Home sales on track for worst year since bust

Well, again with the national debt being soooooo HIGH and climbing, what do you think is gonna happen to the housing market,and the economy?? How many band-aides can they use trying to fix this mess, before they run out of options? Raise the debt ceiling, come on, that will cause hyperinflation etc..! Its gonna be a rough ride, a ride like never before........

A co-worker of mine pointed out something I agree with regarding this. Credit is actually starting to loosen up some. Credit Card pre-approvals are hitting mailboxes again, mortgages are getting approved, but I (he) thinks most people are having problems with downpayments and closing costs. Even though credit is there, many folks (especially if they've been paying down debt, ect) don't have 10-20K saved up, so retail sales are still lagging behind cash purchases.

In any case though, that housing bubble was a REALLY big bubble. It's hard to say if we have really endured enough pain to have come out of the bottom. All the bottom talk is pure speculation anyway, there are still loads of amazing deals out there and news like this just gives you stronger bargaining chips!

Take care,
Chad.

Yes Chad,i agree there are some amazing deals out there at this point, BUT you watch what happens as the economy continues to go down hill. Yes all the talk about credit sounds promising, but all that will do is get more people in debt. People will get loans that they cant pay off, and everything will snowball from there, just like it did in the past.. www.inflation.us
will truthfully answer all your questions,unlike our own government, or your local news..

For too long home prices have been inflating to an extent that made it difficult for some to purchase. The market is only settling itself to where it should have been in the first place. My nephew was saying this for a long time now, and I thought he had no idea of what he was saying. He mentioned about a big bust in the economy, especially the housing market and said only the strong will survive it. "Bernadette, do not buy any house now, house prices will drop and you will get one for half the price it is now." Well the tables have to turn for a better life for investors. People who lost their homes did so for varying reasons. Lost of job is a perfect example. We as investors could turn this economy around and at the same time learn from this experience. This time is also a wake up call for many, a chance to deal and wheel and make big bucks. This is our time now, and we have to take full advantage. God Bless.

Sandra

that link opened up a spam program on my PC.

just go to (national inflation association or www.inflation.us)....It brings u right to there website,try it again there is no spam, everyone thats tried it, has told me they got right on..

10K-20K??? try 60K to 100K in the bay area! yes, banks will make loans if you have 20% down, or are applying for an FHA loan, which as we know has it's contingencies.

It's good to see house prices come down, but for those who bought about 5 years ago and have been paying their loans... what is the incentive to keep their property if they owe more than what it's worth... oh yes, I remember, the incentive is that people don't have equity to use as a down payment for another property anymore; so it's either stay in the undervalued property and continue paying the loan, or foreclosing and rent a place. Now, renting doesn't seem like such a bad idea versus the 'American dream' of owning your home, does it?

Thank you Bill for posting another great article.

Learning and progressing every day,

Valerie

I don't see how closing costs would reach to 100K anywhere unless you were buying 1M dollar properties, but your point only reinforces what I was saying. I'm quoting Suffolk County closing costs which are upwards of 16K for a cheap single family home, and although San Fran is EXPENSIVE (I've lived there!) it is not the most. But yes...the point stands. Credit is available if you can put 20% down...that 20% is out of many people's reach though!

Now as to why one should pay on a mortgage when he is upside-down...well that is more integrity and caring about honoring the deals he makes. But if you're 100K upside-down I realize the opportunity costs make it overwhelmingly compelling to default. What's 7-years on a credit report?

I still however hate labeling every buyer as a victim. Banks were indeed making careless loans, but buyers were CERTAINLY buying outrageously above their budgets just because they were presented with financing.

My wife and I purposely bought our primary residence 100K under what I could have been financed for. And we also drive a Corolla under the same principle. There is what you "qualify" for, and then there is what makes sense as responsible debt load. The McMansion days were blatant irresponsibility on buyers' parts as much as banks!

But back to the thread topic...there is still pain to be had in the housing market, I believe that confidently. But if you have cash, or creative financing, there are amazing deals to be had also!

Take care,
Chad.

Chad,

I didn't mean 100K for closing costs, I'm talking about the 20% down payment required to purchase a 500K home; in the bay area the average cost of a house in a middle class neighborhood will cost you a minimum of 500K, and it is by no means a mansion-I'm talking about an average 3/1, 1500sqft property!

I'm sorry but I cannot agree with you about the homeowners being at fault... the banks should not have approved them for a loan if they did not qualify. Homeowners who did not qualify and were given a loan had been paying their mortgage for at least 5-6 years before the collapse of the housing market. How much did the banks make from all those interest only loans?? Loads. And how much of the home did homeowner really own? zip, nada, a big "0". What the banks did is morally wrong. I don't like calling the homeowners 'victims' either, but many were definitely mislead when they 'purchased' their homes.

Kudos to you for sticking to your principles and buying below what you 'qualified' for. I also bought a property 5 1/2 years ago; it had been reduced 60K, so I thought I would be ok; well, that property has depreciated another 60K; I'm pretty much 'stuck with it'; I lose by keeping it, I lose by selling it. And it annoys the 'bleep' out of me, because I put a lot of money down, and have been paying the mortgage, and right now, I only have about 10K in equity in the property...while the bank has lost absolutely nothing!

Anyway, good discussion... and yes, the pain will prevail... but now I'm investing in properties that I know cannot possibly go any lower than what I'm buying them for!

wishing you success,

Valerie

I understand your point, and you're right, honest people who bought at "honest" market prices between 2005 and 2007ish took a big hit on values when the bubble popped and the music stopped, including clients I've worked with, and friends. I'm not condoning what the banks did, it was fueled by greed, I'm just emphasizing, and still believe that it takes two to get down in that dance. A LOT of consumers got in over their heads blinded by greed and propelled by ignorance. Any other explanation is kin to blaming AMEX for "letting" you get 20K into debt, or blaming the govt for 100K school loans when you went out and bought a car with some of the proceeds. (Not saying "you" did, but there is an amount of responsibility that rests on the consumer!)

And McMansion refers to the generalized state of consumers pre-burst, who were over housed and over-carred, not actual mansions. New York and Bay Area prices are similar; 700SF 1-beds start around 700K on low floors, and outlying Avenues here in Manhattan.

NOT EVERYONE...just like not every bank went loan crazy (besides meeting certain HUD quotas), but many, if not most.

Take care,
Chad.