Why the Housing Recovery is Nearly Homeowner-Less

By Patrick   follow   Mon, 14 Jan 2013, 9:59am PST   ↑ Like (2)   ↓ Dislike   2,904 views   21 comments   Watch (0)   Share   Quote  

http://truth-out.org/news/item/13883-why-the-housing-recovery-is-inequitable

The financial crisis of 2008 was terrible for homeowners saddled with heavy mortgage payments, especially the millions of low-income, first-time buyers who were tempted to buy in with deceptive loans during the height of the housing bubble. About 4 million foreclosures have been completed since the financial crisis of 2008, according to CoreLogic, a data provider to the real estate industry. Since 2006, when subprime loans first began to default in large numbers, there have been 9.

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David9   befriend (4)   ignore (0)   Mon, 14 Jan 2013, 12:54pm PST   Like (1)   Dislike     Share   Quote   Comment 1

How convenient ! An existing pool/market of recently foreclosed upon renters for these recently foreclosed homes !

http://www.waypointhomes.com/

JodyChunder   befriend (2)   ignore (5)   Mon, 14 Jan 2013, 12:57pm PST   Like (1)   Dislike     Share   Quote   Comment 2

David9 says

How convenient ! An existing pool/market of recently foreclosed upon renters for these recently foreclosed homes !

That's the big "secret" bub...landlords are enjoying a once-in-a-lifetime barrel of desperate fish thanks to the housing bubble.

JodyChunder   befriend (2)   ignore (5)   Mon, 14 Jan 2013, 2:12pm PST   Like   Dislike     Share   Quote   Comment 3

robertoaribas says

At no point have normal home buyers not been the majority, and this city got hit as hard as any.

Well, I wouldn't buy-'n'-hold in a what is pretty clearly a market rally. I think to buy as a landlord is okay. Sell side or rent side is where I'd want to be - not shopping for a primary, unless I planned on dying there.

fedwatcher   befriend (0)   ignore (1)   Mon, 14 Jan 2013, 2:57pm PST   Like   Dislike     Share   Quote   Comment 4

The key to the rental investor is to be "local" in the right area. That is why robertoaribas wins.

Else you have to invest in the right area with the right property manager. That is difficult as you can fail by being in the wrong area or by having the wrong property manager.

The greater Phoenix area has a lot of bad property managers.

varmint   befriend (0)   ignore (1)   Mon, 14 Jan 2013, 4:16pm PST   Like (1)   Dislike     Share   Quote   Comment 5

The problem with this is that all cash offers trump mortgage offers.

Sellers know all cash will close quickly and it won't fall out. That has value, typically 3-5%.

Not only does the investment class (people with a lot of cash) have the advantage of picking off auction foreclosure properties, they can also out compete standard buyers in the MLS marketplace.

FortWayne   befriend (12)   ignore (3)   Tue, 15 Jan 2013, 8:04am PST   Like   Dislike     Share   Quote   Comment 6

donjumpsuit says

Every home is beige with white trim.

They all have the same pergo floors, black budget appliances, cheap cabinets and laminate counters.

I give each home about 5 years before it wears like a cardboard suit.

Most buyers aren't aware of things like that. It's really a shame, when people choose to be ignorant when it comes to life changing expenses.

lostand confused   befriend (9)   ignore (3)   Tue, 15 Jan 2013, 8:26am PST   Like (1)   Dislike     Share   Quote   Comment 7

Oh not to mention Made in China drywall.

pkennedy   befriend (8)   ignore (1)   Tue, 15 Jan 2013, 9:03am PST   Like   Dislike     Share   Quote   Comment 8

varmint says

The problem with this is that all cash offers trump mortgage offers.

Sellers know all cash will close quickly and it won't fall out. That has value, typically 3-5%.

Not only does the investment class (people with a lot of cash) have the advantage of picking off auction foreclosure properties, they can also out compete standard buyers in the MLS marketplace.

The thing is, for cash investors to make the numbers work, they offer 20% under full market value for a place. But in todays market, FMV works, so cash investors are offering at or above FMV because the numbers work for them. To make matters worse, they can offer OVER FMV, at which point typical consumers can't offer any more, because the mortgage won't be accepted by the banks.

The Professor   befriend (4)   ignore (3)   Tue, 15 Jan 2013, 9:59am PST   Like (1)   Dislike     Share   Quote   Comment 9

pkennedy says

The thing is, for cash investors to make the numbers work, they offer 20% under full market value for a place. But in todays market, FMV works, so cash investors are offering at or above FMV because the numbers work for them. To make matters worse, they can offer OVER FMV, at which point typical consumers can't offer any more, because the mortgage won't be accepted by the banks.

The Investers are exchanging their funny money for REAL property. The days of double the PITI are probably gone but they can still rent out and make a better return than most other investments, if they can stomach being a landlord.

errc   befriend (5)   ignore (3)   Tue, 15 Jan 2013, 10:06am PST   Like (2)   Dislike     Share   Quote   Comment 10

I wonder what this countrys housing stock will look like in ten years. Another decade of aging for the cheap materials and shoddy craftsmanship that has become the norm over the past decade plus. With all these renters being the same financial miscreants that got rubed during the bubble, and factor in the glorious track record of The American Investors proclivity to putting in the long term hard work that it takes to maintain a rental property.

