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peter
6401 Posts |
 Posted - 06/30/2009 : 11:16:31 PM
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Bernake has said that we will have a recovery by the last quarter
of 2009 and so are some economists that share Bernake's thinking.
I don't see that happening at all and with rising unemployment rate
and an unrelenting pace of foreclosures I see the opposite of what
Bernake has preducted. I subscribe to the school of thought of
Robert Chiller who predicts further falls in home prices that that
housing recovery will still remain sluggish and it is not possible to
expect the recovery in short-term.
We only have 6 month left but I don't see any possible "refi boom"
or "purchase boom" at all. I think at best we will be plugging along
doing loans here and there just to eke out a decent living. Brokers and
loan officers who can make a decent living and pay their bills without
having to give up the business should be proud of themselves of being
the "2009 ultimate suvivors."
Anyone has a different outlook and sees good news or growths ahead
that I don't see. Let's hear your input.
Peter |
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1003s.com
4131 Posts |
Posted - 06/30/2009 : 11:44:10 PM
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I expect RE prices will continue to fall through
2012 and 2013 and will become fairly stable for
about 6-8 years, before the market begins to
rally again around 2020. Most economists,
see a much more rosy picture of the market
than I do though. |
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peter
6401 Posts |
Posted - 07/01/2009 : 12:02:50 AM
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Bob, then those homeowners who still have 20% equity will lose
it in the next few years and those who have already lost their
home equity will likely become new foreclosure casualties.
We won't be out of the woods until 2012 really, and by the time
the market becomes stable in 2020, many of us will be dead by
that time.
I hate to agree with your realistic outlook which is more
pessimistic than mine though.
Peter |
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rtrefflich
5176 Posts |
Posted - 07/01/2009 : 12:06:08 AM
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It all depends upon banks. If they loosen guidelines and begin allowing people to borrow we will be out of this very quickly. If they continue to hoard the money to themselves and live off of the money the government brought them you could be right. 2012 could just be the start of the increases.
The number one sector we have in this country is housing. If it does good, the economy does good. |
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peter
6401 Posts |
Posted - 07/01/2009 : 12:31:27 AM
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There were some good signs this week when J.P. Morgan Chase and
CitiBank have announced their jumbo loan lending programs and have
earmarked billions of dollars for this program to start in July.
They want to be players just like B of A which has the largest
share of the market. This will ease up conventional jumbo
lending (not superjumbo)as Chase and Citi will be the investors
and will do business thru correspondents as well. Of course, this
is meant for jumbo purchases and jumbo refis for A paper customers only.
But FHA and Agency guidelines are getting worse and since Radian
has pulled out of CA, there is now no lender who can offer a 5% down
conventional.
As long as property prices keep falling, the banks will never loosen up
because the lending environment is still very risky for lenders.
Peter |
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kristy19
1 Posts |
Posted - 07/01/2009 : 02:26:38 AM
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hello.
Thank you for sharing your information.
i am agree with you all.
nice posting here.
keep it up.
When someone shares something of value with you and you benefit from it,
you have a moral obligation to share it with others.
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clarenceworley
5653 Posts |
Posted - 07/01/2009 : 05:33:32 AM
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| Lex Luthor finally follows through with his plan to blow California into Bolivian, and establishes Nevada as the new coastline. |
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VVance
6500 Posts |
Posted - 07/01/2009 : 05:47:11 AM
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quote:
Originally posted by rtrefflich
It all depends upon banks. If they loosen guidelines and begin allowing people to borrow we will be out of this very quickly. If they continue to hoard the money to themselves and live off of the money the government brought them you could be right. 2012 could just be the start of the increases.
The number one sector we have in this country is housing. If it does good, the economy does good.
That's the truth.
The availability of financing is one of the major contributors to the strength of housing. The way things are now, Banks have little interest in lending on real estate. With the new Government guidelines going into effect at the end of July combined with the insane appraisal system, I have confidence we're going no where but down.
Recovery? No chance for '09, probably not '10.
Banks are already telling you that they don't expect housing to bounce back (thru tight credit). |
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johnnyboy38109
4341 Posts |
Posted - 07/01/2009 : 05:59:56 AM
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quote:
Originally posted by VVance
quote:
Originally posted by rtrefflich
It all depends upon banks. If they loosen guidelines and begin allowing people to borrow we will be out of this very quickly. If they continue to hoard the money to themselves and live off of the money the government brought them you could be right. 2012 could just be the start of the increases.
