Who is Althouse? * View only LAW posts * Contribute * Use my Amazon Portal
I Hope we have some Change left.This is the worst part of the Obama economy - people trapped in their houses, unable to relocate to better job markets without taking serious losses.
We want them to fall. Unfortunately rather than get this overwith quickly, Team Obama has been trying to slow the fall. But a slow fall means you can't have a recovery until they hit bottom. That is the point, lower home prices allow new investors to move in and prices will start coming up again. People are trapped for years by the ways things are going.
Did I mention that Bin Laden is dead?
Homes are more affordable. Such a tragedy.
"Homes are more affordable."I suppose they would be, if people had any money.Although I suspect you don't really know what "affordable" means.
It would be better if the prices were rising?
For example, the 20% of folks who are unemployed can't afford a house, even if the price is half of what it was 5 years ago.
It would be better if the prices were rising?No, Joan, it would be better if people had jobs.
Houses are coming down to pre-bubble valuations. They aren't more affordable than they were in the 1990s, and fewer people are employed.
I know people who have not been able to afford a homes for years while wanting one badly, now they can finally afford one, even though they now make less money. Housing has dropped much more than earning ability, and that's good for all except those who want to sell a house. I happen to want to sell, so it's bad for me, but I'm happy for those who benefit from my misfortune at the moment. Such is economics - always winners and losers.
Fen, you're only trapped in your house until the sheriff shows up and tells you to leave.
No, Joan, it would be better if people had jobs.Not to worry! Gov. Walker promised 250,000 new jobs!I don't think the value on my house has dropped yet, but it's certainly peaked. It'll be interesting to see what Madison does tax-wise when prices do fall. Somehow I don't think 'tax the property less' is going to be an option.
I'm moving, and hope to have my house on the market within the week. PLEASE DON'T TELL ME THESE THINGS!!!
The issue is that nobody (fewer) wants to buy a house while the prices keep dropping. Same with sellers. dropping prices at some level discourage any current activity in the market for different reasonesif the market hit bottom, the dynamic would change. The problem is that the administration has been trying to delay the end of the slump
"but I'm happy for those who benefit from my misfortune at the moment."I get your point, and apologize for snarking.Home prices were nonsensical for 10 years, and are now nearing historical values.But there are only a small number of people for whom this results in 'affordability', accounting for the housing market doldrums and exodus of many realtors.Until real job growth, house purchases will be a distant dream.
You could be like me, who bought his house the year before home prices started falling.
Joan said... Homes are more affordable. Such a tragedy.Er, with 9% unemployment, $4/gallon gasoline, and 10% inflation, there isn't too much use for "affordable homes"
Maybe someone here can answer something that's been bugging me on this subject.Are there any potential downsides to putting your house up for sale? We're probably not going to be looking until next year, but if someone offered what we'd want (who knows, right?), we would be willing to dive into the buyers market asap.That being said, I almost wish I had my original downpayment back and were living in an apartment right now. Definitely a buyers market as long as you don't have a unass another property.
It's a wash for moving - you sell cheap and then buy cheap. Essentially you're just swapping the house you live in for another one.There are paperwork problems though if you're underwater on your mortgage, namely the mortgage holder won't let you be underwater on your next mortgage so you'll have to come up with cash.Logically you just want the same mortgage holder to let you swap the underwater house that the mortgage is on for another one of equal value.
It is a great time to buy a house if you can, 1) afford it, 2) get a loan, 3) have solid sense of your job security.No plans to sell my house right now so the decline in value at this time is on paper.There is very strong interest in the foreclosures in my neighborhood. The regularly priced houses, not so much. Americans still carry too much debt (both good and bad) in the housing market and that market won't move until that debt is accounted for--either by foreclosure, refinancing, paying down or selling at a loss.If you always thought of your house as a place to live you are probably fine, if you thought of it as a wealth machine, you are probably screwed.
I always thought of it as a money pit, a giant gaping maw that requires repeated doses of cash to stay alive.
Under Globalization, race to the lowest cost global labor source the suicidal "Free Trade" policies - we have gutted America of middle class jobs. And the people outside the Top 1% have less disposable dollars than ten years ago.Corporatist Republicans like this because their people benefit the most from big taxcuts. Democrats like this state of affairs because the only good, secure jobs left for the middle class are union, government, and healthcare jobs. Housing prices are just a function of the Hollowing out of the American economy.The Elites didn't care if small town America was destroyed and then the industrial cities and their suburbs were trashed as long as some premium locales like Big Sur, the DC Beltway, SF, Miami, Manhattan boomed.Now even the Elites homes are dropping in value..Save around our Imperial City. 9 of15 of America's wealthiest counties are those adjacent to DC.
