"We're not at the bottom," he says. "[People] want it to be near the bottom, but we're not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There's still supply out there in abundance … This thing is going to get worse before it gets better." ... Lereah says now. "But I didn't think this would turn into an all-out bursting of a balloon for the whole nation." He, like other prognosticators (including Greenspan), points to his lack of understanding of the profound effects that subprime lending was having on housing markets. "[I] just didn't realize the scope, the extent, the magnitude of the loose underwriting—not looking at incomes and wages, just providing so many mortgage loans based on [expected] future price appreciation rather than the creditworthiness of the borrower," Lereah says. "That got so out of hand, and none of us realized the magnitude of it until it was too late."
Amazing considering his quotes during the boom degrading those who saw exactly what he didn't see coming.
However what is nice, and as you can see from the board from our posters their houses have sold recently after months on the market, and sales are picking up. Things are getting back in the black..TYJ
What else is nice is how fast prices are dropping, it means the bust will be over that much sooner. 2 or 3 more years and we should be bottoming out and probably stay there for another couple years.
Fannie Mae CEO today said today he sees home prices "returning to the trend line" (that would be dropping a lot) over the next 2 years.
I certainly think it takes a very brave buyer to close their eyes to all data and buy a home in the bubble markets right now.
Lereah says that the industry may begin to see a slight uptick in sales later this summer , which could signal the start of the recovery. Home prices, however, will continue to fall. According to the latest numbers from the Case-Shiller index, the average U.S. home has lost around 15 percent of its value since the market's peak. "We're probably going to end up with a 20 percent [decline], but if I'm wrong it will be even more than that," he says.
A growing number of market watchers are calling 2010-2011 recovery....at the earliest. If the economy continues to slide, that date has to be pushed back. But, the faster prices fall, the faster the market will recover.
A growing number of market watchers are calling 2010-2011 recovery....at the earliest. If the economy continues to slide, that date has to be pushed back. But, the faster prices fall, the faster the market will recover.
The faster the market falls, the more affordable houses will be, then more people will buy, then the market will recover. We'll see a good couple years of recovery, then prices will rise again, and fall again, and recover again, and fall ....ect you get the point. RE always goes full circle, it just takes time.
The faster the market falls, the more affordable houses will be, then more people will buy, then the market will recover. We'll see a good couple years of recovery, then prices will rise again, and fall again, and recover again, and fall ....ect you get the point. RE always goes full circle, it just takes time.
I completely agree. The issue is that the rise this time was unprecedented.. if matched (as I believe it will be) by a corresponding fall it certainly be quite an amazing thing. And it points to holding off on purchasing in bubble areas because supply and prices are still far too high.
I just got my property tax bill and have the opposite problem. It shot up $700 a month! So while I'm happy that values continue to rise here, there is a downside to everything.
Posts: 132 | Location: Ferndale, WA | Registered: Nov 09, 2007
Originally posted by mseadog23: I just got my property tax bill and have the opposite problem. It shot up $700 a month! So while I'm happy that values continue to rise here, there is a downside to everything.
Having been a recent WA resident, I kinda know how the tax system works there.....you must have SOME house for the bill to go up $8,400/yr!
Homedude, According to the county assessor's office, I am paying about twice what I should right now because the assessments are only done every two years and about $350 of that is to pay for what it should have increased last year. I wasn't aware that they could get you for retroactive increases. And I don't know where in Washington you lived, but my parents house in a Seattle suburb - and this is one with bars on the windows that they paid $19,500 in the mid 60's and is 1100 sq. feet with one bathroom - is valued at nearly $500,000.
Posts: 132 | Location: Ferndale, WA | Registered: Nov 09, 2007
Clark County.....my house was assessed at $660k and my entire yearly tax bill was less than your increase ($8,400). If your increase was that much, your assessment has to be WELL over a million.
If memory serves, Ferndale is either in Whatcom or Snohomish and their rates were comparable to Clark.
The great thing about a recession is that if you're wealthy enough you can buy a heckuva lotta properties at pennies on the dollar. Well worth the modest effort to engineer one now and then....
Homedude, Yes my home is in Whatcom County and the value of the house has gone up almost three fold in 8 years. The current median here is about $100,000 over that of Clark County, which is currently $250,000. Whatcom's average price is $446,000. Thanks to magazines like Outside ranking it number one in recreation in the country and its large amount of waterfront property, it has become a huge destination for Seattle retirees with a lot of cash. Condos in Fairhaven are in the $800,000 range.
Posts: 132 | Location: Ferndale, WA | Registered: Nov 09, 2007
I don't understand how the market could get better. You think that after all the foreclosures, people that went through that aren't buying within the next 10 yrs. Home sales might fall some more, b/c these people are renting out homes that sellers were trying to sell, but decided to rent out. In FL I don't see how it couldn't be near rock bottom. I can buy a home right now for 130, brand new. Are they going to be free soon? Should I hold out? Also, lending is strict right now. The interest rates are jumping a tad. People can't afford to drive to work due to oil prices, let alone find 5% cash to put down on a house. Don't get me wrong, I hope it works itself out soon. I just don't see it happening. Unless there are a lot of Estates that get settled between now and 2012. The March Home sales fell. I am sure April's was the same. May maybe a different story-stimulas package(not that 600 bucks is enough to buy a home) Let's just ride this one out!
We're in month five of 2008 and we're suppose to believe that the whole $355B reset in the first quarter and the remainder of the year will be upswing? I don't think so. There will be aftermath as well. We have a ways to go.
It's all spin in an effort to manufacture something positive and it might work as long as no one looks at the numbers/data.
We're in month five of 2008 and we're suppose to believe that the whole $355B reset in the first quarter and the remainder of the year will be upswing?
Mine was due to reset 2/09 and I'm sure many will sell before the re-set, just like me. My re-set was 2.5% + annual LIBOR (2.5% - 2.75%?), not really that bad.
This message has been edited. Last edited by: berniek,
***It's not my job to sell a house to my buyer, it's my job to find the right house for my buyer.***
Posts: 2394 | Location: Colorado Springs, CO | Registered: Jan 18, 2003
Seems to be a pattern.....five of the markets are in FL. Imagine that?!? I thought I read somewhere on this message board that things are "getting better" in FL.
The reset issue is currently a non-issue because Bernanke is keeping rates artificially low which is keeping LIBOR down. He is buying time for people to refinance but can only do so for a short period of time. The issue will crop up again once rates return to normal. Having long term debt indexed to short term volatile rates (LIBOR is extremely volatile during times of stress as well) is a very very bad idea for the borrower, especially considering how low long term rates are. It is a sheer gamble that rates will remain at historic lows during time of possession of the home.
People may very well sell their way out of trouble but in states where values are falling so dramatically refinancing and selling aren't really an option unless the banks take a short sale.
(not that 600 bucks is enough to buy a home) 