The number one sector we have in this country is housing. If it does good, the economy does good.
That's the truth.
The availability of financing is one of the major contributors to the strength of housing. The way things are now, Banks have little interest in lending on real estate. With the new Government guidelines going into effect at the end of July combined with the insane appraisal system, I have confidence we're going no where but down.
Recovery? No chance for '09, probably not '10.
Banks are already telling you that they don't expect housing to bounce back (thru tight credit).
I am sure its just me, but I don't think credit is too tight at all. Lenders are doing now what they should have held fast to before the bust.
All these crazy programs like NINA, SISA, 100% with 580s, etc.,............who in their right would lend somebody $500k with only a credit score as a basis for making the deal?
Or lend someone 100% financing when they have less than one mortgage payment in savings?
I digress from Peter's post, but it seems to be that there has been normalcy restored.
People got away from fundamentals and now we're all paying the price. |
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VVance
6500 Posts |
Posted - 07/01/2009 : 06:11:06 AM
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quote:
Originally posted by johnnyboy38109
quote:
Originally posted by VVance
quote:
Originally posted by rtrefflich
It all depends upon banks. If they loosen guidelines and begin allowing people to borrow we will be out of this very quickly. If they continue to hoard the money to themselves and live off of the money the government brought them you could be right. 2012 could just be the start of the increases.
The number one sector we have in this country is housing. If it does good, the economy does good.
That's the truth.
The availability of financing is one of the major contributors to the strength of housing. The way things are now, Banks have little interest in lending on real estate. With the new Government guidelines going into effect at the end of July combined with the insane appraisal system, I have confidence we're going no where but down.
Recovery? No chance for '09, probably not '10.
Banks are already telling you that they don't expect housing to bounce back (thru tight credit).
I am sure its just me, but I don't think credit is too tight at all. Lenders are doing now what they should have held fast to before the bust.
All these crazy programs like NINA, SISA, 100% with 580s, etc.,............who in their right would lend somebody $500k with only a credit score as a basis for making the deal?
Or lend someone 100% financing when they have less than one mortgage payment in savings?
I digress from Peter's post, but it seems to be that there has been normalcy restored.
People got away from fundamentals and now we're all paying the price.
Not all are paying the price. For all that take the position that "we did it to ourselves", we don't have the free ride of bailout money like others.
In terms of credit, understand that HVCC, a very flawed credit scoring model and the new disclosure guidelines which take effect the end of this month, are anything but normal.
We are now witnessing and living what happens when Government becomes more involved.
The future of originations seems likely to be working for a large bank making $3,000.00 a month. |
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Mandyvilla
6290 Posts |
Posted - 07/01/2009 : 06:26:49 AM
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Folks, we still have over 2 trillion in Alt A resets coming in 2010 - 2011. My number one call is from the confumbo category and the homeowner is upside down. The last wanna be refi I talked to last night is SOL on equity. Surrounding short-sales and foreclosures have killed values in his neighborhood. If rates stay the same through his reset in Nov 2010, his payment will go up by $800. It's a freight train coming right at you. I talk to at least 3 of these borrowers a day, easily.
We are going to see massive foreclosures on McMansions - there's no way to stop it if a fix is not found. Unfortunately, for the remainder of 2009, it's going to be a slow purchase market. We have banks in our area tapering the release of foreclosures, I guess in an attempt to keep the values from sliding further. |
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Edumakated
238 Posts |
Posted - 07/01/2009 : 07:23:22 AM
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I don't see how any recovery can take place without stabilizing the housing market. People do not have the ability to move for employment opportunities because they are upside down and cannot sell their homes.
The banks and MI companies have created this circle of death by not lending. The banks keep saying prices are declining so they don't want to lend and we keep saying prices are declining because you won't lend!
No one is suggesting that we need to go back to the senselessness of the SISAs, NINJA's and all that other BS. However, it absolutely makes no sense that in some markets QUALIFIED borrowers can't buy starter homes without 10% down. I also find it ironic that the very automated bull**** programs that brought this havoc on us are being used even more now - FICOs, AVMs, black & white u/w guidelines.
Banks need to get their heads out of their asses and actually underwrite individual mortgages instead of trying to stuff everything in a call center. I have seen too many good loans getting denied over technical BS versus credit risk. Millionaire wants to buy a condo in a 4 unit building, loans denied because some lenders won't lend on less than 10 units. HOA suing a contractor because he damaged the tile in a lobby, sorry loan denied over pending lawsuit despite the borrower's being more than qualified. Borrower has no debt, so FICO score is low... sorry. We don't care that you have $200k in cash and don't need credit. The computer says you have a 650 FICO score since you only have 2 tradelines. WTF!
