patrick.net

Housing never goes down! Buy now or be priced out forever!

David9 says

Thankfully, some of the comments include:

TR • 4 hours ago

Can't edit out "amp;"

Sounds like a PatNeter

You take what I offer for your smelly crap shack or enjoy eating cat food and rotting in the decaying hell hole, cottontop. It's your call......

If you can't stand the heat, you get out of the kitchen. Do any of you really believe that someone called in gun threats about double R at his double senior school? Not a chance, he is burned out and flaked, plain and simple. He busted his ass and built an empire, but paid a physical and mental price. Happy for him, glad he moved on and found his happy place. The music's over, turn out the lights.

I'm sorry if people don't know that sub-prime mortgages are still outstanding but the figure is about 50% of them.
I know this figure from a source that is not public I was helping someone study who wants to be in the Nationwide Mortgage Licensing System (NMLS). This is a new requirement for mortgage originators. She paid for a course and so I can't provide a link here.
The subject was boring to me but I'm always curious. I was actually shocked to read the figure that about 1/2 of the mortgages in the U.S.A are sub-prime.
The other factoid was Fannnie&Freddie stock losing 90% of their value in 2008.
Other things surprised me, such as how absurd the house of cards was but I saw the reason behind it.

Clambo - the misunderstanding arises from the definition.

Bank of America, QBE to Settle Insurance Lawsuit for $228 Million
Reuters, Apr. 7, 2014--Aubin, Dena
Bank of America and QBE Insurance Corp have agreed to pay $228 million to settle claims that they engaged in a kickback scheme inflating the cost of insurance that homeowners were forced to buy, according to a court filing.
(More)

Citigroup Reaches $1.13 Billion Pact over Mortgage Bonds
Bloomberg, Apr. 8, 2014--Campbell, Dakin
Citigroup Inc. agreed to pay $1.13 billion to settle claims from mortgage-bond investors as it seeks to curb liabilities tied to the financial crisis. It took a $100 million first-quarter charge.
(More)

I just thought I'd sneak in.

Pricewise, RE in SFBA has been fairly stable between Aug 13 to Dec 13. Price has started to creep upwards since early 2014. My WAG is the creep up would stop in Jun and then sideways for many months because of increasing inventory, increasing mortgage rate, higher pays and higher employment rate.

The market is pretty flat ... except for that whole rising prices thing.

Y-o-Y : 5.6% nationwide, and about 18% for California. The trend looks like it will continue into Summer.

Pnet, wake me if the "apoc-a-crash" comes.

Hey rew, I am happy you are happy. Enjoy your place and your family. If your job allows you to make enough money to pay craftsmen to do the upkeep your home or your boss allows you time to put in the work, your golden. Some of us look at the fact we are over burdened by long work hours, supporting the boomers, both parents working, there's only so much time/money to go around. I will rent, enjoy the benefits it allows me and wait for the bloated boomers to die off.

I found a reference if interested.
The document was from 2008.
copy/pasting portions that may interest some:

"The number of outstanding first mortgages is estimated at 55 million and was derived from the National Delinquency Survey (NDS) of the Mortgage Bankers Association (MBA). The NDS contains 45.4 million first mortgages, covering about 80%-85% of outstanding first-lien mortgages.
This yields a total of 55 million first lien loans.
The Federal Reserve reports that the dollar amount of outstanding first lien mortgages at 6.30.08 was $9.42 trillion."

"By number: Forty-nine percent of the 55 million first mortgages are Subprime or Alt-A (26.7 million of 55 million).
By dollars: Forty-nine percent of the $9.42 trillion in outstanding first lien mortgages are subprime or Alt-A ($4.622 trillion/$9.42 trillion)."

clambo says

I found a reference if interested.

The document was from 2008.

copy/pasting portions that may interest some:

"The number of outstanding first mortgages is estimated at 55 million and was derived from the National Delinquency Survey (NDS) of the Mortgage Bankers Association (MBA). The NDS contains 45.4 million first mortgages, covering about 80%-85% of outstanding first-lien mortgages.

This yields a total of 55 million first lien loans.

The Federal Reserve reports that the dollar amount of outstanding first lien mortgages at 6.30.08 was $9.42 trillion."

"By number: Forty-nine percent of the 55 million first mortgages are Subprime or Alt-A (26.7 million of 55 million).

By dollars: Forty-nine percent of the $9.42 trillion in outstanding first lien mortgages are subprime or Alt-A ($4.622 trillion/$9.42 trillion)."

Link the article.

This is another site that shows the percentage of sub-prime loans to total mortgages:

http://www.frbsf.org/education/publications/doctor-econ/2009/december/subprime-mortgage-statistics

You can see the ratio in the graph, though it is lower than the figures quoted elsewhere.

clambo says

I know this figure from a source that is not public I was helping someone study
who wants to be in the Nationwide Mortgage Licensing System (NMLS). This is a
new requirement for mortgage originators. She paid for a course and so I can't
provide a link here.

lol--you sound like that old rootvg guy that guaranteed that Romney would beat Obama. He also has secret sources that were in the know....

