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Just one note: we should probably remove the reference to Realty Times.
Changed it to "UnReality Times".
anyone who has owned a home for even a year or two is likely sitting on enough equity to sell or refinance if the loan payments become unaffordable.â€
This is patently false. Depending on what region of the country we're talking about, anyone who bought in the last year or two (late to the party) is sitting on slim-to-none price gains. Within a matter of months, the rest of that vapor-equity --along with the easy credit that created it-- will evaporate. The days of the serial refi'er are rapidly drawing to a close.
Anyone who wishes to refinance out of an I/O or NAAVLP into a FR amortizing loan had better do so quickly, or they will be caught upside-down in an environment of tightening credit and falling prices --a negative feedback loop.
All these Gov. agencies, all these brilliant mort. lenders? Why didn’t these guys pull the plug in 2003? Not ONE person with authority could see this coming any earlier? What were they waiting for?
DinOR,
I strongly suspect they DID know what was happening, and deliberately goosed the market along. After all, to whom do bureaucrats owe their allegiance/jobs?: politicians. Who do politicians most aim to please: generous campaign contributors (NAR, Ameriquest, etc.) & regular voters, who cooincidentally also tend to be homeowners by a wide margin.
Politicians/regulators have done their best either to actively blow the bubble (Fed's negative real rates, A.G. cheerleading ARMs, GSE-issued MBS/CDOs) or --at best-- turn the other cheek on abuses within the system. You can expect them to do absolutely nothing until all the horses are gone and the barn has burned down. At that point, expect lots of blustery rhetoric and scapegoating/finger-pointing. Who knows, maybe we'll even get to see D.L. on TV doing a "perp walk".
See, look at this, an article posted on CNN Money right next to the above one about how nobody is going to get foreclosed on:
http://money.cnn.com/2006/02/16/real_estate/weekly_rates/index.htm
Mortgage rates on 5-year ARMs average 5.95 percent and mortgage rates on 30-year fixed average 6.28 percent. So again, it's all well and good that they make the broad generalization that "most homeowners have enough equity to refinance" but the question still remains: what do they refi into that is going to save them money? The answer is they don't, and many people are already caught in the trap. Can you imagine what a shitty feeling that must be to your typical clueless homedebtor? "Oh fuck, next month my ARM is going to adjust and my monthly payment is going to double. I can refi, but that raises my monthly payment by $500.00 which I also can't afford. I'm fucked. Whelp, I think it's time to go by a bottle of whiskey!"
"Once the $hit hits the fan, and a majority of foreclosed properties fall into the hands of the major lending institutions, there will be a final push to break the REALTOR monoply and it will be successful." --George
Oh I couldn't agree more. Right now we're seeing people eager to break the NAR cartel "just" because of the ridiculous commissions they are pocketing on our current inflated property values. Just wait untill the bubble bursts; the NAR is royally screwed.
@George,
I tend to agree. Plus, internet upstarts like Zillow, ZipRealty, Help-U-Sell may end up doing to Realtors what Hotwire, Expedia & Orbitz did to travel agents in the 1990s.
Have you read this thread: "Monopoly MLS Post-Mortem: What Comes Next?" Check the main page.
"REALTORs may deal in realty, but few of them transact in Reality"
I may have to add that one to the "favorite quotes" thread.
Man, I was duped. I feel so cheated by all the gold buys, and housing bears. Damn you HARM! I am going to sue you for all this crappy investment advice.
Fewlesh,
While I was always careful to point out that my opinions were *Not investment advice, I am truly sorry if they influenced you to make some bad decisions --like not buying as many homes on credit as possible.
Please accept my most sincere apology. I have seen the error of my ways and am trying my best to atone for them. :-(
Peter P
2006 Feb 16, 9:28am
Please don’t do it. I’m counting on a crash of mega proportions vaprizing at least a couple billion, make that trillion dollars of home ATM equity, to put downward pressure on our own stupid prices here in Canada.
But Vancouver is so desirable that people will always want to live there. I am going to fly over there so that I can buy a condo myself before I am priced out.
Peter P
2006 Feb 16, 9:38am
Really there is no bubble? Gee Wiz….if you can be the boomers might as well join em.
I woke up today and found that I am actually 59 years old.
I have been wrong all these years, thinking that I was born in the 70's.
I am suddenly a boomer. :)
Where is my Woodstock CD?
"Where is my Woodstock CD?"
I thought that was only available on vinyl.
Peter P
2006 Feb 16, 9:48am
I thought that was only available on vinyl.
Oh no, our generation has worked hard to embrace technology. Look at those hi-tech muscle cars!
TampaRentor Says:
"He told me that I had better get in while these types of loans are still available."
"He told me that once these loans are no longer available, then I will be priced out and will be stuck renting for the rest of my life."
Tell him Michael Holliday says he has a bridge he'd like to sell him...and if he's in Alaska, some snow too!
Tell him Michael Holliday says he has a bridge he’d like to sell him…and if he’s in Alaska, some snow too!