We will see a rebound in housing prices at some point though. The only good thing about this crisis is that developers have stopped building, so inventory will have to go down which can only support housing prices. A big part of this crash was simply due to overbuilding as well.
The residential real estate business has got to be the biggest fustercluck I have ever seen. The mindlessness of it is just numbing at times. |
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jjohns
59 Posts |
Posted - 07/01/2009 : 07:46:58 AM
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My shop is doing very well..............one of our best months in 5 years last month and July is looking to be a record. Trying to hire 5 more LO's and a processor. I had 9 LO's take 75 apps yesterday (we don't consider it an app unless we get the SSN and pull credit)....so our outlook is rosy....if rates spike sharply we will lower our expectations, but as long as par is under 6 the train keeps rollin'.
Not trying to kick others while they are down, but it seems to me there are plenty of loans out there right now, little competition. Response rates are in double digits, phones won;t stop ringing, and programs exist for most callers unless the are just plain late on the mortgage. |
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ritabradley01
4945 Posts |
Posted - 07/01/2009 : 08:02:18 AM
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I most closely agree with this post and if you've got cash, I'd suggest buying solid tangible assets (and not on credit).
quote:
Originally posted by 1003s.com
I expect RE prices will continue to fall through
2012 and 2013 and will become fairly stable for
about 6-8 years, before the market begins to
rally again around 2020. Most economists,
see a much more rosy picture of the market
than I do though.
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VVance
6500 Posts |
Posted - 07/01/2009 : 08:05:23 AM
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quote:
Originally posted by ritabradley01
I most closely agree with this post and if you've got cash, I'd suggest buying solid tangible assets (and not on credit).
quote:
Originally posted by 1003s.com
I expect RE prices will continue to fall through
2012 and 2013 and will become fairly stable for
about 6-8 years, before the market begins to
rally again around 2020. Most economists,
see a much more rosy picture of the market
than I do though.
It really brings up a great question. Why would anyone want to buy something now that was going to be cheaper in a few years?
If values continue their drop, even many of the loans written today, under tougher standards, are potential future foreclosures. |
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darkstar
25934 Posts |
Posted - 07/01/2009 : 08:11:31 AM
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>>>> What is your outlook for the remaining half of 2009?
Assuming it stays the same, good...
Assuming the economy continues spiral, not so good... |
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Edumakated
238 Posts |
Posted - 07/01/2009 : 08:23:44 AM
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The first half of the year was a blockbuster for company and me personally (last year was too). Most the LOs who flamed out in '06 till now didn't make it back in time and left all the business for the survivors. However, I don't see a solid refinance boom continuing unless we get some changes in how refinances are done. Value declines are problematic, lack of 2nd mortgages (no cooperation on subordinations) shut down a lot of borrowers as having to get high cost PMI doesn't make financial sense for many borrowers by eroding the savings from the lower rate.
Purchases are picking up, but seeing many deals die on the vine due to low appraisals. Overall, I will probably do the same or maybe slightly better than I did last year which was my best year income wise. |
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katbunk
3568 Posts |
Posted - 07/01/2009 : 08:37:29 AM
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quote:
Originally posted by kristy19
hello.
Thank you for sharing your information.
i am agree with you all.
nice posting here.
keep it up.
When someone shares something of value with you and you benefit from it,
you have a moral obligation to share it with others.
I agree with you Kristy, we should all share our knowledge.
Speaking of sharing, where is London, NA |
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KHufford
10370 Posts |
Posted - 07/01/2009 : 08:38:06 AM
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I am glad to be in AZ....kicking ass and taking names this year. Hiring like crazy, just expanded our office size to triple and profits through the roof. Purchase business is booming here again....hopefully it should last a couple years.
We just hired 2 more UW's and 5 processors, and tripled our office space to like 25,000 sq ft in a prestigious building.
We bought TV ads for all AZ Diamond Backs games, 10 Billboards, Radio Ads on the Dan Patrick show, Highway digital signs.....
Many people in my office are already over 100k-200k for the year, taking trips and enjoying this business.
Get off that ledge Peter!
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efrederick
1258 Posts |
Posted - 07/01/2009 : 10:33:57 AM
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quote:
Originally posted by 1003s.com
I expect RE prices will continue to fall through
2012 and 2013 and will become fairly stable for
about 6-8 years, before the market begins to
rally again around 2020. Most economists,
see a much more rosy picture of the market
than I do though.
