Real Estate Crash thread

[uglymoney]

Result: buyer sez "Duh, THAT is the best one for me, let's go write an offer!" Believe me? ( Man, that's a bad photo... I've got to get it redone!)

Dude, hasn't anyone informed you that Milwaukee sucks? I'm suprised 100% of your clients don't refuse to buy a house just based on location.






Just kidding of course

We should get some people together and charter this boat some weekend. Some cool ships.

[comish]

No, it's not.

Many people hire a realtors to provide them insight into the process, local knowledge. Why? Because many people don't buy and sell properties every year. Frankly thats where realtors can add value because any schmuck can get a license and access to the MLS.

As the jackass that just recently closed on a house, (ie, I know I will lose value on paper in the next couple years, but am looking at it long term, needed a place to live, and liked the house a lot) and someone that doesn't buy houses every year (as in never), I did a shit ton of research. As the biggest purchase in one's life, if you don't do your own research, well then shame on you. The info (comps, current sales, neighborhood stats, etc) is out there and every person needs to do their own due diligence. Yes, I hired a realtor and took his opinion as one data point.

Someone else made a few good points. We don't have all the facts in the story, so she might, I say might, have a small case if she was actually presented with doctored/false/incorrect data which she made the decision from.

On the mortgage banker front, if she didn't talk to at least a few different banks/brokers, etc then she didn't do her due diligence. YOU make the choice. Walk into BofA, talk to 4 mortgage brokers (I did, sorry IG, there is a story there by the way as my loan didn't go all the smoothly, but it worked out for the best) and then make your own decision.

Buyer beware, do your homework, and then live with your decision. Unfortunately the American culture is sue first, take responsibility for your own decisions/actions never. Its an unfortunate aspect of both our legal system and culture. Spend some time in the rest of the world and no one would think of suing over 95% of what we sue for here...

[Hugh Conway]

snip

Yeah, I guess aligning the interests of someone you are paying $30k with your own interests is a stupid idea.

I've travelled enough to know 95% is bullshit and you have too.

[Bart T]

i have to laugh and root for the buyers in this one. sure there are _some_ ethical real estate agents out there but as for them being your "agent" as in traditional agency law -- that's a scam perpetrated by the realtor industry.

once you have a real agent, as in a lawyer, trustee, director, etc.... you have ZERO responsibility to do any due diligence on their decision because you are hiring the agent to provide that expertise. if i hire an agent, and the agent makes a bad deal, that person is liable, period. (though in corporate law there's now a gross negligence standard).

real estate agents work for the sellers, period. those that call themselves buyers agents knew or should have known that they are conning people -- their buyers are really only clients or customers. if you check the fine print, the so-called buyer's agents have few if any of the traditional fiduciary duties.

so i'm glad to see this chicken come home to roost. maybe if it does, we can get a system in place that makes sense for buyers and sellers. or at least stops the conning of buyers into believing that the so called buyers agents have any legally-enforceable duties of loyalty, confidentiality, and care. sure some are loyal, trustworthy and careful, but many aren't.

[Bart T]

oh, and i'm not suggesting that they should or will win their case at trial. until the facts come out, who knows what the values were or even if there was any negligence or fraud by the agent.

[timvwcom]

Had not heard before they were considering THIS as part of stimulus pkg??? Cross posting here and Economic Stimulus thread...

http://www.msnbc.msn.com/id/22826663/

Deal a boon to higher-priced housing markets
Tentative stimulus package could help buyers, sellers in those markets

WASHINGTON - A component of the U.S. government's tentative economic stimulus package announced Thursday would give an immediate lift to buyers and sellers in higher-priced housing markets.

The package agreed upon by Democratic and Republican members of the House would allow government-sponsored Fannie Mae and Freddie Mac to buy mortgages 50 percent more expensive than the current $417,000 limit. The Senate and White House still must sign off on the proposed stimulus plan, which also includes tax rebates for Americans.

House Speaker Nancy Pelosi and Republican Leader John Boehner of Ohio announced the deal in a press conference Thursday.

The higher cap of $625,000, to apply for one year, would breathe life into housing markets in New York, California and other pricey areas because lenders would feel more comfortable knowing Fannie and Freddie can buy and package the loans into securities that investors consider to be relatively safe.

A Freddie Mac spokesman said in an e-mail message that such an increase "would be in the best interest of the market and consumers."

To address the mortgage crisis, the package also raises limits on Federal Housing Administration loans, which are insured by the government in event of default, congressional aides said.

