- Thread starter bassmonkey
- Start date
Fraxture
Well-known member
Yeah my house value has gone up, and that Barn we have on the land I was going to tear down has really helped it. 
This fall half of it is being transformed into a studio.
This fall half of it is being transformed into a studio.
bassmonkey
Well-known member
I actually blame greed and apathy more than the economy in general.
Greed on the part of certain unscrupulous mortgage brokers who approved homebuyers for loans they could never afford (especially adjustable-rate mortgages that were perhaps 'affordable' in the early years of the loan). Greed on the part of certain real estate brokers and agents who like to get their noses in many aspects of the transaction which are none of their business, yet turn a blind eye to people buying houses they'll never afford long-term. Greed on the part of certain companies in my own industry (title and closing), because most of them are owned by real estate brokers by way of 'joint ventures' and are probably illegal under RESPA. Greed on the part of certain buyers who are in business of flipping (buying a house and immediately selling it for a profit), many of whom are crying now because they got caught holding a property that they can't sell for a profit or even what they paid.
Apathy on the part of the American home buyers, who steadfastly refuse to educate themselves on the many aspects of home buying, even though it's the largest purchase they're likely to make. You can bet they'll research televisions, cell phones, mp3 players.. but not appraisal fees, broker fees, title companies, prevailing interest rates.
Pardon the rant, but I've been in this business for 18 years now and the last 5 years have probably been the ugliest in terms of any signs of ethics in the various parts of the industry. Certainly there are good and respectable folks performing all of the functions that I mentioned above, and hopefully they'll be the ones left standing when the market corrects itself and many snake-oil salesmen are ejected from the industry.
Meanwhile, would-be homeowners need to do their homework to avoid becoming a foreclosure statistic, or being saddled long-term with a mortgage that is too much of a financial burden.
Wow.. did I really just type all of that?
Doesn't sound that healthy to me, actually? The term 'house of cards' comes to mind.
How about negative amortisation mortgages?
How will the latest news from Bear Sterns impact the market?
bovinehost
Administrator
Apparently, you did, and it was a thing of beauty.
I enjoy the vast range of expertise we have here.
bassmonkey
Well-known member
ARMs, per se, aren't a bad thing. What is bad, however, is someone taking one out at a low rate without factoring in how much payments rise when the rate increases.
SteveB
Well-known member
Actually, the market is quite healthy in spite of itself. The threat of Congress passing RESPA (real estate settlement procedures act) reform has done wonders for industry self-regulation and some self-inflicted reform.
Negative amortization mortgages -- this is when the monthly payment isn't even enough to cover the interest alone, therefore the amount owed actually increases every month even though the payment is made on time. This type of situation blows my mind. There's a prevailing line of thought in the US which says "buy as much house as you can afford". This is only good for lenders, brokers, and commissioned real estate agents. The idea of NegAm is to make the payment more affordable. Obviously, you're building no equity so the best you can do is hope that when you eventually sell, the house will be worth enough to cover the accumulated amount owed. This might sometimes work as a short-term means of avoiding foreclosure.. as long as you can get your income back to a level where you can refinance under better terms before you go broke.
As for Bear Stearns, few in the real estate industry pay much heed to Wall Street analysts. Maybe lenders who sell their loan pools to Wall Street to create mortgage-backed securities, but that's only a portion of the overall market.
We've got so much real estate here in the USA that even our messed up industry and economy can't bring it to a grinding halt. The great thing about land is that they're not making any more of it.
SteveB
Well-known member
ARMs are fine if you follow through with your original thinking, which is that you will sell the house (or refinance) before the 'good' rate expires. However, if you fail to do just that you can end up in financial trouble if rates have gone up significantly since you 'locked'.
Believe me, you almost always end up in a house longer than you originally planned. I bought my former house thinking I'd be there for 5 to 7 years. Twelve years later I finally moved! Thank goodness I didn't have an ARM.. although rates were kind of high when I initially bought so I might have been okay. (No, I never refinanced that place because I kept thinking I'd move before recouping the costs.)
Musicman Nut
Well-known member
Housing Market
This is a great time to buy if your gonna buy, Loans for A Paper are still good, B Paper not so hot.
Soft Market, it'll take a good year or more before we see the light.
This is a great time to buy if your gonna buy, Loans for A Paper are still good, B Paper not so hot.