I think you're dead on. |
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1003s.com
4131 Posts |
Posted - 07/01/2009 : 10:36:48 AM
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quote:
Originally posted by KHufford
I am glad to be in AZ....kicking ass and taking names this year. Hiring like crazy, just expanded our office size to triple and profits through the roof. Purchase business is booming here again....hopefully it should last a couple years.
We just hired 2 more UW's and 5 processors, and tripled our office space to like 25,000 sq ft in a prestigious building.
We bought TV ads for all AZ Diamond Backs games, 10 Billboards, Radio Ads on the Dan Patrick show, Highway digital signs.....
Many people in my office are already over 100k-200k for the year, taking trips and enjoying this business.
Get off that ledge Peter!
Kyle, be sure and look out for the,
"Pop off mess up man"
it sounds like he might be headed your
direction. |
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peter
6401 Posts |
Posted - 07/01/2009 : 5:24:14 PM
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Things are looking bleaker in upper Los Angeles where I work. Althugh
I get loans in from new and old customers as well as purchase loans from
numerious realtors -- almost all of them are "junk loans" that I would
classify as "Fantasy Loans" enough to keep our processors occupied and give
our broker the "illusion of business picking up." Until you fund these loans,
it is simply "ghost money" in your dream. I am just happy struggling with
a few funded loans per month and have no intention to expand further into
the world of nothingness but "troubles in the sky."
Kyle, I am glad that your business is now terrific. Now that you can ask
your boss to send me a vacation package to AZ when I can be interviewed with him.
I cannot go there on my own as the bus ticket thru the Greyhound Line is still
a luxuary in a recessionary economy like now.
I do have a Book of Hope and could be a great contribution to your company.
I wouldn't mind retiring in AZ as the sunshine and dry weather could not harm
my health.
Cheers,
Peter |
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peter
6401 Posts |
Posted - 07/01/2009 : 5:24:24 PM
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Things are looking bleaker in upper Los Angeles where I work. Althugh
I get loans in from new and old customers as well as purchase loans from
numerious realtors -- almost all of them are "junk loans" that I would
classify as "Fantasy Loans" enough to keep our processors occupied and give
our broker the "illusion of business picking up." Until you fund these loans,
it is simply "ghost money" in your dream. I am just happy struggling with
a few funded loans per month and have no intention to expand further into
the world of nothingness but "troubles in the sky."
Kyle, I am glad that your business is now terrific. Now that you can ask
your boss to send me a vacation package to AZ when I can be interviewed with him.
I cannot go there on my own as the bus ticket thru the Greyhound Line is still
a luxuary in a recessionary economy like now.
I do have a Book of Hope and could be a great contribution to your company.
I wouldn't mind retiring in AZ as the sunshine and dry weather could not harm
my health.
Cheers,
Peter |
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VVance
6500 Posts |
Posted - 07/01/2009 : 5:28:40 PM
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quote:
Originally posted by peter
Things are looking bleaker in upper Los Angeles where I work. Althugh
I get loans in from new and old customers as well as purchase loans from
numerious realtors -- almost all of them are "junk loans" that I would
classify as "Fantasy Loans" enough to keep our processors occupied and give
our broker the "illusion of business picking up." Until you fund these loans,
it is simply "ghost money" in your dream. I am just happy struggling with
a few funded loans per month and have no intention to expand further into
the world of nothingness but "troubles in the sky."
Kyle, I am glad that your business is now terrific. Now that you can ask
your boss to send me a vacation package to AZ when I can be interviewed with him.
I cannot go there on my own as the bus ticket thru the Greyhound Line is still
a luxuary in a recessionary economy like now.
I do have a Book of Hope and could be a great contribution to your company.
I wouldn't mind retiring in AZ as the sunshine and dry weather could not harm
my health.
Cheers,
Peter
From my friends in LA, I'm hearing the same thing about the market looking bleaker. You are not alone. |
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peter
6401 Posts |
Posted - 07/01/2009 : 5:32:39 PM
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Glad that AZ has now picked and doing very well. In upper Los Angeles,
things are just the same with only the FTHBs now making multiple offers in
low price ranges. Fewer L/Os and brokers are remaining in the business,
and realtors are leaving business if they can find jobs that pay better or
pay fixed incomes.
