patrick.net

prices are way out of whack. With poeple still losing jobs and unemployment so high,housing will keep dropping for ever till it reaches 10% of todays value. Wait till 2020 when prices will make sense.

Don't buy the hype of recovery..the down turn will start again. US lost trillions in housing. it will take forever to recover.Just because the mortgage is less than the rent does not mean you should pull the trigger. houe prices will go down to 10% of todays value (atleast in bay area -- cupertino, palo alto..etc)

WillyWanker,

You're the typical school yard bully. It makes you feel better to mock others. I do believe however, there were many like you in Detroit a few years back;) I think they're humbled now though. Just maybe, we're in for some serious sh#t here in CA. There's a lot of nasty in the news these days.
Do you have a place to go when TSHTF, mommy's house perhaps?

fudakas says

WillyWanker,
You’re the typical school yard bully. It makes you feel better to mock others. I do believe however, there were many like you in Detroit a few years back;) I think they’re humbled now though. Just maybe, we’re in for some serious sh#t here in CA. There’s a lot of nasty in the news these days.

Do you have a place to go when TSHTF, mommy’s house perhaps?

Wow, I'm impressed! I guess I must have touched a raw nerve. Good on that!

renter for ever_san jose says

Don’t buy the hype of recovery..the down turn will start again. US lost trillions in housing. it will take forever to recover.Just because the mortgage is less than the rent does not mean you should pull the trigger. houe prices will go down to 10% of todays value (atleast in bay area — cupertino, palo alto..etc)

OK, THAT'S funny. 10%??? Why not say they will drop by 100%? Free houses in Palo Alto. Keep dreaming.

It should only take a few months to see if this is a dead cat bounce (Is this a trendy term right now or what?) or if prices really will start to rise. I have my money on the former, literally. If the latter is true, I guess most of us will have to eat crow but I'm confidant that the cheerleaders are in for quite a downturn. I'm only dreading that when prices start to drop again, they will find some new angle to play and annoy us some more instead of scurrying off under a rock.

"EXACTLY. I would say that we are at the bottom right now" TOB : are you kidding ? !!
People said the same thing during depression and then there was the nose dive. I might be exaggerating by saying 90% correction but 50% is guaranteed. how can housing recover with so many people losing jobs and so much debt.
I'll buy in 2016 when decent homes in palo alto are 400k.
The realtors and cheer leaders will always say that "this is the time to buy" !

Most people just have no brains and are only able to see a future that is a primitive extrapolation of the present.

More like basic interpolation based on un-editorialized raw economic data.

Even an absolute optimist with blinders would have a hard time not spotting some storm clouds, the most menacing ones being taxes and stagflation in the coming years. Facts aren't open to interpretation. Unless you are a lawyer.

It seems safe to say that the middle class will enjoy a lot of taxes (never mind what you heard Obama say during his campaign) and a lower - or at best, static - standard of living throughout the next decade. Housing cannot remain immune to any of this fallout.

RE: riff-raff renters: Not always, but usually, with a boilerplate lease agreement, you are required to submit to a criminal/credit check - two things not required for an FHA loan, which is glorified renting.

Renting and Owning are 2 completely different things. I do not know how people can so easily confused the two.
1. When you Own, you have interest/stakes in the actual property. If the property goes up in value your networth goes up, and vi. vi. You cannot sell a property you are renting.
2. When you buy a property a % of what you are paying goes to principle. Unless you are using your house as a savings account in 15 to 30 years you own the place. Once you own the place, all you pay is taxes, maintenance and HOA fees which in almost all cases are going to be a LOT less then what you would have to pay in rent for the equivalent home.
3. When you own a home, inflation will most likely increases your net worth. When you are renting a home unless you your salery is inflation based, inflation will normally have a negative inpact on your net worth

d3 says

Renting and Owning are 2 completely different things. I do not know how people can so easily confused the two.
1. When you Own, you have interest/stakes in the actual property. If the property goes up in value your networth goes up, and vi. vi. You cannot sell a property you are renting.
2. When you buy a property a % of what you are paying goes to principle. Unless you are using your house as a savings account in 15 to 30 years you own the place. Once you own the place, all you pay is taxes, maintenance and HOA fees which in almost all cases are going to be a LOT less then what you would have to pay in rent for the equivalent home.
3. When you own a home, inflation will most likely increases your net worth. When you are renting a home unless you your salery is inflation based, inflation will normally have a negative inpact on your net worth

Some points you left out:
1a. When you own a home, if the property goes down in value, your net worth goes down. And since it is leveraged money, it can easily lead to financial ruin. You do not have to worry about selling or being foreclosed on when you are renting.

