Why the Housing Recovery is Nearly Homeowner-Less


By Patrick   Follow   Mon, 14 Jan 2013, 5:59pm   1,822 views   23 comments
In Menlo Park CA 94025   Watch (1)   Share   Quote   Permalink   Like (2)   Dislike  

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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  1. David9


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    1   8:54pm Mon 14 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

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

    http://www.waypointhomes.com/

  2. JodyChunder


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    2   8:57pm Mon 14 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    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.

  3. JodyChunder


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    3   10:12pm Mon 14 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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.

  4. fedwatcher


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    4   10:57pm Mon 14 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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.

  5. varmint


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    5   12:16am Tue 15 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    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.

  6. FortWayne


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    6   4:04pm Tue 15 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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.

  7. lostand confused


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    7   4:26pm Tue 15 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    Oh not to mention Made in China drywall.

  8. pkennedy


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    8   5:03pm Tue 15 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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.

  9. The Professor


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    9   5:59pm Tue 15 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    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.

  10. errc


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    10   6:06pm Tue 15 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    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

  11. Philistine


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    11   6:12pm Tue 15 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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 ;)

  12. APOCALYPSEFUCKisShostikovitch


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    12   7:07pm Tue 15 Jan 2013   Share   Quote   Permalink   Like (6)   Dislike (1)  

    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.

  13. Facebooksux


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    13   7:09pm Tue 15 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

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

  14. APOCALYPSEFUCKisShostikovitch


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    14   7:14pm Tue 15 Jan 2013   Share   Quote   Permalink   Like (3)   Dislike  

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

  15. lostand confused


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    15   7:17pm Tue 15 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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!!

  16. Facebooksux


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    16   10:08pm Tue 15 Jan 2013   Share   Quote   Permalink   Like (3)   Dislike  

    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!

  17. bgamall4


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    17   9:34am Wed 16 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    robertoaribas says

    cash investors (many of which later refinance anyways) have been around 30% of the phoenix buyers for the past year. At no point have normal home buyers not been the majority, and this city got hit as hard as any.

    But the 30 percent are affecting the price, paying cash, in some cases breaking the comps on purpose. The rest are 3.5 percent down people. You cannot have a stable housing market with few 20 percent down mortgages.

    The powers that be by screwing the consumer agency to protect borrowers already have easy money in the works to push this up farther, according to Mike Whitney on this board. But it all depends on how confident people think the next bubble, which is starting now in Phoenix, can last.

    50 percent of buyers in Las Vegas are cash. And these are mainly investment banks and private equity firms from Wall Street. They are screwing American renters one more time. It is never ending, and they were shown the way by the Square Mile, in the UK.

  18. varmint


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    18   10:59am Wed 16 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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.

  19. zzyzzx


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    19   11:48am Wed 16 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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.

  20. zzyzzx


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    20   12:03pm Wed 16 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    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

  21. bgamall4


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    21   12:54pm Wed 16 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    robertoaribas says

    You can't have it both ways: prices will fall, it is too risky to buy, but the corporations investing are screwing everyone and will make all the money! PICK ONE!!!

    Robert, the issue is that it is now a gamble, a crapshoot. Prices may go up, they may go down, but they are not based upon fundamental demand. http://www.businessinsider.com/naufal-sanaullah-guide-to-the-us-economy-in-2013-2013-1 and the comments.

  22. The Professor


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    22   1:32pm Wed 16 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    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!

  23. David9


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    23   2:34pm Wed 16 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    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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