Most FTHBs still have issues on DTI, past credit, gaps of empoyment,
min equity rule, etc. and files are still hard to fund. I do not see
any improvement in sight for now at least in my area.
Only consolation is low rates and extremely strong "false demands" from
the unqualified house hunters ranging from the foreclossure bailout artists to
the property flippers. We have gotten more than 72 files in our pipeline just
like a group of farmers who have harvested a lot of good corns on the outside
and after processing the corns the farmers will find the real diseases inside
the husks that make the harvested corns inedible.
Peter |
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Agent_Mike
987 Posts |
Posted - 07/01/2009 : 5:37:37 PM
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More government intervention - mainly in the aforementioned resetting adjustable storm that cannot be refinanced out of due to value and or income. I imagine the government using the bail-out monies as leverage to shank the investors on those notes and somehow force loan mods to keep rates from resetting. FED will continue to keep the rates low, but will step up their purchase commitment of MBS in response to the higher inventory from rate reset/foreclosure fallouts.
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FLAmortgage
433 Posts |
Posted - 07/01/2009 : 5:41:44 PM
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| I see the tax credit being extended another year..... I just hope they don't announce this until the current is expired. |
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VVance
6500 Posts |
Posted - 07/01/2009 : 5:54:56 PM
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quote:
Originally posted by FLAmortgage
I see the tax credit being extended another year..... I just hope they don't announce this until the current is expired.
Why not increase it to $15,000.00 and include all buyers?? |
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VVance
6500 Posts |
Posted - 07/01/2009 : 7:47:00 PM
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quote:
Originally posted by ZF
Its been a great start to a depressing mid cycle. Im am demanding better results, but turn times in wholesale killed my efforts, I hope direct will pan out better.
We had a horrible first half. However, there are strong deals in the pipeline almost ready to close. And yes, turn times and underwriting are horrible most places. For what it's worth, this is the toughest I've ever seen it. With the new disclosure items taking effect the end of this month, turn times will likely be worse. |
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peter
6401 Posts |
Posted - 07/01/2009 : 8:56:32 PM
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VVance wrote:
"From my friends in LA, I'm hearing the same thing about the market looking bleaker. You are not alone/"
Mandy is also right about McMansions will be in massive foreclosures,
and L.A. is a case in point. From Malibu to Beverly Hills, I see only
the homeowners who are prisoners of their own expensive homes. These
are stated income people who got their loans thru No Doc, SISA, or SIVA
during 2002 thru 2006. There is no solution for them but walking away.
In response to rising foreclosures, actually happening, and anticipated
to be happening, lenders need to tighten their guidelines and their
overlays. This is a prudent practice and indeed business-like. According
to statistics, 24 million homeowners are now underwriter. As you can
see down the road, many million more who have about 10% equity today
will lose their equity and will become upsidedown by 2011. Even at that
time, I don't see how the investors will come in to finance the
"cursed generation" of bygone homeowners! Tales of misery abound for
multiple property homeowners and jumbo/superjumbo loans holders who
have no place to go but foreclosure.
But the new "upbeat and alive" generation of FTHBs is coming in
buying up homes that are less than $300,000 in L.A. They are the
first time buyers with no heavy baggage of the past. They are the
ones that keep a little business going right now for the broker shops
and effete lenders to breath from day to day.
Peter |
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VVance
6500 Posts |
Posted - 07/01/2009 : 9:24:58 PM
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quote:
Originally posted by peter
VVance wrote:
"From my friends in LA, I'm hearing the same thing about the market looking bleaker. You are not alone/"
Mandy is also right about McMansions will be in massive foreclosures,
and L.A. is a case in point. From Malibu to Beverly Hills, I see only
the homeowners who are prisoners of their own expensive homes. These
are stated income people who got their loans thru No Doc, SISA, or SIVA
during 2002 thru 2006. There is no solution for them but walking away.
In response to rising foreclosures, actually happening, and anticipated
to be happening, lenders need to tighten their guidelines and their
overlays. This is a prudent practice and indeed business-like. According
to statistics, 24 million homeowners are now underwriter. As you can
see down the road, many million more who have about 10% equity today
will lose their equity and will become upsidedown by 2011. Even at that
time, I don't see how the investors will come in to finance the
"cursed generation" of bygone homeowners! Tales of misery abound for
multiple property homeowners and jumbo/superjumbo loans holders who
have no place to go but foreclosure.