2a. A huge % of your mortgage payments early on are interest on the loan (assuming 30 yr fixed) which is not toward the principal, so this is essentially like renting where your money goes to someone else and not towards the property.

FYI, All my comments above were sarcastic. i am actually sick and tired of the irrational apathy in this bust just like i was tired of irrational exuberance during bubble.

Some Guy says

I’ve heard of Caesar Salad, but Roman Noodles…?

I think that's spaghetti.

Home prices will be going a lot lower as treasury yields begin to rise for years to come, thus increasing mortgage interest rates. This is a no-brainer.

Ok, I'm gonna try something, before I say something intelegint:

HAHAHAHAHAHAHAHAHAHAHAHA..........

HA

Housing won't be the same for 10 years. Maybe never. Well, almost never, but the return of real estate "pricing" will not be the same as real estate "value".

We will have higher prices, but I don't feel that the value of real estate will be rising. What happens when the currency fails? Will we be able to afford to pay each other enough?

camping says

d3 says

Renting and Owning are 2 completely different things. I do not know how people can so easily confused the two.
1. When you Own, you have interest/stakes in the actual property. If the property goes up in value your networth goes up, and vi. vi. You cannot sell a property you are renting.
2. When you buy a property a % of what you are paying goes to principle. Unless you are using your house as a savings account in 15 to 30 years you own the place. Once you own the place, all you pay is taxes, maintenance and HOA fees which in almost all cases are going to be a LOT less then what you would have to pay in rent for the equivalent home.
3. When you own a home, inflation will most likely increases your net worth. When you are renting a home unless you your salery is inflation based, inflation will normally have a negative inpact on your net worth

Some points you left out:
1a. When you own a home, if the property goes down in value, your net worth goes down. And since it is leveraged money, it can easily lead to financial ruin. You do not have to worry about selling or being foreclosed on when you are renting.
2a. A huge % of your mortgage payments early on are interest on the loan (assuming 30 yr fixed) which is not toward the principal, so this is essentially like renting where your money goes to someone else and not towards the property.

1a. If ones property going down leads them to financial ruin, the chances are that they were never financially sound enough to afford that property in the first place.
2a. Your interest is a tax right off and over time the amount of money going back in to principle increases as you pay off the loan. . If you are in for the long run and are responsible, your equity growth rate will increase overtime.
With this said, I do not advocate for people to buying now or waiting. I personally feel that some areas are still way over priced while other areas are not.
The only thing I disagree with is peoples over generalization of the forces at play. Just like I did not agree people telling everyone’s to buy when the market was bubbling I do not agree with people telling everyone not to buy when the market is falling. The truth is none of us have a crystal ball and what may be true for one region may not be true for another.

d3 says

camping says

d3 says

1a. If ones property going down leads them to financial ruin, the chances are that they were never financially sound enough to afford that property in the first place.
2a. Your interest is a tax right off and over time the amount of money going back in to principle increases as you pay off the loan. . If you are in for the long run and are responsible, your equity growth rate will increase overtime.
With this said, I do not advocate for people to buying now or waiting. I personally feel that some areas are still way over priced while other areas are not.
The only thing I disagree with is peoples over generalization of the forces at play. Just like I did not agree people telling everyone’s to buy when the market was bubbling I do not agree with people telling everyone not to buy when the market is falling. The truth is none of us have a crystal ball and what may be true for one region may not be true for another.

1a. I think you are overstating, but that's ok.
2a. Interest is a tax writeoff, but you only get a small portion back.