Groups representing Realtors, bankers and home builders, which have been hit hard by the mortgage market downturn, have been lobbying for such changes for months.

The National Association of Realtors has been pushing for a permanent expansion of the Fannie and Freddie limits to $625,000. It calculates that borrowers could save $3,000 to $5,000 per year in reduced interest costs as a result and projects up to 210,000 foreclosures could be prevented since refinancing into lower-rate loans would be easier.

Dale Stinton, the group's chief executive, said in a statement Thursday that increasing the loan limits "is a truly meaningful economic stimulus and should be enacted quickly."

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[rideit]

Too bad I'm not in a 'higher-priced market!'

[Core Shot]

WOW - so does that mean Jumbo loans will no longer pirced at a premium?

have seen a lot of news on this stimulus, but no one ever mentioned that.

[Benny Profane]

Yeah, the smaht guy on CNBC caught that one right away today. Much more significant than the beer money they're mailing us sometime in, uh, July. But, you know... "The higher cap of $625,000, to apply for one year, would breathe life into housing markets in New York, California and other pricey areas because lenders would feel more comfortable knowing Fannie and Freddie can buy and package the loans into securities that investors consider to be relatively safe."
Uh, does anybody think real estate securities are any kind of safe for the next 12 months?

[skier666]

As a side note, Santa Clara & Sunnyvale apartment rents are still increasing due to the shitty housing market. Market rents for a standard 2 bedroom apartment is around $1400/month. At the properties we manage, the only vacant units are the ones up for remodeling once the tenants move out. So far, there's been a quiet tech surge in Silicon Valley. Employees from India are continuing to receive Visas to work in this area, so rental market is pretty hot. Bottom line, demand is still outstripping supply in the area. Still not as hot as the tech-boom in 2000 when the same 2 bedroom units went for over $1900/mo.

[Spats]

Once again, the mainstream Democrats join the Republicans in giving tax breaks to the rich.

Here's how that works: mortgages from $417,000 to $625,500 now become less expensive, because they are now effectively government-insured and the mortgage interest rate drops. Can anyone who isn't rich afford a mortgage over $417,000? No, they can't. Now that lending standards have tightened, you need actual income to support that $500K loan. So we've just given a big tax break to people who can afford to buy big, expensive houses.

People who still think Democrats are "for" the poor and middle-class don't understand economics. They're throwing a few hundred dollar bone to everyone to make themselves look good, while subsidizing rich homeowners by tens of thousands of dollars each, not incidentally propping up the CDOs sold by the investment bankers that fund their campaigns, not to mention keeping home prices well out of reach of middle-class Americans.

(Yes, this is yet another reason why I support Ron Paul...to help the poor and middle-class, the first thing to do is stop subsidizing the rich.)

[Benny Profane]

Spats, you're being a little simplistic on that one. The Mayors just had a little get together and got on their knees for some kind of help from the federal government for this foreclosure problem, which is hitting large eastern cities hard. http://www.nytimes.com/2008/01/24/us...yt&oref=slogin
"The conference called on Congress to raise the limits on loans bought by Fannie Mae and Freddie Mac to stimulate the mortgage market, and increase Community Development Block Grants to help stabilize neighborhoods."
Hell, Baltimore and Cleveland are actually suing some large banks for predatory lending. We can leave the debate about the stupidity and chutzpah about that one for some other time.
Bottom line, and believe it or not, a home in even Newark sells for probably a half million and up, and it seems that it was stupidly easy to get a loan for that amount during the last few years. I read about some dude who got a NINJA loan (No Income No Job No assets) in California for a little over a mil. Stunning. Argue about that all you may, but the ashes are falling, and the cancer of urban foreclosures have to be stopped, or slowed.

[timvwcom]

Biggest drop EVER in new home sales...

http://money.cnn.com/2008/01/28/news...ex.htm?cnn=yes

...The weak December sales left full-year new home sales at 774,000, down 26 percent from the 1.05 million sales in 2006. That was the biggest drop since the government started tracking new home sales in 1963, surpassing the 23 percent decline posted in 1980.

No bottom yet Adam York, an economist with Wachovia, said the report confirms fears that the housing market won't bounce back anytime soon.

"We're expecting sales to decline into at least mid-2008," he said. "We think housing still has a long way to go..."

[Benny Profane]

Still a 9.5 month supply, too, even though they stopped building some time ago.

[Tuckerman]

Realistically priced house are moving just fine according to some of my Realtor friends.

[Toadman]

Still a 9.5 month supply, too, even though they stopped building some time ago.