Well there's a lot of regional variation. Here in Phx I believe we've been at the bottom for some time. Sales are good as new buyers and investors buy the lower priced homes. The countervailing force is the slow foreclosure wave of those who've been behind for a while, are locked in their home and ultimately give the home back to the bank.The housing market collapse is one of the few instances of the baby boomers giving back to the Millenials. It was our money and the way it drove up the housing market that has now given so many new young homebuyers nice, new and CHEAP homes to buy.(PS and Canadians love our market.)
"Hi, I'm from the Federal government and we're here to help."The housing bubble and crash were almost 100% Federal government induced. The government is also a main culprit in the extension of the downturn.Bubble inducers: Fannie Mae, Freddie Mac, so called anti-red lining programs, "Friends" of Countrywide in Congress, the entire misbegotten drive to have Home ownership (rather than saving) be a primary goal for people at the financial margins.Crash extenders: Mortgage reset programs, home buyer tax credits, overreaction in regulation that has appraisers and underwriters terrified of jail time if they screw up (this is a BIG problem), banking industry subsidies in form low discount rates discouraging lending, etc.Just about everything the Federal government could do wrong in housing and housing finance has been done wrong.So won't they do a lovely job with the health care system?
Joe Biden promised 600,000 new jobs a month. We just need to be patient.
The Obama admin has failed to devise a sensible way to re-jigger how mortgages are financed. I thought maybe ten year balloons [with 30 year amort schedules] by local lenders could be one solution to get local banks back into the mortgage business. But so far, the Obama admin just uses the old flawed playbook of Fwannie & Fweddie.
If you open up your economy to global access and say, let the most efficient and lowest cost workers compete for any jobs that economy provides - you outsource much of the jobs. Money made overseas on your economy stays there.Investment and growth dry up.Housing loses value.Your currency loses value.Your military and government social services eventually must decay as well because no good jobs means no broad taxpayer base.The Ruling Elites in both parties understood this was a risk...but decided to sacrifice long-term American prosperity for short-term gain.Tax cuts for the rich.Open Borders to flood America with cheap skilled, semi-skilled workers and destroy job markets for higher skilled jobs in high demand with H1-B Visas to hold down wages (IT, nurses, etc).Slather on more "free social services stuff".Grow government jobs to create new constituencies. Now many Ruling Elites are eyeing those "great, even more affordable places!!" Joan extolls in safer refuge places like Idaho, Montana, Hawaii, Oregon, N Carolina..THings get real bad, you don't want to be an Elite in Manhattan or LA with no safer place to retreat to. Rep Elites like Idaho, Wyoming..Dem Elites are partial to their "2nd homes" in Montana, Oregon, "The Big Island".
Last month, housing sales were .7% below what they were at the lowest point after the '08 crash. 13% of all homes are unoccupied, up 2 points from the month before.You'll start hearing the phrase, "Canary in the mine", a lot more.Welcome to the Food Stamp Recovery, as it's been called.Not to mention the second dip in the "recession".
Scott M. "Are there any potential downsides to putting your house up for sale?"It depends.Many sellers don't get the house properly fixed up for sale and then reprice it. You have to look at the house like a buyer would--what does the buyer see that he/she won't like or will have to spend money to fix. It's amazing that sellers fail to present their houses in the best light.An even worse mistake is to overprice the house. The broker who suggests the highest listing price is not usually your friend. Houses can sell quickly, even in this market, if they show well and are priced right. If not, they begin to stink very quickly.
ingsaJoan, as long as it is cheaper to rent than buy few people will invest in a wasting asset. There is a big oversupply of homes on market. Price needs to drop more.WV: ingsack dylexia of sacking
Let's have them fall a bit more. Once prices come in line with reality people will want to buy houses again. Until then they are overpriced vehicles that only a select few will want to pay money for. I say this as someone looking to buy a house. Even now though, in NY at any rate, they're just too expensive. If I buy a house, and prices continue to drop I'll run into the same problem as everyone else, namely I'm paying more than the house is ultimately worth and maybe I should then go into default? THe problem is so long as the market was gang busters you could justify paying more for a house, beause as an investment you would make more money when you sold it (since prices woudl keep rising).NOw though, houses are a money pit and in fact it makes more sense to rent.So lets have some serious price drops. And get rid of the laws that are keeping people in houses they can't afford. It's only propping up the artificial prices on housing that need to come down.
The idea that the economy is improving is completely bogus.
My mother-in-law is just now putting her house up for sale. It'll be interesting to see how things go with it. It's a noteworthy house in the small town she lives in -- everyone knows about of it. Yet I don't think the economy in the town is booming. You could commute from there to Madison -- Hwy 12 is a nice four lanes (I sometimes drive on the leftover remnants of Hwy 12 at the top of Springfield Hill and am *amazed* at how narrow it used to be!)She was reluctant to take the final step, but her kids advised her to at least list it, so that Agents could come through and point out things that need to be fixed. So the whole family is in fix-up-the-house mode now.BTW -- re: her leaving the Catholic Church. The final final final straw was a sermon on the evil-ness of -- wait for it -- adoption. That's what the priest thought to inveigh against.
