Wow. Lots of lenders are revising credit and other restrictions,
but this one says:
NO MORE CONDO LOANS IN FLORIDA!
http://www.oomc.com/post/_marketing/.../phase7pg.html
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Wow. Lots of lenders are revising credit and other restrictions,
but this one says:
NO MORE CONDO LOANS IN FLORIDA!
http://www.oomc.com/post/_marketing/.../phase7pg.html
Properties in North Tahoe/Truckee are not moving very fast and at a lesser price than 6-24 months ago.
I just spent the day with a friend who is very smart and working for a very well known consulting firm. When he said "In one month, nobody will be able to get credit" of almost any kind, I rushed home and switched my 401k stuff into safety.
Sorry to hear that..since the S&P is back over 1500 :tongue:Quote:
Originally Posted by Benny Profane
What's smart guy saying now?
Probably the same thing, given what's apparently been happening recently: check out some of the info in the credit dying thread in the ski/snowboard forum. As to stocks, who knows what smart guy said (Benny didn't tell us) or may be saying.Quote:
Originally Posted by 4matic
If that is true (which I don't think it is) isn't it kind of funny, not ha ha funny but slightly sad funny, that as long as you have been rooting for the complete collapse of the real estate market and your hate the rich attitude. That if prices finally do reach a level where you can finally justify buying, you won't be able to get a loan? That is the only reason I check this thread anymore. Just to see whether Benny finally capitalizes on his predictions. Or if he at some point realizes that he missed the bottom and should have bought 12 months ago.Quote:
Originally Posted by Benny Profane
I don't know what Benny's predictions have been, but if you think the bottom was 12 months ago, I'll take my chances with Benny.Quote:
Originally Posted by mcsquared
I'm pretty sure he's saying that yeah, the market might sag a bit further in terms of prices, but what good will it do you if you can't get a loan to buy in at that time. Effectively speaking from a practical point of view, the buying bullseye "bottom" MAY have just passed by, because financing isn't going to be available for a while, at least not at a reasonable price. I suppose the true "bottom" is a total cost bottom, including Price/Value AND Loan Costs and Fees and whatever else goes into the mix.
So, he's arguing that we're passed the "holistic" bottom, until the next window at least, when prices are still low(er) and credit starts to loosen again, right?
I understand what you're saying, but I doubt that credit will tighten that much and/or for that long a period of time for buyers who are generally well-qualified to buy. I'd wager (I am wagering) that price decreases will outweigh any increased financing costs for well into the future (at least several years). My sense is that tighter credit is only one of several factors that will drop demand and decrease prices. In the S.F. Bay area, we have had such a significant run-up for such a long time. That's not going to unwind overnight. Real estate market psychology has a lot of inertia: just like everyone couldn't conceive of anything but that house prices would continue to increase at a rapid pace, now I think we're at the beginning of an extended period of general -and, perhaps (I hope), increasing - pessimism.Quote:
Originally Posted by Yossarian
The only really wise thing, though, is for us to acknowledge: what the hell do we really know about what's going to happen?
Quote:
Originally Posted by mcsquared
Oh, child. Don't hold your breath. This thing is going to be with us for some time. At least through the next campaign. Didya hear dear Hillary whining about this yesterday? Bad banks, bad. I fix.
One of my favorite cliches I've heard on CNBC the past week is "don't try to catch a falling knife". Yeah, I may be a dummy by running to safety right now, but I don't think so. I am of a certain age that almost requires risk aversion, and I see a lot of shit hitting the fan right now. Yeah, in the end, it may not affect the overall economy, or the world economy, that much, but I'm skeptical. This real estate crash is a world wide phenomenom, after all.
And, I don't hate the rich. I want to be rich, too. Hell, I am, by the standards of 90% of the world's population. And I want to keep it that way.
Quote from thismodernworld.com:
Greg Saunders:
Let Them Starve
So let me get this straight. For a few years now, the financial industry has made billions in risky subprime loans by essentially tricking people into believing they can borrow more than they’ll be able to pay back and now that this brilliant idea is going south, people are floating the idea of a government bailout. Well, screw ‘em. If you’re foolish enough to loan hundreds of thousands of dollars to people who can’t even balance their checkbooks, then you deserve to be as poor as your customers.
Then again, this is all assuming that these creditors were giving out loans in good faith in the first place. The way it looks to me is that these subprime loans were always about locking people into high interest loans for a few years until they went broke after which the banks would take back the house and any more money they can squeeze out of the debtors (thanks, bankruptcy reform!). Once they unload the house, which has almost certainly grown in value, they make a nice profit on top of the cash they gouged out of their now-homeless former customers.
