Zillow Advice: Home Buying - House Prices Likely To Crash Through Fair Value

I hope you're wrong, Sunny, ...

Mon, 15 Jun 2009 17:32:00 GMT

I hope you're wrong, Sunny, although fear you may not be. This kind of misguided intervention would have terrible consequences if the current rate of default of recent vintage modified, FHA and prime fixed-rate mortgages to the most credit worthy borrowers are remotely accurate indicators.

Relaxing lending standards has more potential of exacerbating the problems with the housing market and overall economy than otherwise. I understand the current administration's urgency to right the ship, but this kind of public policy would suggest the powers that be have learned nothing from this crisis.

I think that is a good question ...

Sun, 14 Jun 2009 16:36:00 GMT

I think that is a good question that you asked cvoc about who will revive the market. I guess my feeling is that the banks who loaned to anyone that was breathing during the bubble boom will do it once again with a twist. Now the banks are picky, but it will not last. With an FHA loan, you only have to have 3.5% down and be only about two years out of bankruptcy to have a shot at a loan. The government has an interest in keeping CA and other hard hit states from sinking and they write the guidelines for FHA and also now pull the strings at Fannie and Freddie more directly since TARP went into effect. You are talking about reality with no intervention, but there is plenty of intervention to be done and still plenty of people who will buy if you give them half a chance without asking too many questions. CA is a popular state with a higher than average cost of living than many places. People will still retire from the upper northeast to Florida. No problem. One the requirement loosen and the banks miss their fees, the game will roll on with slightly different rules to better protect the banks this time.Â

Spac_AcerDid you see my question ...

Sun, 14 Jun 2009 16:05:00 GMT

Spac_Acer

Did you see my question before that last news post by me, by chance? If so I would appreciate your thoughts on what I am asking?
WHERE,
WHO
The numbers are not possible. It seems to me to be a statistical impossibility.
Do you see it that way as well? OR What?

Either I am clearly not seeing something, or I am the only one seeing or thinking of it (not likely these days) or is it not even a problem?
(At least I did get to rock my economics teacher out his head, first student in 22 years to answer his question first day correctly)
Thank you all for your thoughtful replies, please.

Cvoc - The government in ...

Sun, 14 Jun 2009 06:59:00 GMT

Cvoc - The government in Sacramento is full of brainless people. Do they even get it that prices went well beyond affordability? No! it wont help to modify loans.

Oh Tell me this is not true, ...

Sun, 14 Jun 2009 05:56:00 GMT

Oh Tell me this is not true, another Moratorium, This is dated June 13th NO PLEASE, NO MORE SLOW PAIN...

SACRAMENTO, Calif. Ca. is imposing a 90-day moratorium on housing foreclosures under a new law that takes effect Monday.The law is expected to make lenders try harder to keep borrowers
in their homes. Loan companies must prove they tried to modify the
delinquent loans before they can begin foreclosing.But supporters acknowledge the California Foreclosure Prevention
Act won't stop thousands of foreclosures from eventually happening.
There have been more than 365,000 foreclosures in California since
early 2007, with many more already scheduled.The bill passed in February is similar to the Obama administration's Making Home Affordable Program that began in March.Both encourages lenders to cut interest rates or rewrite loans to affordable levels.

The global housing boomJun ...

Sun, 14 Jun 2009 05:40:00 GMT

The global housing boom

Jun 16th 2005  From The Economist print edition

NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000.

What if the housing boom now turns to bust?
According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs.

Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history. …

I have a question I ...

Sun, 14 Jun 2009 05:01:00 GMT

I have a question I can't seem to get a GOOD (thoughtful) answer to.
I see that some of the posters here are smart folks, so I will ask this of you. Please consider it and reply, pretty please?

I have a feeling that everyone that has or is going to have a foreclosure on their credit profile clearly is going to have IMPAIRED Credit, almost always they (we) fell behind on other bills due, so the credit impairment is wide spread and more then just the mortgage FICA HURT... badly.

WHO IS GOING to be able to revive the housing market? (for all of you who think that housing will make a come back)

I don't see how based on just that GIANT problem to over come, not to mention the TIGHTER Credit standards needed, added to that, you are going to need people (count a lot of people) that have:

A) Have Good Credit (how can that many have good credit when so many have impaired credit?)
B) Have Good Income (The income needed by that many people, there is not enough higher paying jobs to afford the credit)
C) Have Saved Money 10-20% Down Payment (That means they will have been working and saving for a some years)

What I am having trouble with is WHO IS GOING TO FIT that set of requirements by the numbers needed to apply pressure on the housing market even to just to keep the prices FLAT much less to create a upward bias to prices?

So recap: WHO IS GOING TO BE THE BUYERS and WHERE are they going to come from in the numbers needed?

Does anyone else see this is a problem with no good answer?

I see a SEA of people with impaired credit, not being able to barrow even if they wanted to, I don't want to own again I have been a home owner since 1982 and before the bubble it was always a question if you were going to get out of your current home with enough money (after commission) to make it worth while.

well, nvchaz, I will give ...

Sun, 14 Jun 2009 01:18:00 GMT

well, nvchaz, I will give you that: This one is such a doozey, that you have to judge it all on its own. And, for the price of homes you are looking at, buying does seem to balance out risk/reward reasonably.

That's good to know that ...

Sat, 13 Jun 2009 23:58:00 GMT

That's good to know that we are at stage 7... gonna buy at stage 8..

No, I don't think they are ...

Sat, 13 Jun 2009 17:32:00 GMT

No, I don't think they are unrelated but they are different.

You again persist with the tulip analogy. It would be better to look at the 1890s real estate bubble if you are searching for certainy based on precedent.

This bubble is unprecedented in many ways. Those who continue to chart their course of action based on precedent without making note of current unique developments are taking the lazy way and are doomed to failure.