Tax cuts for the rich.Are you people ever going to stop with this trope?"The rich" are the only people paying income taxes in America.The "Bush Tax Cuts" removed income tax liability from millions of tax payers. I'd say they benefitted the most.
Ditto, It depends"Losers" in my neighborhood are a couple who inherited a home and wanted to cash-out, a young couple who hated the neighborhood (too old, too conservative and too hot) and bolted for Oregon and a couple who didn't want to wait to relocate near kids/grandkids. Other people with attractive property have sold quickly within 10-15 percent of the top.When I'm in DC, I'm astounded by building/development activity. Total disconnect with most of the country. Not a good sign.
The economy is not important - only the foreign policy is important. Vote for Hussein.
There is still new construction happening in DC ? There is little if any to be seen in the Phila MSA.
The housing bubble and crash were almost 100% Federal government induced. The government is also a main culprit in the extension of the downturn.Correct. The longer the government meddles, the worse the situation will be.As painful as it is and will be for many people, the government needs to let the housing market do its natural melt down. Many people will lose their homes because they are "upside down" on their mortgages and cannot refinance to get lower payments. Others will take serious losses when they do sell if they are moving to get jobs. Once the market reaches bottom, it will be a boon for new home buyers and younger people just starting out. And for investment opportunities.Many of my former clients (when I was not retired from my financial advisory business) made moves OUT of fixed income investments (bonds) and into real estate into selected upper end residential markets. The return on their portfolios was increased by this move. In addition we got out of the fixed income investments that were paying lower coupon rates that are guaranteed !! to go down in value when interest rates inevitably rise. It was a good move on their part. It was too bad for those who bought or built at the top of the market......but.....those are the risks.For someone like myself, who doesn't plan to sell my home for a very long time and whose mortage is well within good loan to value margins, I don't care how much my home falls in value.
In addition, owning real estate as an investment gives income tax benefits that you don't get from other more traditional income investments.There is of course risks in owning investement real estate, but there are risks in every investment strategy.
The Missus and I sold a house in suburban Atlanta in 2007 for a record price (for that development). Only in retrospect did we appreciate that the Case Shiller index for Atlanta (metro) had peaked about a year before we sold. Moved to Florida, but could see the collapse then in progress and deliberately didn't buy immediately. We have been leasing a home which we knew would have to be short sold or go through foreclosure. It has been in Florida's glacial foreclosure process and in, and then out of, the owner's Chapter 11 case in the meantime. The home was new construction when purchased by an out of state investor (someone who drank the "I can make you a millionaire in real estate!" kool-aid) for north of $700K in 2007. We will be closing on it in the next month for less than $300K. As Telly Savalas used to say about the Gold Club - "It's bonus time, baby!"
Ownership is overrated, control is everything. You actually only "own" your home en fief. If the home is valued at $100,000 and you do not pay your local "property taxes", the Government will take your home and sell it to recover the taxes. Note that you do NOT receive the difference between the "value" of your home and the price the government sold it for, so, you do NOT own your home. You live under the Feudal System in reality, even though most deny it. Here is an interesting thought, Wisconsin has a Constitutional restriction on government borrowing that is triggered by property values... want to bet it is being violated or ignored? 2) No county, city, town, village, school district, sewerage district or other municipal corporation may become indebted in an amount that exceeds an allowable percentage of the taxable property located therein equalized for state purposes as provided by the legislature. In all cases the allowable percentage shall be 5 percent except as specified in pars. (a) and (b):Read more: http://vlex.com/vid/municipal-home-rule-debt-limit-pay-319929#ixzz1Ls6L9URA
jr565 said...Let's have them fall a bit more. Once prices come in line with reality people will want to buy houses again.Nugatory, JR.Price, while important, is the smallest part of the current problem. The main issues are (1) buyer fear of job loss and consequent financial disaster (2) a lending regulatory environment that discourages lenders from taking any risk whatsoever.The glacial, government induced pace of foreclosure is also a major issue. Why buy a house for $300 k if one very similar will be available at foreclosure sometime soon at $200 k?
"Wisconsin has a Constitutional restriction on government borrowing that is triggered by property values... want to bet it is being violated or ignored? "It's very much not ignored, actually.But the problem is the definition of "debt." Shadow debt like underfunded pension cost is not taken into account.