The reason this has all come back to bite lenders in the ass is because they lacked the foresight to realize that when their customers were going broke, everybody else would be going broke as well, which would drive down the value of their repossessed houses and make them harder to unload to the next poor sucker who just wants to move out of an apartment.
In a truly free market economy, we’d be pointing these idiots towards the back of the line at the local soup kitchen, but these guys had a backup plan. They bribed (I mean, “lobbied”) every level of government that’s willing to cash their checks, insisting that if they pay the price for their moronic business practices, the entire economy will suffer. In short, they don’t need government bailouts to help themselves, but to help us.
I won't be nervous about the equity markets until a publicly quoted fund goes belly up. The only funds having trouble are the folks playing fun and games with derivatives in unregulated markets. They get no sympathy.
i'm not nervous about the equity markets because i rotated into short term fixed rate bonds in march..... and how many and which publicly traded funds went belly up from the start of 2000 to the start of 2003?Quote:
Originally Posted by 4matic
p.s.
and i sold corn for a nice profit last night. how much are those new marker bindings?
As someone who works in the mortgage banking industry, I can tell you that foreclosure is the last thing a bank wants, and is certainly not the way for a bank to make a profit. The costs associated with foreclosure almost always out weigh any potential "profit" from selling selling the asset after the borrower goes into default. The vast majority of loans are sold either to institutional invsestors (fannie, freddie) or on the secondary market. It doesn't make any sense for a bank to encourage defaults, as these loans would have to be repurchased from investors at a significant loss. Gain on sale from a foreclosure sale rarely recovers the initial loss from repurchase.Quote:
The way it looks to me is that these subprime loans were always about locking people into high interest loans for a few years until they went broke after which the banks would take back the house and any more money they can squeeze out of the debtors (thanks, bankruptcy reform!). Once they unload the house, which has almost certainly grown in value, they make a nice profit on top of the cash they gouged out of their now-homeless former customers.
Quote:
Originally Posted by up an down
I was wondering about the corn. Deflation is upon is.
Mutual funds dying off at record rate
By John Waggoner, USA TODAY
A record number of mutual funds are headed in a new direction: oblivion.
Since the bear market began in March 2000, 414 stock mutual funds have been liquidated, says Morningstar, the mutual fund tracker. That's half the liquidations in its database, which stretches back dozens of years and covers 4,074 stock funds. An additional 566 stock funds merged into other funds.
The number grows if you count different share classes for the same funds. Many funds issue multiple share classes, which give investors several different ways to pay sales commissions on their funds. Using that methodology, 1,741 stock funds have been merged or liquidated, vs. 1,672 before the bear began. Of course, since 1990, the number of funds has quadrupled.
As the son of a former controller for a large Md. bank (bought by somebody else a few years ago, I think), I can second this, based on what my dad's told me. Banks prefer not to have to foreclose on properties.Quote:
Originally Posted by GordonShumway
Here is an interesting article about historical Housing Values Ratio to Income.
As you can see here:
http://efinancedirectory.com/cimages...priced-out.gif
the current ratio is approx 5 times income. I guess the bubble does not apply to me, because I payed my place only 2.5 income.
I wonder how much of the high cost of housing is due to very rich people that buy multiple mansions, driving everyone's house prices in town up. I am sure that is a significant component in resort towns...
Here is the graph of housing values in Japan during the 10-year long slump:
http://efinancedirectory.com/cimages...ng-decline.gif
I don't think this can remotely happen in Colorado, but maybe in NYC and other places where prices are truly nuts (10x incomes and higher)?
the sky is falling! Benny rents, just so you know.
Oh, they know. I rant, too.
One of the better articles I've read explaining what's going on with the market. With some suggestions at the end of the article of where to put your money should the shit hit the fan in a big way.
http://articles.moneycentral.msn.com...et.aspx?page=3
Well, it finally happened. Even seasoned talking heads were almost laughing at him today about this, but he ain't nobody, and maybe he has a few Democrat's ears. It could actually happen. And he thinks the cost is something like 100-200 billion (to start).
http://www.cnbc.com/id/20411995
The government needs to bail out homeowners who have defaulted on their mortgages in order to "salvage" the U.S. economy, PIMCO founder Bill Gross told CNBC.
"This is not something that the Fed can handle on its own," Gross said, referring to the Federal Reserve's cut in the discount rate last week to stem a growing credit crunch.