The data is clear and the percentage of mortgages that are subprime is MUCH, MUCH less than 50%. You are way off.

clambo says

The subject was boring to me but I'm always curious. I was actually shocked to
read the figure that about 1/2 of the mortgages in the U.S.A are sub-prime.

You should be shocked--it's complete BS.

clambo says

I found a reference if interested.

The document was from 2008.

copy/pasting portions that may interest some:

If you can copy and paste then you can link to this mysterious secret document. Like tatapua said complete bs.

This is starting to concern me a little bit. Still early in the spring buying season, so let's hope it's just a pause. I do know they will have to ease off on tight loan requirements, and when that happens all the pent up demand that has been accumulating over the last 6 years will release its energy like a tsunami.
Qualified buyers who postpone their home buying plans will look back after a few years and kick themselves for missing yet another opportunity to buy at bargain prices.
Potential buyers.......you have been warned.

Call it Crazy says

Strategist says

Maybe they finally realized there was no hope, and gave up on you and the bear gang.

Maybe they finally listened to the bear gang and are furiously selling all their crap shacks and getting out before this bubble pops and are too busy to post here...

Something tells me they are on a beach in Jamaica, desperately trying to buy more properties on their cell phones.

Call it Crazy says

Strategist says

Qualified buyers

That, I believe, is the problem...

There aren't enough "qualified buyers" who can afford to buy (or have the down payment/savings) at these rates and prices....

Just lower the benchmark for what makes a 'qualified buyer"
First time buyers will not always have perfect credit or a 10 year job history.
We bailed out the asses of the major banks, now it's payback time.

They are not able to lower the benchmark.

Without a very lengthy post, the actual source of capital is not just banks, and so they have others who determine the rules of underwriting.

What matters today is 1. verifiable income v loan 2. credit score .

With a credit score under 720 you may be waiting a while.

Want to buy with nothing down? Be a veteran.

I copy/pasted the important passages for you.

Tatupu, I am mystified by your attitude but I realize this is the internet.

I have no interest in anyone believing nor disbelieving me, I don't care.

Here's a link. If you forward to pg. 5 you'll see some info.

$2.51 trillion sub-prime+$3.035 trillion Alt A=$5.545 trillion.
Fed total estimate=$9.42 trillion.
The data are as of 2008.
http://www.aei.org/files/2011/02/09/Pinto%20Government-Housing-Policies-in-the-Lead-up-to-the-Financial-Crisis-3-Memoranda-2.5.11-rev.7.25.11.pdf

My "mystery documents" may be more recent,

clambo says

I have no interest in anyone believing nor disbelieving me, I don't care.

Here's a link. If you forward to pg. 5 you'll see some info.

Did you read page 1-3? The guy just made up his own definitions. More grad student publish or perish junk.

Call it Crazy says

, because this spending binge flows through most of the different wage levels...

That's because one of the tenets of capitalism is that money and especially the consumption that it brings buys happiness. There's definitely a significant amount of truth to that - buying stuff and experiences brings satisfaction to our hedonistic ID as opposed to some communist nirvana about "brighter tomorrow."

It's people's nature to not save, it's like entropy increasing naturally.
It takes discipline to save money. It's a decision you must make, there are many outside influences for you to spend all of it.
Ads, females, peers, all may judge you or worse call you a "cheapskate" which these days doesn't carry such a stigma.
I had a yuppie female visit me from Mexico's richest town. She was a bit snobby. I showed her the Capitola Goodwill. She loved some stuff she found and was amazed. I had to buy her another suitcase to take her shit home when she left: Briggs&Riley for $7 ($480 new)

Maybe those 92 million people out of the workforce are part of the problem, and the millions of illegal workers who displaced them are mostly renters.

CaptainShuddup says

If you're single you'll do with out a lot things

True. It's much easier to do without cable TV and at home high speed internet at home when it's just you.

clambo says

It's people's nature to not save

Corrected:
It's stupid people's nature to not save

CaptainShuddup says

in fact married people making between 62K to 96K pay more taxes than singles making the same, or married people making more. In the form of a marriage penalty.

What's keeping them from getting divorced, just to save on taxes? People do it.

clambo says

It's people's nature to not save, it's like entropy increasing naturally.

It takes discipline to save money. It's a decision you must make, there are many outside influences for you to spend all of it.

The problem is that a comfortable living, used to cost a lot less. So today, a guy in that one bedroom condo with a vehicle and a few trips, here and there, is probably already stretched.