But the new "upbeat and alive" generation of FTHBs is coming in
buying up homes that are less than $300,000 in L.A. They are the
first time buyers with no heavy baggage of the past. They are the
ones that keep a little business going right now for the broker shops
and effete lenders to breath from day to day.
Peter
I know one manager of a huge RE office in the valley. He's not even sure if they are going to keep the doors open.
Being out of the area and not knowing, have any of the big RE offices in your area closed up shop?
I've only seen smaller offices close here...not any big ones. |
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1003s.com
4131 Posts |
Posted - 07/01/2009 : 10:19:18 PM
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quote:
Originally posted by VVance
quote:
Originally posted by ritabradley01
I most closely agree with this post and if you've got cash, I'd suggest buying solid tangible assets (and not on credit).
quote:
Originally posted by 1003s.com
I expect RE prices will continue to fall through
2012 and 2013 and will become fairly stable for
about 6-8 years, before the market begins to
rally again around 2020. Most economists,
see a much more rosy picture of the market
than I do though.
It really brings up a great question. Why would anyone want to buy something now that was going to be cheaper in a few years?
If values continue their drop, even many of the loans written today, under tougher standards, are potential future foreclosures.
That is a good question Vince. I expect there
are an endless number or reasons.
Some folks might think, things can't get much
worse than this. And others, may purchase a
house to put down roots, that will help give
their children a sense of belonging.
Good schools, and low crime rates,
will help sell houses in any market. |
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propertylender.c
1615 Posts |
Posted - 07/01/2009 : 11:24:34 PM
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The last recession started in 1990 and ended late 1991...
California did not start to bottom until 1997 and took off after 2002.
We have a very long way to go unfortunately. |
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peter
6401 Posts |
Posted - 07/02/2009 : 05:33:40 AM
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I agree with Bob that a certain number of people do still buy
houses to give their families a sense of belonging. It is also
happening in my market, Los Angeles, but normally they do buy
lower priced houses these days, i.e. less than $350,000, and
they make sure that the monthly payment is in line with their
incomes. The age of rationalization in housing is a good and
new development in the new buyer's thinking after seeing the
pains of the housing recession. Also, most of them buy with
a very little down payment, like 3.5% FHA down payment, with
a thought in the back of their minds that this would be
their exist strategy if the house they bought would drop in
value on a long term basis, like 30-50%, which is also possible
if our economy is transitioning into a depression.
In California, the 3 bedroom 2 bath homes are now availalbe for
less than $100,000 in some areas and at this price range it is
cheaper to own than to rent. There are multiple offers everywhere.
Still, this is only a drop in the bucket as the number of homes
sold and closed per month is still much behind the rate of new
foreclosures.
And more potential foreclosures are lurking in the background with
the unemployment rate rising being the driving force, and there is
no end insight for real estate values to come back in a few years
and we will see complete retrogression or at best stagnancy for the
next 3-5 years to come, if you read the recent comments by
Robert Shiller, the Yale professor and the founder of the Shiller Index
of housing.
Peter |
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propertylender.c
1615 Posts |
Posted - 07/02/2009 : 07:50:46 AM
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quote:
Originally posted by peter
I agree with Bob that a certain number of people do still buy
houses to give their families a sense of belonging. It is also
happening in my market, Los Angeles, but normally they do buy
lower priced houses these days, i.e. less than $350,000, and
they make sure that the monthly payment is in line with their
incomes. The age of rationalization in housing is a good and
new development in the new buyer's thinking after seeing the
pains of the housing recession. Also, most of them buy with
a very little down payment, like 3.5% FHA down payment, with
a thought in the back of their minds that this would be
their exist strategy if the house they bought would drop in
value on a long term basis, like 30-50%, which is also possible
if our economy is transitioning into a depression.
In California, the 3 bedroom 2 bath homes are now availalbe for
less than $100,000 in some areas and at this price range it is
cheaper to own than to rent. There are multiple offers everywhere.
Still, this is only a drop in the bucket as the number of homes
sold and closed per month is still much behind the rate of new
foreclosures.
And more potential foreclosures are lurking in the background with
the unemployment rate rising being the driving force, and there is
no end insight for real estate values to come back in a few years
and we will see complete retrogression or at best stagnancy for the
next 3-5 years to come, if you read the recent comments by
Robert Shiller, the Yale professor and the founder of the Shiller Index
of housing.
Peter
Peter, you and I know that the $100,000 range for a house are usutally the training head quarters for the Blood and Crepts gangs.