Let's just hope the government churns out some serious job programs to get some people working, and that the economy can regain some kind of momentum, lest the dire nature of our situation plays our on the housing stock in slow motion

Philistine   befriend (0)   ignore (1)   Tue, 15 Jan 2013, 10:12am PST   Like   Dislike     Share   Quote   Comment 11

JodyChunder says

Sell side or rent side is where I'd want to be - not shopping for a primary,
unless I planned on dying there

Jody, we feel LA is pretty lackluster as far as places to die, so we are close to giving up the hunt and just keep renting. Our downpayment money will pay cash on a nice rental property in Claremont, though ;)

APOCALYPSEFUCKisShostikovitch   befriend (27)   ignore (33)   Tue, 15 Jan 2013, 11:07am PST   Like (6)   Dislike (1)     Share   Quote   Comment 12

errc says

Let's just hope the government churns out some serious job programs to get some people working

Not going to happen. If you're over the age of 29 and unemployed, you'll never work again in the US, unless you're cooking meth, hustling worthless investments to pensioners in boiler rooms or flipping properties.

Facebooksux   befriend (4)   ignore (0)   Tue, 15 Jan 2013, 11:09am PST   Like (2)   Dislike     Share   Quote   Comment 13

Don't forget escort/ stripper if you're female.

APOCALYPSEFUCKisShostikovitch   befriend (27)   ignore (33)   Tue, 15 Jan 2013, 11:14am PST   Like (3)   Dislike     Share   Quote   Comment 14

Right. In a few years they'll be gobbling schlongs for Ramen packets, too.

lostand confused   befriend (9)   ignore (3)   Tue, 15 Jan 2013, 11:17am PST   Like   Dislike     Share   Quote   Comment 15

APOCALYPSEFUCK is Shostakovich says

errc says



Let's just hope the government churns out some serious job programs to get some people working


Not going to happen. If you're over the age of 29 and unemployed, you'll never work again in the US, unless you're cooking meth, hustling worthless investments to pensioners in boiler rooms or flipping properties.

Well, you can always run for congress!!

Facebooksux   befriend (4)   ignore (0)   Tue, 15 Jan 2013, 2:08pm PST   Like (3)   Dislike     Share   Quote   Comment 16

APOCALYPSEFUCK is Shostakovich says

Right. In a few years they'll be gobbling schlongs for Ramen packets, too.

No flavor packs though. They have to swallow to get the flavor packs!

varmint   befriend (0)   ignore (1)   Wed, 16 Jan 2013, 2:59am PST   Like   Dislike     Share   Quote   Comment 17

pkennedy says

But in todays market, FMV works

It depends on their expected ROI. CD rates are less than inflation so pretty much any rent above taxes/insurance/maintenance is a win.

zzyzzx   befriend (10)   ignore (6)   Wed, 16 Jan 2013, 3:48am PST   Like   Dislike     Share   Quote   Comment 18

Does this mean that there are investment opportunities in WayPoint, Silver Bay Realty Trust, and other similar companies? The other ones in the article seem to be privately held.

Silver Bay Realty Trust
http://www.nasdaq.com/symbol/sby

Seems to have just gone public, and so it hasn't has and dividends yet.

I don't think Waypoint has gone public.

zzyzzx   befriend (10)   ignore (6)   Wed, 16 Jan 2013, 4:03am PST   Like   Dislike     Share   Quote   Comment 19

Found another one:

2 Brand New REITs That Have Strong Dividend Potential

http://seekingalpha.com/article/1109741-2-brand-new-reits-that-have-strong-dividend-potential?source=yahoo

That and I would think that this would be like having a huge apartment complex, where every apartment is different, and spread out over a large area, making it more difficult to maintain.

Or like already existing ticker symbol BX

The Professor   befriend (4)   ignore (3)   Wed, 16 Jan 2013, 5:32am PST   Like (2)   Dislike     Share   Quote   Comment 20

robertoaribas says

We've had 2 wold wars, major inflation, a depression, a cold war, an energy crisis...

You forgot the plague! You forgot the Black Plague!

David9   befriend (4)   ignore (0)   Wed, 16 Jan 2013, 6:34am PST   Like (2)   Dislike     Share   Quote   Comment 21

bgamall4 says

Prices may go up, they may go down, but they are not based upon fundamental
demand.

Wow. That slideshow was 'interesting'. I didn't read every word, but a repeating theme is 'all bets on housing'.

"This is a vital tailwind in an economy with almost 11 million underwater mortgages around 20% of the total."

"The rise in housing prices..."

"The efficacy of monetary policy is linked to house price performance."

"We believe the housing recovery allows for two important novel dynamics that we forecast."

"The housing market recovery should continue driving residential investment growth higher" (Notice the word 'investment'?)

"A pickup in the residential real estate market would be a boon for property tax revenues..."

Bottom line, with all due respect the APOCALYPSEFUCK guy is correct, it's not about jobs, exploring Mars, the environment, or curing cancer. It's all about house flipping !!

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