patrick.net

that is the listing prices. i have seen houses listed for years at the same prices

An interesting thing I'm seeing is that houses people actually want seem to have bottomed. I've seen several listings go pending in literally 1 day. The reason for this is right now home values are artificially low. The comps over the past 6 months have been nothing but distressed sales. As soon as a normal house comes online at "market value" it's snatched up in no time.
This will put upward pressure on prices.

It's the houses with problems or bad locations that are just sit and the price drops most likely continue until some investor comes and swoops them up. That will put downward pressure on prices.

if you're looking for a normal house at artificially low prices now may be the time to do that.

The reason it Sheeple idiots cashing in on that 8K incentive.
The closer to April 30th the more desperate those that consider that 8K an Ace in the hole, will lace offers on houses as much as 30% more than they told them selves they could afford with out ending up, Upsidedown.

I bet by April 10th, it will be eroneously reported that RE prices are up 10-20%.

But wait until August when Mortgage applications will be lower than 12/07, but compounded 10 fold by the Foreclosed stock slated to hit the market by the summer.

More than you'd think. I agree it is a stupid reason, but everytime when we're outbid for a house, we hear the logic that lots of people are buying because of low rates and the mortgage credit. And we're not looking at $300k houses. You're logical; that's why it doesn't mean squat - other people aren't. Look at the stats for sales in Nov as people worried the credit was going to end, and then look at the stats for Dec - people rushed big time to buy before the credit expiration date and then sales dropped off.

I wonder if people realize there is an income cap to the credit too. To be buying such expensive houses, you'd think they'd be making more than the cap.

We just talked with a realtor this weekend at an open house (listed at $850k). She said it's been crazy busy lately. We asked why. Her response - people really want to take advantage of the credit. I mentioned it seemed kind of silly to spend $800k to get $8k. She kind of went quiet about that and switched gears to low rates. Maybe we're just told BS. I used to believe it was BS, but now that we're seeing plenty of houses sell, I think people really aren't that bright. I think for the $850k house, if they get list, then the buyer can't get the credit anyway (cap of $800k purchase now) - maybe we'll have to ask her about that and see what she says.

The 8K carrot is not what got my wife and I to buy last month. We are in north Orange County, CA. Prices on the homes we were looking at (between 350K-400K) are at the point that we can get what we wanted at a price we can afford. If they drop more it doesn't bother me because we plan on staying in this house for at least 10 years, if not much longer. To rent a comparable place we would be looking at 2000/mo, our mortgage (PITI) is 2600/mo.

The market is real strange anything sub-350K is being snatched up by investors and flipped. The house we closed on was 389K, we got the seller to to pay $7500 worth of closing costs and re-pipe the house. The amazing part, it wasn't a distressed property! One of the biggest issues we had most of the stuff for sale was short sales, poorly done flips and over-priced flips. There was no way I would pay 375K for a house that was purchased for 280K in a neighborhood that nothing is selling for more than 330K.

chrisw says

To rent a comparable place we would be looking at 2000/mo, our mortgage (PITI) is 2600/mo.

The market is real strange anything sub-350K is being snatched up by investors and flipped.

Makes sense to me. Even though the macro-economic stuff is still pretty scary, a rent of $2000/mo iimplies a house value of roughly $400K (= 2000 * 12 / 0.06)

So the flippers can buy them below $350K without too much fear, because even if they can't sell, the rental cash flow covers the long-term mortgage and expenses. That's not a good enough bargain to be really safe and doesn't make a cash-flow profit, but at least it's not overpaying like crazy the way it used to be.

An interesting chart:

http://www.elitetrader.com/vb/attachment.php?s=fd2457414c30cddcf291d8c3b5c74366&postid=2727542

From:

http://www.elitetrader.com/vb/showthread.php?s=fd2457414c30cddcf291d8c3b5c74366&threadid=190629

Now isn't a good time to buy a house, but it is certainly a good time to refinance one you already have, assuming you're still above water on it.

I'm no longer worried about pending rate adjustments or IO loans converting to P&I. My brother for one had his 5/1 ARM adjust for the first time last year and his interest rate went down. For now the property is worth less than his original acquisition price but his payment just dropped so he's happy keeping the place.

The real worry is how many people are on adjustable loans and how many of those people won't be able to keep their properties once rates go back up. For one, the banks losing out on the zero % money they can borrow from the gov't once the Fed raises the rates means they can't keep holding back the shadow inventory because they'll actually have carrying costs. For a second thing to ponder, those borrowers who get big upward rate resets in the next couple to few years are going to start defaulting and flooding the market again.

http://news.yahoo.com/s/ap/20100211/ap_on_bi_ge/us_foreclosure_rates/print

"There's a lot of foreclosures in the pipeline, and the number is going to continue to get bigger," said Patrick Newport, an economist with IHS Global Insight.

Last month's foreclosure activity followed a pattern similar to that of a year ago, when a double-digit percentage increase in December was followed by a 10 percent drop in January.

The dip in January's numbers may be due to processing delays by lenders during the end-of-year holidays, said Rick Sharga, senior vice president of RealtyTrac, which is based in Irvine, Calif.

"I don't think it's an early sign of the coming of the end of the foreclosure crisis," Sharga said.

A record 2.8 million households were threatened with foreclosure last year, and the numbers are expected to rise to between 3 and 3.5 million homes this year, RealtyTrac said.

Economic issues, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, subprime mortgages were mostly the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

That SJ Mercury article that is linked for today has a table showing larger drops in The Fortress towns than other nearby places.

I don't get it, I thought The Fortress was being propped up by wealthy immigrants and further buttressed by highly paid two-tech income families. Maybe all the wealthy immigrants and two-tech worker families who ever wanted to settle there already have so there's no more such buyers.

What do you think about it th_wong?

I don’t get it, I thought The Fortress was being propped up by wealthy immigrants

Is this sarcasm, are you taking the piss? Are you havin' a laugh?