The cheapest 1 bedroom condo. in my area is $160,000 (built in 1975) and that went into escrow in two days. (yest it was a foreclosure.)
$350,000 range houses are again in gang infested areas.
We have another 3 to 5 years before we begin to bottom.
Than we will lag another 3 to 5 years before the market begins to take off. |
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jchvw9
73 Posts |
Posted - 07/02/2009 : 08:22:37 AM
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| I am seeing all over the country that prices are reaching a point to where it is becoming much more beneficial for people to buy rather than rent. This is the most true in the lower and middle price ranges. For example, here in the midwest houses were selling for approximately 100 times your monthly adjusted gross rental income. Now I am seeing that many investors are having huge move-in incentives and reduced rent just to try to maintain 130 times adjusted gross. Their houses are worth less, but that doesn't mean their mortgages change and they are trying to maintain as much rental income as possible to wash their mortgage. Lower and middle class America is starting to buy homes again and inventory in this range is falling. I agree with Mandy about the McMansions. This group of people had the cash to hold out for a while longer, but it looks like the group is going to shift soon. We are about to see huge movement in the upper-middle and upper class price ranges. Grab your rain coats, the stiff lips are about to rain down. |
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peter
6401 Posts |
Posted - 07/02/2009 : 11:10:01 AM
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Al, if you talk about Burbank, Glendale, and Pasadena areas where
you are, your are right. But I am talking about Palmdale, Lancaster,
Cherry Valley, Menefee (Riverside) and there are good areas in those
towns. I had a customer who works in Sylmar and she went up to
Palmdale and bought a $96,000 three bedroom and two bath home in
a nice neighborhood too.
Even in San Fernando Valley, there are already condos (2/2) that
are listed for less than $100,000 as you can see from the MLS.
Yes, you can buy a nice house for $350,000 in a nice area like
West Hills and Winnetka, West San Fernando Valley. You can see
from the MLS.
Peter |
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egamarro
278 Posts |
Posted - 07/02/2009 : 11:48:51 AM
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Okay, campers, rise and shine!
Don't forget your booties
because it's cold out there today.
It's cold out there every day.
What is this, Miami Beach?
Not hardly. You can expect hazardous
travel later with that blizzard thing.
"That blizzard thing"?
Here's the report.
The National Weather Service
is calling for a big blizzard thing.
They are. But there's another reason
why today is especially exciting.
Especially cold.
The big question
on everybody's lips-
On their chapped lips.
Do you think Phil will come out
and see his shadow?
- Punxsutawney Phil.
- That's right, woodchuck chuckers.
It's Groundhog Day!
I couldn't help myself. |
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69gavin
8 Posts |
Posted - 07/02/2009 : 1:02:08 PM
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quote:
Originally posted by peter
Al, if you talk about Burbank, Glendale, and Pasadena areas where
you are, your are right. But I am talking about Palmdale, Lancaster,
Cherry Valley, Menefee (Riverside) and there are good areas in those
towns. I had a customer who works in Sylmar and she went up to
Palmdale and bought a $96,000 three bedroom and two bath home in
a nice neighborhood too.
Even in San Fernando Valley, there are already condos (2/2) that
are listed for less than $100,000 as you can see from the MLS.
Yes, you can buy a nice house for $350,000 in a nice area like
West Hills and Winnetka, West San Fernando Valley. You can see
from the MLS.
Peter
Got to agree we specialise in the Riverside County area, and areas like Menifee, Perris, Sun City, Idylwild have a pretty significant inventory of bank owned property in the below 100k range. Up that to 120k and I have personally gone into a dozen great houses during the day in perfect neighbourhoods with 3 bedrooms plus, some with pools, all with backyards and at least 1800 sq ft. I agree at those prices why not own then rent and that is what our customers are jumping all over |
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frank drigotas j
3845 Posts |
Posted - 07/02/2009 : 1:08:16 PM
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My take on the rest of 2009 is that the economy will remain dismal, perhaps get slightly worse by all indices.
I believe that portends more bad news for the mortgage industry, which is already on the ropes.