Are you referring to the Alaskan "Bridge to Nowhere"?
TampaRentor,
Once these types of loans are no longer available?
There are two ways out of the "hood".
One is to have a great jump shot.
The other, is to sling crack.
I didn't have a jump shot, so I started slinging crack.
Giovani Ribisi in "Boiler Room"
Patrick,
can we start a discussion on what to SHORT? Let's all make some money from this sucker. We need to act fast because some of these shares are starting to become difficult to borrow. Gotta get hold of the borrowed shares before the door closes.
Subprime lenders are definitely a prime target, credit card companies in fact are more juicy, because the subprime people don't carry their own loans on the balance (packaged off and sold as MBS), but the credit card companies are carrying UNSECURED loans which the borrowers will default on first when they are in stress! Builders like TOL, CTX are already coming down, any more room for shorting the way down? Profund Short Real Estate is good, or you can short M Reits yourself.
We have a group of smart people here, let's all make some dough while this baby blows up in the idiots' face.
Peter P
2006 Feb 16, 12:21pm
can we start a discussion on what to SHORT
Shorting? But Dow is on its way to 36,000!
NOT INVESTMENT ADVICE.
Peter P
2006 Feb 17, 5:02am
The Fed will raise interest rates to 13% but who cares, you might get a 3% loan from Canada or China. The price of a house is the monthly payment.
Huh? Are you suggesting that China will loan many to you at 3% instead of Uncle Sam at 13% because they are nice to you? Never.
How many houses have been sold with backstage deals like these:
It seems realtors are trying so hard to keep house prices from falling on transaction papers.
I suppose when I hear someone saying he's just bought a $1 million condo, what actually happened was the seller offered to pay 6 months of mortgage, 2 years of HOA fee, a free cruise to Finland, points and closing cost buyoffs, and a seller-financed, balloon interest-only mortgage. If you're a tough cookie, you can get the seller give out his left ball, too (if that's a he).
Add all that together, and you've got a bargain! No bubble after all.
just posted to their "feedback" section
how about asking your piece of mother fucking shit real whore to lower their fucking commision? I mean afterall, most of you assholes have what, a high school education? Get limber asshole because you'll be taking in the ass soon.
I hope you get herpes from fucking the admin.
Asshole
D.R. Horton's having a 30% off sale in Sacramento:
Realtors don't need anything higher than a high school diploma to turn their heads sideway and announce "this is turning into a NORMAL market".
Is this market becoming normal as the various "teams" of Realtors are mouthing off? Maybe it should be topic of a new thread!
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Bay Area Bubble Bloggers Admit Defeat, Throw in the Towel
Copyright © 2006 UnReality Times®. All Rights Reserved.
by Leslie Appleton-Young and David Lereah
The housing bubble blogosphere today was reeling from a shocking announcement made by an obscure but popular Bay Area Housing bubble blog, Patrick.net. The blog's overall tone is as bearish as any on the web ("SF Bay Area Housing Crash Continues" staunchly declares the site's link page).
Evidently, the site's main contributors have completely reversed course and now claim there is no housing bubble. "After so many months of denying the obvious, we had no choice but to call it quits and Face Reality," says Peter P, one of the blog's earliest threadmasters. "Agreed," says HARM, "it's painfully clear that we were dead wrong and housing is going to keep appreciating 15% a year forever, just like Gary Watts says it will."
The mood was mostly somber and contrite among the Patrick.net blogger gathering at the Marin Brewing Company in Larkspur, CA --a marked change from previous gatherings. "No matter how many risk-reward calculations I did, or how many times I crunched the numbers, I just plain old underestimated the power of 'it never goes down' and 'MIRAGE'," declared Randy H, one of the group's most talented market analysts. "Totally," agreed SQT, "Plus we completely ignored 'they're not making any more of it' and the lure of all those tax deductions."
Bloggers attitudes ranged from glum to confrontational. When asked to comment, Praetorian merely shrugged and began quoting G.K. Chesterton. By contrast, Surfer-X loudly encouraged the staff of UnReality Times to have sexual relations with farm animals. He then dipped his shoulder and spun Mr. Lereah around before storming out the door. "Don't take it personally", says Kurt S, "It's just 'X' blowing off a little steam. We're all a little disappointed, that's all."
Patrick Killelea, the site's founder, was not present and could only be reached by email. When asked to comment he wrote back, "Thanks, I'll post this to the links page!"
Of course, not everyone was upset. A few of the Patrick regulars, described as being moderately bullish, welcomed the news. "I think it's great," declared Jack. "Now I can start posting again about those Marin Positive Intangibles!" "It's wonderful news," agreed Mr. Right, "but it's too bad Marina Prime isn't here to share our glorious victory. This is really his payback for being banned and all. Oh, well, more free beer for us..."
"I guess there's nothing left to do except go out and get the biggest, nastiest neg-am loan on the planet and buy a stucco $hitbox before we're all priced out forever," mused HARM with obvious regret. "Imagine how much better off I'd be if I had bought when the price-rent multiple was only 35!".
#housing