Thought it was 11 months. In any event, it is amazing to see what $1 mill. gets you these days in So. Cal. Got a friend in Sherman Oaks, that paid $1.1 mill. back in '03 for a 2,000 sq ft. rambler in just an okay neighborhood. I also thought jumbo loans were not part of the refi equation or ?

[Benny Profane]

OK, alright, bend over, frugal America, here it comes. Pass the vaseline. If you didn't buy a house in the past 8-10 years because you thought the prices were absurd, hey, you're in the party now, because you're going to wind up paying for a lot of other's with your tax money.

http://www.nytimes.com/2008/02/22/bu...2homes.html?hp

"“I used to think,” Mr. Breakstone said, “that I would pay the piper later and enjoy life now. I’ve totally reversed that view.”"

well, fucking duh, jerkoff.

It's pretty amazing to read about people like those in this article who bought expensive home with next to nothing. Christ, one women is using her friggin disability checks to pay a mortgage.

[Hugh Conway]

The Subprime crisis explained
http://docs.google.com/TeamPresent?r...uth=true&pli=1

[RootSkier]

Does anyone want to buy a $128,000 house in Hamilton, MT? Because it's been on the market for 16 months with nary a nibble.

FUCK.

[DisArray]

IT TOOK JAPAN 15 YEARS TO SHAKE OFF THE EFFECTS OF THEIR REAL ESTATE BUBBLE...


They still haven't fully recovered...
Think about that for a minute...

[timvwcom]

Glum forecast for much of suburbia... walkable urban neighborhoods the desire of tomorrow;

The subprime crisis is just the tip of the iceberg. Fundamental changes in American life may turn today’s McMansions into tomorrow’s tenements.

The Next Slum?

Strange days are upon the residents of many a suburban cul-de-sac. Once-tidy yards have become overgrown, as the houses they front have gone vacant. Signs of physical and social disorder are spreading.

At Windy Ridge, a recently built starter-home development seven miles northwest of Charlotte, North Carolina, 81 of the community’s 132 small, vinyl-sided houses were in foreclosure as of late last year. Vandals have kicked in doors and stripped the copper wire from vacant houses; drug users and homeless people have furtively moved in. In December, after a stray bullet blasted through her son’s bedroom and into her own, Laurie Talbot, who’d moved to Windy Ridge from New York in 2005, told The Charlotte Observer, “I thought I’d bought a home in Pleasantville. I never imagined in my wildest dreams that stuff like this would happen.”

In the Franklin Reserve neighborhood of Elk Grove, California, south of Sacramento, the houses are nicer than those at Windy Ridge—many once sold for well over $500,000—but the phenomenon is the same. At the height of the boom, 10,000 new homes were built there in just four years. Now many are empty; renters of dubious character occupy others. Graffiti, broken windows, and other markers of decay have multiplied. Susan McDonald, president of the local residents’ association and an executive at a local bank, told the Associated Press, “There’s been gang activity. Things have really been changing, the last few years.”

In the first half of last year, residential burglaries rose by 35 percent and robberies by 58 percent in suburban Lee County, Florida, where one in four houses stands empty. Charlotte’s crime rates have stayed flat overall in recent years—but from 2003 to 2006, in the 10 suburbs of the city that have experienced the highest foreclosure rates, crime rose 33 percent. Civic organizations in some suburbs have begun to mow the lawns around empty houses to keep up the appearance of stability. Police departments are mapping foreclosures in an effort to identify emerging criminal hot spots.

...(lots more)...

[Hugh Conway]

http://www.bloomberg.com/apps/news?p...TCM&refer=home

Feb. 22 (Bloomberg) -- Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.

That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork

[powder11]

All the chicken littles who bitched about high RE prices that hoped and prayed for the market to drop so they could afford to buy a house should get in the game. Foreclosures may not be the most feel good way to buy a home, but it sure makes it affordable.

[rideit]

Real Estate of Jackson Hole has opened four new offices in he Teton Valleys in the last year, and purchased the largest existing firm here in Idaho.

Still going.

(I don't work for them, it is an observation)

[timvwcom]

Real Estate of Jackson Hole has opened four new offices in he Teton Valleys in the last year, and purchased the largest existing firm here in Idaho.

Still going.

(I don't work for them, it is an observation)

rideit, how much has your market "corrected" so far? Last we chatted I think you said it was slow but not down yet, still so? ^^^ On REofJH dude/dudette; Buy low, sell high? If you can afford it, THIS would seem to be the time to gain market share with your wallet.