Soft Market, it'll take a good year or more before we see the light.
Supanamu
Well-known member
Steve, your whole post was excellent and summed up the entire situation aptly.
But as for this right here:
It's absolutely true that most home owners don't even come close to learning
what they need to know about buying a home, but consider the sheer enormity
of information a potential home owner needs to know and then factor in the
average person's inability to focus on ream after ream of fine print and legal
mumbo jumbo and you've got a recipe for disaster.
The real estate industry probably thinks they've "dumbed down" the contracts,
info sheets and legalese enough that the average person can understand it, but it's
not true. It's like a mechanic who is describing a complex mechanical issue in
terms the customer can understand - the customer says "oh yeah, I get it" but
he really doesn't get it at all. He just wants to buy a house!
When it came time for my girl and I to buy, we went overboard...we read
EVERYTHING and anything we could about buying a house and even so, we
understood maybe 20 percent of it. The difference between us and most people is
that we found someone to really explain it all for us whereas most people would
just give up and sign on the dotted line, having no clear idea of what they were
getting into.
But as for this right here:
It's absolutely true that most home owners don't even come close to learning
what they need to know about buying a home, but consider the sheer enormity
of information a potential home owner needs to know and then factor in the
average person's inability to focus on ream after ream of fine print and legal
mumbo jumbo and you've got a recipe for disaster.
The real estate industry probably thinks they've "dumbed down" the contracts,
info sheets and legalese enough that the average person can understand it, but it's
not true. It's like a mechanic who is describing a complex mechanical issue in
terms the customer can understand - the customer says "oh yeah, I get it" but
he really doesn't get it at all. He just wants to buy a house!
When it came time for my girl and I to buy, we went overboard...we read
EVERYTHING and anything we could about buying a house and even so, we
understood maybe 20 percent of it. The difference between us and most people is
that we found someone to really explain it all for us whereas most people would
just give up and sign on the dotted line, having no clear idea of what they were
getting into.
Last edited:
SquidLizard
Well-known member
- Joined
- Oct 4, 2006
- Messages
- 237
There has been a market correction where I am, in Sonoma County north of San Francisco. I'd say it's been as much as 20-25% in some cases. At the same time, things had been running up so fast that it was getting ridiculous. We're still a very long way from having much affordable housing here.
That run-up also contributed to the greed fueling the ARM, interest only, and reverse amortization mortgages. Why not buy a house you can't really afford when things are going up several percent a month? Whoops -- because the party inevitably ends, that's why!
I'd say my house is now worth a little over 2.5x what I paid for it in 1998. It was worth well over 3x what I paid before the market correction. I believe things will be flat for a while, perhaps a year or even two. But it's inevitable that prices will slowly go back up as the population increases and pushes north to get to more affordable housing. And as this area continues to grow.
This country is large enough and diverse enough that you would need to be knowlegeable about an area before you understood its real estate values. This would include economic and population trends as well as how property values (both commercial and residential) have fluctuated over time. You also have to look at the history of a market over quite a few years to get a good picture of what's going on, IMO.
Real estate has gone through a "correction" in parts of the U.S. Other areas are booming. Anyone who says that the bottom is falling out may have been caught "upside down" with their own home loan. In that case it would definitely feel like the bottom had fallen out. But saying that as a fact, about the whole U.S., shows profound ignorance of the housing markets in this country.
That run-up also contributed to the greed fueling the ARM, interest only, and reverse amortization mortgages. Why not buy a house you can't really afford when things are going up several percent a month? Whoops -- because the party inevitably ends, that's why!
I'd say my house is now worth a little over 2.5x what I paid for it in 1998. It was worth well over 3x what I paid before the market correction. I believe things will be flat for a while, perhaps a year or even two. But it's inevitable that prices will slowly go back up as the population increases and pushes north to get to more affordable housing. And as this area continues to grow.
This country is large enough and diverse enough that you would need to be knowlegeable about an area before you understood its real estate values. This would include economic and population trends as well as how property values (both commercial and residential) have fluctuated over time. You also have to look at the history of a market over quite a few years to get a good picture of what's going on, IMO.