I agree with your last two sentences.

Buying is not necessarily better then renting.
I have rented for decades and the money I have saved has accrued lots of interest over the years that I would have not have received if I had put everything into a house.
I have always had plenty of cash available without using credit cards and could move whenever I felt like it.
Now I don't have any debts and the have not lost a penny in the economic collapse but many of my homeowning friends are house poor, have lost a big chunk of their retirement money, and are facing bankruptcy.
I still would like to buy a house but realistically I just go on renting for years if real estate prices remain as ridiculously high as they still are.

Austinhousingbubble says

It seems safe to say that the middle class will enjoy a lot of taxes (never mind what you heard Obama say during his campaign) and a lower - or at best, static - standard of living throughout the next decade.

Hopefully, the standard of living may increase for middle class who have actual cash savings. Of course, we may get a tax on savings account balances, and perhaps that tax on paid-for homes that imputes a taxable income on what the rent would be.

The Original Bankster says

depends on where you are… seems AZ is resolutely opposed to raising property tax.

True, but I am concerned with the Federal gov putting the tax on Savings Account balances, along with the Federal gov using a paid-off home as imputed taxable income.

Renting and Owning are 2 completely different things. I do not know how people can so easily confused the two.

No confusion. The prevailing sentiment regarding 3.5 down is that it is, ultimately, a piffle to walk away. That was the point I was trying to illustrate. What is the big difference between this and the dreaded riff-raff renter? The riff-raff renter was probably screened better, and in some instances, has almost as much tied up in their deposit as an FHA buyer does.

I’ve heard of Caesar Salad, but Roman Noodles…?

There is a residential demographic on Zillow referred to as Ramen Metro. The next best one Scrappy Homeowners.

I am concerned with the Federal gov putting the tax on Savings Account balances, along with the Federal gov using a paid-off home as imputed taxable income.

It seems pretty likely that there will be something like a VAT tax levied against all income levels here in the states. However they package it, I think everyone's going to feel the bite in the coming years, no matter how many strides you've made financially.

Austinhousingbubble says

I am concerned with the Federal gov putting the tax on Savings Account balances, along with the Federal gov using a paid-off home as imputed taxable income.

It seems pretty likely that there will be something like a VAT tax levied against all income levels here in the states. However they package it, I think everyone’s going to feel the bite in the coming years, no matter how many strides you’ve made financially.

Thank~you Barack Obama. The agent of 'change'. *puke*

Just because you shit your pants doesn't mean you should blame your underware. Reganomics is what it is.

Thanks for sharing your 'shit' story. Did you learn that from experience?

I suppose you also learned the difference between shit and shinola~~~the hard way.

HeadSet says

True, but I am concerned with the Federal gov putting the tax on Savings Account balances, along with the Federal gov using a paid-off home as imputed taxable income.

But seriously, Headset. This will never happen.

Higher income and gains taxes for the wealthiest 1%, yes. General taxation of all property (not just real property) at the federal level, no. I think that is extremely unlikely.

Where has this topic come up? I'd bet it is a manufactured and totally false scare tactic created by some wingnuts.

Uh, dude, "wealth increase"?

wealth increase = income + capital gains

So you're talking about a flat income tax, which is supposed to be simple, at least according to the regressive people who champion it. Why cloak it in weird terminology?

But anyway, your idea of fair taxation is incredible regressive, and will result in the US descending to the developmental level of a banana republic. And you, bap33, will not be a plantation owner, but one of the peons that work there. Seriously, I do not mean it as a put-down, but you will. I just think you do not realize it.

http://en.wikipedia.org/wiki/Georgism

"Georgism, named after Henry George (1839-1897), is a philosophy and economic ideology that holds that everyone owns what they create, but that everything found in nature, most importantly land, belongs equally to all of humanity."

I am not particularly sure I am an advocate, but I found it interesting. It would mean NO income or capital gains tax, but definitely property or 'land' tax.

