bassmonkey
Well-known member
Thought I'd resurrect this one. Sentiment here in the UK is shifting to the possibility of a correction. The major trigger for this has been the global credit crunch. What's happening stateside?
- Thread starter bassmonkey
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ImABassPlayer
Member
It's true. The bubble has burst, as they say. In my area there are four or five houses for sale on each street. Houses are on the market for a year or more before they sell. Yet people are still asking outrageously high prices for them. I live in a pretty affluent area where there are plenty of homes for $1,000,000 or more for sale (and no I can't afford any of them), mixed in are "normal" homes for $600,000-$800,000. It's not a good time to be a seller right now.
Big Poppa
Well-known member
it is a buyers market.....
bassmonkeee
Well-known member
If they can get a loan....
bassmonkey
Well-known member
Yep, credit crunch in action.
Antics on your side of the pond almost caused the 5th largest mortgage lender over here to go to the wall this week. Only drastic action by our central bank saved the day.
The other day I was on a walk in my country club and there was a 3 bed/2 bath 2000sq ft. house on a corner lot, pool, spa, landscaping the whole 9 yards, everything...
for $299,900. They had just dropped the price $85K. I just about crapped my pants right there on the spot. Two years ago when I was looking, such a house would go for no less than $430K. Trouble is, if you're in anything right now, you can't get out of it to take advantage. If anyone wants to buy property in California, NOW is the time to do it.
for $299,900. They had just dropped the price $85K. I just about crapped my pants right there on the spot. Two years ago when I was looking, such a house would go for no less than $430K. Trouble is, if you're in anything right now, you can't get out of it to take advantage. If anyone wants to buy property in California, NOW is the time to do it.
Big Poppa
Well-known member
Bassmonkey that comment is the wierdest one yet posted...that bank was not very good....how come the 6th didnt go under? whAT ABOUT THE 7TH
ITs really easy to blame Countrywide for other banks woes...
ITs really easy to blame Countrywide for other banks woes...
bassmonkey
Well-known member
Hey, BP, I'm not blaming Countrywide. I was referring to the subprime problem in the states(other countries say they don't have a subprime problem.......yeah, right!
), packaged up as bonds, rated AAA and then sold on as solid investment products. As the defaults started to gather pace the financial community got spooked, cos no-one knows if what they are holding is solid gold or toxic. Just because the bag has $1 billion written on it means jack, could be just $1000 dollars in the bag. Banks have stopped lending to one another, saving their money to pay for the defaults, no doubt. Northern Rock(the limey bank with the bad teeth) have a poor business model. Low saver deposits but they have an awful lot of mortgages on their books. They way they finance this is by short term borrowing. The time came to roll over a load of commercial paper, but liquidity had dried up and they were in a position were they could not meet their obligations. Other banks use this model too, but not to the extent that NR do/did.
Anyway, BP, you know all this, I just thought I should clarify what I meant.
SteveB
Well-known member
One of my competitors closed their doors last Friday. Nobody knew it was coming. The employees showed up for work, were taken into the conference room and told that the company was closing that very day. They were in business since 1974.
I'm not sure what the final straw was, but I heard that they did a lot of work for Countrywide and that was a contributing factor.
Shame though.. 100 people out of work. And this was one of the respectable companies in our industry.
I'm not sure what the final straw was, but I heard that they did a lot of work for Countrywide and that was a contributing factor.
Shame though.. 100 people out of work. And this was one of the respectable companies in our industry.
bassmonkey
Well-known member
muggsy
Well-known member
The Northern Virginia/DC real estate market has been in the midst of a long-overdue correction for the past 12-18 months. When my wife and I bought our house in Alexandria in early 2004, the market was crazy and had been that way for a while. My wife sold a condo in Old Town Alexandria back then that she had held for a little over a year (2 bedrooms, 650 square feet, great location). She listed it on a Friday and had 13 contracts, most over the asking price, by Monday. It was unusual for listings to stay on the market longer than a few weeks, and many were gone in a matter of days. We got lucky on our house because it needed some work, and it didn't show well because the prior owners had lived there for 25 years and apparently never thrown anything out.
Now those same houses are being listed and sitting for months. A big part of the problem is simply greed -- many homeowners remember what their house could have sold for a year or two ago, and they're not prepared to take less even though the market has changed. Agents can help if they offer realistic advice about asking prices, but many agents seem willing to list properties for whatever the owner wants to get, no matter how unrealistic it may be. It's undoubtedly tougher to get a mortgage now than it was a year ago, which adds to the problem. Houses that are fairly priced in good locations are still selling quickly, but it's a buyer's market here and it's likely to stay that way for a while.
It still ain't cheap, though.
Big Poppa
Well-known member
this is something we will discuss over a few pelligrinos....
Who didnt see this coming with the short term nature of the sub prime coupled with the rapid rise in interest rates......Greenspan looked the other way and now is blaming everyone. His focus was making sure that there wasnt inflation...I was more worried by deflation....but there you have it.
Also from only my california perspective the sub prime loans even when written a 110% of value were at five year old prices....those prices have at least doubled if not tripled...these people could sell there houses with a world record profit (even if much les than a year ago) The issue is the re fi's of phantom equity.
Who didnt see this coming with the short term nature of the sub prime coupled with the rapid rise in interest rates......Greenspan looked the other way and now is blaming everyone. His focus was making sure that there wasnt inflation...I was more worried by deflation....but there you have it.
Also from only my california perspective the sub prime loans even when written a 110% of value were at five year old prices....those prices have at least doubled if not tripled...these people could sell there houses with a world record profit (even if much les than a year ago) The issue is the re fi's of phantom equity.
bassmonkey
Well-known member
Big Poppa
Well-known member
WHY IT BROUGHT THE BEST OUT INYOU!
Beth it is all relative you take a losxs on your crib and murder the next guy
Beth it is all relative you take a losxs on your crib and murder the next guy
ernie1966
Well-known member
- Joined
- Dec 12, 2002
- Messages
- 1,271
Exactly. People are/were using the equity in their home as their own personal bank.
I have a differnet spin on the whole "owing a home" thing. Thinking of your house as an investment is okay, but you gotta realize that you will never see a dime of profit until you sell it. Until then, your home is an expense.