A rise in housing defaults may slash U.S. home prices by 10% this year, Gross said, and that could bring the economy closer to recession.
The Federal Housing Administration can prevent turmoil in the housing market from spilling into the broader economy, said Gross, who is also chief investment officer at PIMCO, the nation's biggest bond fund.
"I'm talking about the FHA taking foreclosed loans and taking them onto their balance sheet, keeping interest rates low, preventing those adjustable rate mortgages from moving higher, and basically salvaging the U.S. economy," Gross said.
Gross pointed out that PIMCO has no subprime mortgage investments.
Still enjoying appreciation.
I kinda like how quiet our 'hood of spec homes is. Except there seems to be more door to door folks hitting us up and its dusty for lack of landscaping.
I'm not sure I'd be in favor of the gov't rescuing the stupid, but some would argue that it's their job. But one look at New Orleans, and I'd have to say not really.
From across the pond:
http://www.nytimes.com/2007/08/24/bu...411&ei=5087%0A
strange thing about markets....
"If there is a silver lining in Britain, it is that, unlike in the United States, home prices are still rising, for now, after more than tripling since 1997. Recent interest rate increases have yet to reverse the trend. In fact, the National Housing Federation recently predicted prices would rise 40 percent in the next five years, elevating the average price of a home, which already costs about 11 times the average British salary, to £302,400, or $618,000."
Proof that no matter how many times you tell folks their property is overpriced, they just don't believe it util the market meltsdown.Quote:
Originally Posted by Benny Profane
US was in that gleeful stage for the last 2 years - every economist (except the NAR whores) was saying housing was out of whack based on affordability fundamentals. But they wouldn't listen until the recent credit meltdown.
Brits are only a few months behind us.
They will learn, though, with an average $618k home price that is 11 times the average income.
That's way out of whack.
Awesome interactive graphic on the present state of pricing in various U.S. markets. Check out Vegas. Hoowee, if that ain't inflation/bubble, I don't know what is. Boston and NY mags, note how this happened on a smaller scaler for some time around '90. Prices don't always go up.
http://www.nytimes.com/interactive/2...G_GRAPHIC.html
Those charts are cool, but remember that they're year-over-year, not cumulative. Anybody who's been in their place in say, Boston for five years, has a long way to go before they get upside down.
Hmm, yes, high end properties will be safe:
http://www.nytimes.com/2007/08/25/business/25real.html
Quote:
Prices ranged from $750,000 to more than $7 million, according to Haute Living
The brits are dragging in money from overseas - a recent report I heard had 40% of the high-end London properties being purchased by Russians. They are providing a safehaven for the worlds wealthy and private equity.
Quote:
Originally Posted by cj001f
but....but.....I heard the Russians were buying NYC stuff, keeping it ripe. (Miami should be a lesson for this, somehow. Lot's of South American haven money, coming and going....)
More I think of it, how can you really depend on the, what, point something or other percent of the world who can come and go with their money? But what do I know. I'm an average nobody. I get to live the rest of my life like a schnook.
By keeping your laws liberal and your taxation and regulation light?Quote:
Originally Posted by Benny Profane
The US seems to be sliding backwards, or at least not making forward progress anymore, relative to the rest of the world.
Dude, I live in a place that celebrates America. Everybody in the world wants to come here, and they come here first. Christ, every gene in the world is partying here after they stood in line at the US emabassy at their origin country. As soon as they show up, it's,..... hey psssssst, buddy, no money down, own this space or buy this shiny thing, its ..........yours, yeah, go on, no, don't hug me or touch me, just sign this, and...this, and......this, and, well, congratulations! And Welcome to America! It's a Great Country! now get in line for the GWB.Quote:
Originally Posted by cj001f
what will all this do to real estate prices in canada?
Ten Year Note rate hit 4.30% from 5.30% in June. Potential for historical low rates exists if economy weakens much more..
http://www.marketwatch.com/tools/quo...&freq=1&time=9
Market is finally cooling off a bit here.
That is a good thing.
Inspector gadget or anyone else like that...Is it pretty tough to get loans right now with slightly better than average credit, short history, and 3% down? Or 80/20 loans? How's that playing out right about now? I'm thinking of flipping my condo in a few months and getting something bigger. Should end up with about 20k after comissions and fees, and looking in the neighborhood of 200-220k.
