.

My plan, i got a boring 15 year fixed 7 1/2 years ago and luckily we've never had to borrow off the equity so the plan is to sell in about 6 years when my daughter graduates from high school and hopefully gets in to the college of her choice (oh please be the UC system so we get an in state tuition break) and my husband and rent somewhere on the coast until we figure out where exactly we'd like to live and then maybe we'll buy a small house or condo.

Thats the plan but you never what will happen along the way.

Of course, it almost tripled in value in the last few years. So, the loss is about 5% of it's current value. We anticipate more of a drop in value, but not much. We're in a "desirable" area on acreage in Washington State.

But, it's where we live and plan to live for the rest of our lives. So, the fluctuations in value are relatively meaningless to us.

What I see is a looming recession due to the job losses in the housing and related industries. All those folks building houses, making the supplies for building houses, transporting the supplies, etc, etc, are probably looking at hard times ahead...and those folks are just as liable to have bought over priced houses with dicey loans.

Not to mention fuel prices going up..and the dollar dropping.

You talk about homes over $350K and I think 'my god, who can afford such an expensive house?' Then again, they are asking $115,000 for the house across the street and I think that is nuts.

If prices come down, then more people should be able to afford homes. However, in a repossession a number of people are probably taking a huge financial bath - home buyers as well as home lenders. Nobody is sure how big that bath is, and whether it will have a domino effect.

An interest only loan sounds like a stupid idea to begin with. The whole point of buying a home is to build up equity. With interest only you are paying rent, but your landlord is a bank.

I own my home, and it is paid for. At this point it may be worth $60,000 although I paid $35,000 for it six years ago, but if I sold it, where would I live?

who can afford that? How can average people afford that? I also agree, interest only loans are not very bright.

My parents bought there house for like $35K and its paid for too. They have the same issue, if they sold it how would they replace it? Can't find one for $35K anymore.

Houses don't sell here for under $1 mil. There just aren't houses available for less than that. 10 years ago, the median price in this neighborhood was $750k. Now and then you'll see a house for $850k or $950k, but those get snatched up quickly and torn down, replaced with $2 mil+ houses.

Last week, a house went on the market for just over $1 mil. It sold during its open house. Under contract, signed, by the end of the open house.

So in general, I feel fine about the resale value of my home. We bought several years ago, selling a house bought back during the high-interest rate late-1980s for six times its purchase price. That enabled us to plunk down more than half for this house (which we bought for under a half-mil - hell, it's a fixer upper that will likely someday be purchased by a developer).

But.... I've watched my sil dump her house to one of those "we'll buy your house in one day" companies. It was apparently her best option with an ARM about to readjust.

I see credit tightening back up to how it used to be. Back when you had to plunk a certain (big!) percentage down on a home purchase, and the monthly fixed payment couldn't be more than a certain (reasonably small) percentage of your income. I see house prices deflating slighty in some markets, more significantly in others (the coasts will probably still have high housing costs).

I see home ownership being out of reach for a bigger percentage of Americans compared to today.

worth much less but are just selling for 1 mil? BTW how can people afford to buy them? At the open house? Amazing.

Here houses have been way upwards of 400K for anything that is nice, you know, average nice. Crazy.

I'm not sure how else to phrase it. For the most part, this neighborhood is not full of ordinary family homes. There are a few here and there (like the one that we own), but there are also lots of "estates" that fit the definition of an estate. Hedges/gates/hired help and all that.

I'm quite ordinary middle class. Most of the rest of the neighborhood isn't.

asking. Glad to hear that they are worth it in your neck of the woods.

My area is solid, which means houses are still selling at or just below asking prices and there is a positive year-to-year change in the median prices. My county on the other hand has large sections where value is tanking and quickly because there are many subprime and no docs loans that were built on air.

selling too but no longer over market value which they were in 2005 & 2006.

The older areas like mine (built up prior to 1990, so not that old) are doing much better. I know the local market well enough to know what to buy, I believe. This is the San Fran bay area, where a cardboard box on a weed filled lot would sell for $500,000. It's a peculiar market with perpetual pent-up demand.

and own two homes and three large lots. I paid less than probably most pay for a car.

I don't care about the resale value. I bought it for myself, my partner, and family.

rent and make mortgage payments. Most buyers have a house to sell before they can buy. That is our situation. We were planning on down sizing and paying off bills and save for my retirement but that will have to wait until our house sells.

relocated. We got hosed. Paid rent and mortgage payments/utilities/etc on both households for months and months, what felt like forever. Didn't make enough profit on the sale of our house and we have been renting since. We thought we would downsize too...little did we know the housing market here was about 13% overvalued. It has come down since we got here but is still overpriced in my opinion.

I wish you guys the best of luck. I hope that your struggle will end soon.

when they'll be hunting for somewhere to live that's NOT with their Mom. I am hoping that this fiasco will at least make rental property more affordable.

the spate of mortgage resets is not over until next May... expect manure to hit the ventilator

There is absolutely no reason housing is like that in NW NM, except for a developer run. They overbuilt, but they'll have to pay their investors soon.

I'd rent for 6mos to a year. you could probably live in a nice home for less then the mortgage you'd pay, then put the difference away towards your down payment.

As for the mortgage industry, there will always be mortgages available for people who earn enough income to afford their payments.

It wouldn't hurt to talk to a bank now to see what you need to do to qualify for the loan you'll need - just so there are no surprises. I don't think you can get an FHA loan at those home values, but there are still solid equivelants out there.