But at the same time, once you've developed a setpoint, it's a lot easier to stick with it. Thus, when my bonuses bloomed, upon getting settled in this hedge fund job, I was able to immediately save it all. And thus, I've maintained the "loser" engineering lifestyle, because I was conditioned earlier in life, since my career didn't start on Wall St, like some other ppl who'd gone into this field from the start.

Thus, all my prior fears of losing my job to a layoff and then, being forced to sell or carry two mortgages, etc, are all gone.

CaptainShuddup says

I know find out, because I did my taxes, that in fact married people making between 62K to 96K pay more taxes than singles making the same, or married people making more. In the form of a marriage penalty.

Not completely true. If one spouse makes $96K and the other makes $0, you often pay less than two single people living in a household making $96K and 0. If both of you make $48K each, then it's possible you may be paying more in some cases, depending on income level. The marriage penalty penalizes people when both spouses earn closer to the same amount and when the household income is above a certain threshold, but if you live in perfect 1950s household, you come out ahead.

JH says

It's incredible. Last year the assessment went down by X amount (50%-ish), and the tax rate went up by Y. Amazingly, the tax bill was IDENTICAL!!! To the penny.

It's pretty standard in certain jurisdictions to do the reverse when they do a re-valuation where the value goes up significantly because it's been 7-8 years since the last re-valuation.

Call it Crazy says

More than half of homes currently listed for sale in Miami (62.4%), Los Angeles (57.2%), San Diego (55.3%), San Francisco (55.2%), Denver (52.8%), San Jose (50.9%) and Portland, Ore. (50.3%) are unaffordable by historical standards.

I just moved my mother to a place in Miami. Fortunately, she has a huge pension, about 3x the national median income, so this wasn't a problem. I looked for myself and was appalled.

Prices are absolutely unaffordable for most of the very comfortable families in the top 30%. It's $500k+ for an ancient 2 bedroom with glass everything, Bronx Baroque Style, the old NYC apartment was moved in 1971 and the walls are decorated with Psychadelic Brown Wallpaper that look like DNA Strands. With outdated facilities, no gym but a card playing room, and absolutely no pets, not even under 20 lb.

The newer apartments are somewhat cheaper, but the HOA fees make no sense, $700-900/mo, and they're still maybe 30% higher than the maximum price based on 3-5x income. I assume the HOA fees are because half the condos are empty.

There's also a massive gap between Condos that allow rentals and those that don't (or those that allow rentals only after 3 years of ownership, useless for investors). What's happening is that Grandma wants to sell, but she sees in neighboring, rentals-allowed Condos they are asking half a million, she thinks she can get the same thing for her Bronx-French Colonial Furnished apartment with the Multicolored Astrick wallpaper and 1976 Yellowish-Brown Electric Stove equipped kitchen with that bizarro faux-marble tile.

Also, Granny and/or her babyboomer almost-senior children remember 2007 prices and are insistent on holding out for that.

Yes, there are plenty of Russians and South Americans buying, but they're buying the luxury apartments to launder or hide money. They're not buying the middle-class or upper-middle class condos.

Seriously some of these places are decorated like Liberace on Acid.

One place had a huge gold-framed picture of a Rabbi, sitting between two Fake French Imperial Chairs with blue cushions and of course gold trim - and 3 of 4 walls glass, of course.

Wanting $500k for apartments that have brown and orange kitchens and need about $100k just so you can rest your eyes inside them.

corntrollio says

It's pretty standard in certain jurisdictions to do the reverse when they do a re-valuation where the value goes up significantly because it's been 7-8 years since the last re-valuation.

For sure. In this case, Cook County is so poor that they have just been raising total tax (not rates, necessarily) forever. They know how to play the game when housing is up and they know how to play it when housing is down. Now that it's down, they spike the assessments (even the re-assessments, which we have gotten by request). It's quite a stark contrast to CA where many assessments are sitting WELL below market value. Yet even new assessments (not Prop 13 controlled, essentially) in CA in comparable neighborhoods are paying less real taxes. Cook County is ass backwards.

Another anecdote. Asking $1.449 mil, sold at $1.8 mil. Closed within 15 days.

http://www.redfin.com/CA/Cupertino/10587-Randy-Ln-95014/home/1331434

Well, we put in an offer for this apartment building and didn't get it. It closed in 9 days for $130k above list price. Of course, it's not possible according to Patneters.

http://www.redfin.com/CA/Redwood-City/436-Clinton-St-94062/home/2021871

The money comes out of the taxes paid by us. This is such bull shit!

CaptainShuddup says

I mean a single guy can time his nightly dinner to coincide with the local bar's happy hour buffet.

Yup! :-)

Very nice statistics. Very informative.

Net Jersey is the place to be in.
Is it a co incidence that blue states take the longest to foreclose?

There isn't any cheese for Blue states,the Red states are eating most of it.

http://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/

Cops.one day, will shoot the wrong person & a family member will go postal. Wonder who they might go postal on?