Pogo has it. The housing market will continue to fall. When a real recovery starts and people get jobs again, and inflated prices have fallen enough, things will return to normal.In addition to houses falling in value we had a credit squeeze you know. People buying now face a much steeper climb from a credit perspective than we did when we bought our house 6 years ago. The problem is no jobs, no recovery. EVERYTHING, the deficit, inflation, the debt, housing, would work itself out with a decent recovery that had some jobs (other than McDonald's).Until we get people back to work we're screwed. The Clintons understand this, but OLoser does not. I thought Hilly would help TheZero dodge this sort of thing but now I think they're deliberately sabotaging the guy.
when I was not retired from my financial advisory business)I hadn't realized you had retired. Enjoy your new life!
MadisonMan saidNot to worry! Gov. Walker promised 250,000 new jobs!This is so easy. All Walker need do is use Zerobama statistics. To wit, any job not lost can be counted as a new job if desired. As long as there are at least 250000 existing jobs in WI, Walker's good.
Er, with 9% unemployment, $4/gallon gasoline, and 10% inflation, there isn't too much use for "affordable homes"Good thing the GOP is focused like a laser on.....abortion bills, defunding Planned Parenthood, voter ID laws, and concealed carry.
Garage reaches for the last refuge of Libtards, the tu quoque fallacy.
"I don't think the value on my house has dropped yet, but it's certainly peaked."Yeah? Try and sell it and see what happens. We just spent a year selling a Madison home. Small but very well maintained, good location. We got way under the tax assessment and the initial price suggested by the realator. We're not complaining one bit, it was time to sell it and were not emotionally wedded to some theoretical value. But I think you may be kidding yourself if you think your home hasn't declined in "value". Of course, if you have no reason to sell, it matters not a wit.
Garage made it out of the bar! I was worried about you, man.
I made it out alive! Actually had a pretty good time. First dude I talked to , the guitar player, knew who Garaj Mahal was. I was impressed
Good thing the GOP is focused like a laser on.....abortion bills, defunding Planned Parenthood, voter ID laws, and concealed carry.Good thing then that the Dems are focused on DADT, mileage taxes, gay marriage, union bailouts, and Oblahblah's re-election campaign
"Good thing the GOP is focused like a laser on.....abortion bills, defunding Planned Parenthood, voter ID laws, and concealed carry."Goverments don't create jobs. 'Nuff said.
There are still lots of REO properties out there that the banks are sitting on and have not exposed to the market. As the gubmint has tried to soften the fall it has extended the length of the recession.As C4 stated above, the market is booming in DC.( 7 of the top 10 counties in median income abut DC) not only residential but retail, hotel-motel, office, and every other commercial category except industrial. The money drained from the heartland flows to the Beltway.
Inflation is up. Unemployment is up. Housing values down. Libya is a mess, Syria is a farce (or maybe that is in reverse), the debt is HURE (and growing). Yes how is that hope and change thing working out for ya?
So only big government can do anything unemploment and housing values, and gas prices? What about the free markets?
"What about the free markets?"Have you ever seen one?
Just sold my (appraised in 2005) $600K house to my ex-wife for slightly more than half that price (of my half). I thought she got a great deal until I figured in obscene Cook County property taxes.
Scott M said:--Are there any potential downsides to putting your house up for sale? We're probably not going to be looking until next year, but if someone offered what we'd want (who knows, right?), we would be willing to dive into the buyers market asap.Selling a home is an enormous amount of work, and unless it's a hotter-than-heck market, it's painful.The amount of work needed to get your home into the best possible shape rather than the shape you can live with is enormous and time consuming. If you have kids, it's even more difficult. People want their potential homes to look like homes on HGTV, with perfect pottery barn colors and furniture, immaculately cleaned, etc. The things you will need to do include: repainting every room of your house, including the ceilings; refinishing the floors or replacing the carpets; gutters cleaned; replacing light fixtures; fixing all of the landscaping outside, including any broken stonework or concrete, as well as making your garden and lawn look terrific; if you've made any very-custom remodeling choices (removed closets to install desks, built in shelves where people normally want hanging storage, etc.) you'll need to undo it. You'll need it staged, and that will mean buying new drapes, bath maths, linens, who knows what. You'll need to declutter and rent a dumpster for trash and probably rent a storage space for all of your furniture that the stager and realtor want out during showings. And this is assuming your kitchen and bath are up to date in style already.Then, you'll need to keep it in pristine condition on no notice for as long as you want to sell. If you both work out of the home and have no kids, this may be doable. If that's not your lifestyle, this may be extremely trying. You'll be eating out a lot during this time, so factor that into your budget too.You'll need to get the place inspected, and then you'll find that everyone on the way knows you're trying to sell and will find things that need "fixing" in order for you to move forward. Expect the chimney sweep to take you for a ride, and the heater guy, and the landscaper who tells you the grade of your land isn't good enough and seepage will occur. and all of this will make you wonder what in the world you were thinking when you decided to sell.
Post a Comment