Real estate has gone through a "correction" in parts of the U.S. Other areas are booming. Anyone who says that the bottom is falling out may have been caught "upside down" with their own home loan. In that case it would definitely feel like the bottom had fallen out. But saying that as a fact, about the whole U.S., shows profound ignorance of the housing markets in this country.
thunder
Well-known member
in new york, condos are one bed room, is sell on averege $250,000 to $300,000 (they went up) You can buy a brownstone building in bed-sty. for $450,000 thru $600,000. an area where your dodging bullets. or the same building in the "posh" brooklyn heights for $2.5 thru $3.5. but no gangs, bullets and your drugs get delivered to your home. all five bourghs are up 15% from last year. rents, one bedroom averege 1200 for studios. (i might need another wife. so, she can bring in another income.) Ain't nutin going down here!!!!!!
SteveB
Well-known member
I agree with your point 100%. When I bought my first house in 1994, the sales agreement was 3 pages long. I bought a different house in 2006, and the sales agreement was 21 pages long... mostly filled with new contingencies and disclosures which were somehow common sense during the first 230 years of this country's existence. *Sigh.*
GreyDad
Well-known member
When we sold our house in the UK in 2003 the contract was one page long and basically said:
<seller name & address>
<buyer name & address>
"The buyer agrees to buy and the seller agrees to sell the above property for the following price:"
<selling price>
Seller signature:
Buyer Signature:
When we bought our house in the US the same year the contract was about 1/2in thick and it took me and the wife about 30 minutes just to sign it and initial all the pages, with 2 lawyers present...
...but then that was New Jersey
<seller name & address>
<buyer name & address>
"The buyer agrees to buy and the seller agrees to sell the above property for the following price:"
<selling price>
Seller signature:
Buyer Signature:
When we bought our house in the US the same year the contract was about 1/2in thick and it took me and the wife about 30 minutes just to sign it and initial all the pages, with 2 lawyers present...
...but then that was New Jersey
jamesattard
Well-known member
After reading and seeing all the house prices in this thread I am wondering what the average salary in the US is. :O
^ ahahaha, nothing when you convert it into UK pounds
Good god the exchange rate was 2USD:1GBP the other day, actually it was $2.04->1GBP! I don't know what you wankers are doing, but you'd better buy up US stuff right now! This won't last long... hopefully...
Good god the exchange rate was 2USD:1GBP the other day, actually it was $2.04->1GBP! I don't know what you wankers are doing, but you'd better buy up US stuff right now!
This won't last long... hopefully...
robobass13
Well-known member
we bought our 3 bedroom 2 bath house 11 years ago for 78k, It's now been appraised at 247k and that was just a couple of months ago. granted when we bought the house It was a HUD and it needed about 10k in work, buy at the time it was only 9 years old and real market value was about 95k. we have seen friends of ours who bought houses a couple of years ago that have taken a hit on the value of there homes from what the purchase price was, but not as bad as so.cal areas.
GreyDad
Well-known member
^ ahahaha, nothing when you convert it into UK pounds
Good god the exchange rate was 2USD:1GBP the other day, actually it was $2.04->1GBP! I don't know what you wankers are doing, but you'd better buy up US stuff right now!
Hint taken, madam, and the challenge fearlessly accepted: it is our duty as British citizens to buy as many Balls as possible in order to rescue the economy of our American cousins
Tim O'Sullivan
Well-known member
^ ahahaha, nothing when you convert it into UK pounds
Good god the exchange rate was 2USD:1GBP the other day, actually it was $2.04->1GBP! I don't know what you wankers are doing, but you'd better buy up US stuff right now!
Wow! I didnt realise that was the current rate! I am off to the USA real soon, so I will take advantage!
thunder
Well-known member
in new york it takes two incomes to survive.
savannah_sean
Well-known member
I agree with your point 100%. When I bought my first house in 1994, the sales agreement was 3 pages long. I bought a different house in 2006, and the sales agreement was 21 pages long... mostly filled with new contingencies and disclosures which were somehow common sense during the first 230 years of this country's existence. *Sigh.*
hi- I just bought my first house last October; I really tried hard to learn as much as I could and understand everything, but it was quite overwhelming- I learned enough to get a loan that was right for me but I'm sure I could have done better if I had been able to treat the whole endeavor as a full-time job...
It was a buyer's market a year ago here in Georgia, and it seems to be even more so now, but I think property values are holding steady or appreciating slightly; at least they aren't plummeting.