"George preferred taxing unimproved land value, in part because this would be less disruptive and controversial in a country where land titles have already been granted to individuals. With the revenue from this "single tax", the state could avoid having to tax any other type of income, wealth or transactions. Although introducing a large land value tax would cause the value of land titles to fall significantly, George was uncompromising on the idea of compensation for landowners, seeing the issue as a parallel to the earlier debate about compensating former slave owners."

"everything found in nature, most importantly land, belongs equally to all of humanity"

Now thats a slippery slope. does that mean all the illegal immigrants have the same right to our land as us ?

>>it is all wealth and should be taxed evenly.

I assume this means that you are against California Prop. 13?

>> comes in lumps and chunks from rich people

What many people do not seem to understand is that the wealth of the wealthy would not be possible without the labor and other efforts of the less wealthy.

A progressive tax (where percentage paid increases with income) is meant to balance the forces that would otherwise create an ever increasing gap until everyone is either dirt poor or filthy rich. And it is fair, because it re-distributes (gasp, I know) what was first distributed to the rich and the ownership class.

renter for ever_san jose says

“everything found in nature, most importantly land, belongs equally to all of humanity”
Now thats a slippery slope. does that mean all the illegal immigrants have the same right to our land as us ?

No, someone still holds a land title. I.e. you don't just share land ownership or use, you title that use similar to deed of 'ownership' now. In effect, it's the same thing as ownership except the value of land titles are less since they are the one thing that is taxed. Turns our current system on it head or sideways, since most states get revenues in thirds - 1/3 income, 1/3 sales, 1/3 property. This would make it 100% property tax. In CA, we get a lot less from property tax due to prop 13 (and therefore pay a larger % in sales and income taxes comparably). Under Georgism you still have rights of 'ownership' but you pay tax to the state for the land title. Illegals would not have any right to use nor would they benefit in any way through those taxes (hypothetically) since they are not part of the citizenry. Frankly, immigration really has nothing to do with it in my view.

But again, I am not the expert nor am I necessarily advocating this, just adding it to the debate.

Famous Georgists include Henry Ford.

Thank~you Barack Obama.

Regardless of what side of the street you're on politically, drastic tax measures were going to be an inevitability. I have to think that even the biggest Obama proponents are feeling a little unimpressed by this administration/congress. They should be. Other than maybe the increase to the GI Bill and anti-usury policies, it seems like more of the same.

jabailo says

Housing inflation started in the 80s and ran for 3 decades. Why would you expect for housing deflation to only last a year and then suddenly “recover”?

You forgot the early to mid 90's~~~you know when the real~estate market was in the toilet.

http://finance.yahoo.com/news/Stock-futures-moderately-apf-2848453904.html?x=0&sec=topStories&pos=main&asset=&ccode=

"ap
Investors finally find good news on unemployment
Better-than-expected jobs report pushes stocks higher, feeds hopes for economic recovery"

Stock market rally this morning. We shall see if it holds on. Nevertheless, good news for the economy. Should make all those of you who voted for Obama very pleased that he is pulling this country out of the recession and lifting markets from their lows.

I've been seeing this "rebound" BS in the news the past few weeks, and just dropped by to comment. Good to see people aren't buying it--but what do you suppose is the motivation here--to fuel another mini-bubble in the markets, to inject some optimism in consumer spending, or some other bubble is in the works?

I find all this "rebound" talk ominous, because it suggests that big business thinks it can keep things afloat without anybody seriously questioning their business models, especially those who rely heavily on the retail end. IMO, we won't see a real rebound until defunct business models crash and burn, the banks finally open their books, and housing prices return to fundamentals. In other words--wages get in line with a real money supply, and housing follows that. We have a long way to go, and it will be a painful return to reality for overleveraged America.

Nice to see you again.

The big stock market rebound has pushed up interest rates on 10 year treasuries.
That will really help the mortgage market.
I am hearing from a source inside a foreclosure prevention organization that the next dump of properties by the banks in Southern California is likely to happen in about 6 to 8 weeks. Right as the prime home buying season and the moratorium are both coming to an end.
He also thinks that higher rates and the supposedly "improving economy" will cause the Alt-A resets to be
much larger than current payments.