Just Monday I had a meeting with my mortgage guy at Countrywide and I asked him the exact same question. He said that as long as you have good credit and can prove your income (thats the big one). You will be fine. I asked about the 80/20 specifically since I am selling a house and that is the product the buyers are using.Quote:
Originally Posted by P_McPoser
Only other thing I would add is that are you borrowing >$417k, ie Jumbo or non conforming (and therefore purchasable by fannie/freddie etc) kinda a different story. Rates are high because most lenders don't want to make Jumbo's right now...Quote:
Originally Posted by mcsquared
If below, carry on, no major worries.
What's up with the prove your income BS. Why should a borrower need to do that? ;)
In case anyone cares what is going on on the construction side of things:
THE 2007 CREDIT CRUNCH - IMPACT ON CONSTRUCTION
By Robert Murray, Vice President of Economic Affairs
Information:
(800) 591-4462
http://mgh10.net/r/?ZXU=471037&ZXD=51238301
----------------------------------------------------------------------
THE 2007 CREDIT CRUNCH - IMPACT ON CONSTRUCTION
At mid-2007, the mounting turmoil in the financial and credit markets has raised concerns about the impact on the construction industry. During July and August, the financial stress widened - not just affecting subprime mortgage lenders, but also lenders engaged in more mainstream lending, as well as the stock market.
In August, the fears of a credit crunch picked up substantially, and the Federal Reserve took quick action to shore up liquidity - first by injecting billions of dollars into the U.S. financial system to keep the effective federal funds rate at 5.25%. The federal funds rate is the rate on overnight loans between banks. The Fed then lowered the discount rate from 6.25% to 5.75%. The discount rate is the rate at which banks can borrow directly from the Fed, which under more normal conditions they do rarely, since it may be viewed as a sign that a bank is struggling to raise funds from other sources. This reluctance seems to have been put aside for the moment, as the four largest U.S. banks (Citigroup, Bank of America, J.P. Morgan Chase, and Wachovia) borrowed $2 billion from the Fed, in a move to help encourage other banks to use the discount rate window.
The action by the Fed shows that it is willing to step in to keep the credit crunch from spiraling out of control. In its statement following the discount rate move, the Fed indicated that the "downside risks to growth have increased appreciably," and the Fed will act "to mitigate the adverse effects on the economy arising from the disruptions in financial markets." A drop in the federal funds rate is now much more likely to take place in the near-term.
Just how severe the credit crunch will be is unclear, but other credit crises in 1987 and 1998 were contained by actions from the Fed. The impact on the construction industry will be negative, but it will also be varied by major sector.
* The correction for single family housing will be deepened and extended by the current financial stress. Mortgage availability has been diminished for prime borrowers and those needing "jumbo loans" (greater than $417,000), which will further dampen homebuyer demand. While single family housing construction had been expected to show some improvement by mid-2008, that period of strengthening activity has now been pushed back to 2009. The two-year (2006-2007) decline for single family starts will now be 38% to 40%, with starts down another 3% to 5% in 2008.
* The commercial project types will also be affected negatively, although to a lesser degree than single family housing, with the impact becoming more discernible in 2008. The year 2008 was already expected to see weaker activity - down 6% in value and 10% in square footage, and these declines may now be 10% to 12% in value and about 15% in square footage. The cushioning element here is that market fundamentals for the moment are still relatively healthy - office vacancy rates retreated further in second quarter 2007, hotel revenue per available room (revpar) is still rising in 2007, etc. Marginal projects will be deferred, but projects with sound financials are still likely to go ahead.
* The impact on the institutional structure types will be muted and may not show up until 2009, since much construction here is the result of money already raised through the bond market. State and local finances are expected to weaken over the next year, but at present they are still relatively healthy, which supports the institutional structure types such as schools.
* The impact on the public works market will also be muted. Transportation projects are being helped by this year's 10% increase in the federal-aid highway program. The renewed attention being directed at infrastructure repairs in the aftermath of the I-35W bridge collapse in Minneapolis will offset a push next year for spending restraint. The environmental categories (sewers, water supply, levees, etc.) are showing strength in response to either the need for infrastructure work or U.S. EPA mandates, and will only be modestly affected by the credit crunch.
Overall, total construction starts in 2008 had been expected to edge up 2% in current dollars, following a 6% decline this year. With the credit crunch further weakening single family housing and dampening commercial building, it is now likely that total construction starts in 2008 will see a current dollar decline of about 3%.
View story online at http://mgh10.net/r/?ZXU=471034&ZXD=51238301
Both loans i've done in my life so far I've had to prove my income...I didn't realize that wasn't always the case. Oh well, that's what I get for not reading the day the credit died thread, probably answered by question in there.Quote:
Originally Posted by mcsquared