If you want stats, go look up your own. I am not going to spoon feed you.
dollar |
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wadeger
542 Posts |
Posted - 07/02/2009 : 1:35:28 PM
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| i think Mandy brings the best clarity to the OP's original question.... with $2 trillion of Alt A product about to adjust, one could predict at least $1 trillion of new foreclosures, which is devestating... our country cannot sustain these mountains of losses... and our biggest state in crisis, California, with further trepedation ahead... i forget what i heard a while back, but California alone is the 6th largest economy in the world... someone correct me if I heard that wrong. its a really bleak picture, but the fight must go on. just get what you can and spend your money wisely. |
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peter
6401 Posts |
Posted - 07/02/2009 : 1:52:25 PM
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Galvin, many of my Los Angeles customers have gone to Riverside County small
towns for retirement. In a way, it is a blessing for the empty nesters as
the housing cost after retirement is now in line with their pension and
social security income. For a couple earning $40,000 worth of social security,
interest income, and some pension, they don't have to move to Nevada or Arizona
anymore. They can make do with a new home in Riverside County with a monthly
payment of less than $1,000 a month or only 35% of their income. They can
enjoy rural living and don't need to work while if they stayed on in Los Angeles
ares they would have to break their backs working under pressure for big
corporations that could deprive the quality of life in their golden years.
Also, many "foreclosure bailout" homeowners in Los Angeles do have their
family members buy Riverside homes for them in the cheap, i.e. $100-120K price
ranges, with the down payment coming from the months when they defaulted paying
their lenders while collecting cash rents from boarders. Much of the 3.5% down
allowed as gifts do come from such sources of fund.
I think there should be promotions from local board of realtors in these rural
nice towns of Riverside to induce the urbanite Angelanos who are stuck with
expensive mortgages and high rents in urban, and unurbane Los Angeles. This could
be a free bus tour (airconditioned of course) to pick up seniors and non-seniors
from Los Angeles's high-crime and high-housing costs districts and bring them to
see the nice small towns in Riverside County. The local casinos should be on
the free bus tour agenda with free meals served in exchange for half a day of fun
in the casinos, and the rest will be taken over by the local realtors who participate
in this program of the local board. They will appreciate the opportunity of
low-cost living and retirement lifestyle that can make ends meet.
I certainly will be on the bus as I want the loan business rrom them.
Peter |
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khoiey
2925 Posts |
Posted - 07/02/2009 : 1:57:41 PM
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| It doesn't really matter much once Obama pass that law that doesn't allow ysp. |
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peter
6401 Posts |
Posted - 07/02/2009 : 2:13:23 PM
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Frank, you speak the truth! And truth hurts.
However, like dying patients, we cannot allow the preoccupation with
death to overcome us as it will become real by end of 2009 or even in
2010. I see the survival chance in doing purchase loans for FTHBs
looing for low-priced homes from $80,000 to $300,000 and the demand in
this category is strong, even in California where values are still plummeting.
I see the crisis of rising unemployment and increang foreclosures will keep
the Fed's interest rate policy being low and the bond market as the preferred
choice by institutional investors. As a result, we will see rates between
4.00 to 4.50% pretty soon and with the anticipated overequity 125% refinance
being planned, we all should be able to make a living alrright till end of
the year if not prospering. The key is to downsize and reduced the fixed
costs of operating a broker shop that can survive if you only fund 1-2 loans
per month.
It's time to think small and be pragmatic. The Perfect Storm is yet to come
for all of us.
Peter |
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broker3271
417 Posts |
Posted - 07/02/2009 : 2:19:56 PM
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| Two Words...reverse mortgage |
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benjamin
6856 Posts |
Posted - 07/02/2009 : 3:29:59 PM
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Employment will worsen,, manufacturing jobs will continue to leave this country. Values will continue to drop.
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peter
6401 Posts |
Posted - 07/02/2009 : 5:35:50 PM
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Benjamin wrote:
"Employment will worsen,, manufacturing jobs will continue to leave this country. Values will continue to drop."
Then, what is the basis of Obama's confidence that the economy will recover
even in the short-term (per Yahoo News today)? What does he sees that we all
do not see?
Peter
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VVance
6500 Posts |
Posted - 07/02/2009 : 5:55:49 PM
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quote:
Originally posted by broker3271
Two Words...reverse mortgage
Two words in response....what equity? |
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velecico
5247 Posts |
Posted - 07/02/2009 : 7:00:48 PM
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quote:
Originally posted by broker3271
Two Words...reverse mortgage
Two Words ..... No Equity |
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broker3271
417 Posts |
Posted - 07/03/2009 : 09:34:57 AM
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| Dennis Kneale says that we're already out of a recession... |
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benjamin
6856 Posts |
Posted - 07/03/2009 : 11:59:42 AM
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Obama hangs with millionaires and the elite. How could he possibly have any idea that there is a problem?
This is going to last for a few more years. With any luck, it will level out. |
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