patrick.net

Mark D says

affordability is all about monthly payment

That's...pretty facile. And I'm being kind because it's crissmuss.

There is the small world in which the market is evolving: rich people, low inventory, high rents, investors, cash, gov subsidies, maybe restrictions on supply.

And then there is the wider world looking from the outside: millennials living in their parents's basement, low mortgage applications, few new constructions, etc...

PVT Pyle would have made a great Realtor.

http://www.youtube.com/embed/8WmaAl6hPzw

Debt crisis began because interest rate has been set too low, which started by Greenspan. With cheap borrowing, every asset will be bid higher in price, and everyone becomes speculator. These high price are not "fundamental", they are "speculative".

The current low wages keep consumer prices low. Imagine when wages are increased, all prices will be skyrocket, all hell will break loose, I will be very worry. So it is better to keep wage low, to constraint peon's spending.

Call it Crazy says

Mark D says

people still post zerohedge articles? LOL

affordability is all about monthly payment which is still very low compared to the last few decades due to STILL-VERY-LOW interest rates. how about a real chart?

http://research.stlouisfed.org/fred2/series/COMPHAI

Hmmm...The OP was about NEW houses, not overall affordability in the US.... A bit of a difference....

Try this chart from the link in the OP:

*

Still a bargain. I'll take two.

APOCALYPSEFUCKisShostikovitch says

Jesus Christmas message is simple: Skull Fuck all REALTORS in My name or be cast into Hell with them!

Why do I get the feeling you don't like realtors.

Call it Crazy says

Strategist says

Still a bargain. I'll take two.

Nice... You'll finally move out of mom's basement!!

Even basements are shooting up in price. Get yours before they are all gone.

I bet this guy wouldn't want to go head to head in a "say some religious Pious Shit" contest.

All Jessie knows how to do is rattle his Race bait can, and spout off his fabricated injustices with newly invented words for the occasion while wearing a Purple suit, not much different than the Purple suit he wore the last time, he squeezed blood from a sermon.

Phil preaches the Gospel, that's a foreign concept to Jessie "Quick, somebody Gimmie a Fucking crisis" Jackson. All he likes to do is, moan about the plight of the colored folk, until some company pays him to shut up again.

I had a pet Realtor once. Would only eat red meat and small children.

It gnawed through it's chain and barred compound laced with garlic and started a firm locally, successfully embezzling and laundering millions. I am so proud of it.

Why do you hate ambition?

Realtors make the best kleptomaniacs.

Cover your goods in itching powder, invite some Realtors, and enjoy the show.

Pretty soon the Liberals are going to have to come to terms, our economy is a Bust.

For the American consumer.

Sure every American in the United States would love nothing more than to shell out $2000 a month for an insurance that either may or may not cover them when they need it. Because If I learned any thing in my 46 years living as an American. We will pay for some useless do nothing shit, given the popularity is enough for that useless shit. And provided the economy is as strong as our wants.

The popularity for Obamacare has been so great it got him elected twice. But thanks to Numbnutz lack of central critical thinking and creating policy that would create a strong work economy, people can't afford to play along with the good ole' American...

"Look what I got!" Game.

Or people would be wearing their Insurance policies with the price tags still on them. Buying them in bulk and eBaying them when there's a shortage.

Aren't you supposed to be in church this morning?

Or is spending all Christmas morning fixating on your hatreds a sacrament?

Well maybe they will turn into all-crash homes soon

If all cash sales are a bad sign for housing, then 100% loans must be good for housing. Wasn't it the 100% loans that caused the crash in the first place?
I love articles on housing written by comedians.

Tim Aurora says

The problem is that everybody wants at least a 3 bedroom house in the expensive part of the city. Move to Atlanta or Dallas, and the median prices are more like 2.5 times the median salary for a 4 bedroom house. Look at the home affordability in different cities

http://www.interest.com/mortgage/home-affordability-grade-paycheck-rating/

Wow!!!. San Francisco is the worst!!! Do you guys think this trend is sustainable in SF? or do you guys expect a correction?

All cash purchases don't necessarily mean "bad." for every buyer in 2006 there was a seller who would have enough to pay all cash today if they were smart and rented. there couldn't have been all buyers. most banks lost money in 2006 so where did the money go? the people who sold.

institutional investment is 14% of the purchases, foreign investment is 5%. the rest is from ordinary people like "fedwatcher."

Call it Crazy says

The OP was about NEW houses, not overall affordability

which is why it is misleading and everyone should look at the overall picture (my chart). new constructions are a tiny part of the housing market.

FunnyBayAreaBuyer says

or do you guys expect a correction?

real estate prices in NYC never "corrected."

interest are going to go up from here. historically speaking, 4.5% is very low.

the rise in interest didn't cause prices to drop so why wait?

i personally think prices go won't go up much next year if any. but they sure as hell won't go down with this level of low inventory.

Call it Crazy says

Why leave the cash for the kids, just spend their inheritance now

true - all these kids now that inherit houses that are free and clear are really suffering!!

Mark D says

the rise in interest didn't cause prices to drop so why wait?

It takes six months for interest rate rise to work through economy. The first 100 basis points on 10 year happened in June. Then after another quick 50 basis point rise, 10 year fell back to 2.5 and only now came back to 3.00. If 10 year stays at 3.00 we will only see the effects of that in the spring.

Strategist says

Wasn't it the 100% loans that caused the crash in the first place?

No. Securitization, i.e. Wall Street caused the crash. 100% loans had been around for a long time prior.

APOCALYPSEFUCKisShostikovitch says

Strategist says

Why do I get the feeling you don't like realtors.

It's not me. It's Jesus that is righteously condemning of REALTOR scum.

I thought Jesus sold real estate. If you can sell bullshit you can sell real estate.

Ceffer says

I had a pet Realtor once. Would only eat red meat and small children.

It gnawed through it's chain and barred compound laced with garlic and started a firm locally, successfully embezzling and laundering millions. I am so proud of it.

Why do you hate ambition?

My next realtor is gonna be a vegan.

ELC says

Strategist says

Wasn't it the 100% loans that caused the crash in the first place?

No. Securitization, i.e. Wall Street caused the crash. 100% loans had been around for a long time prior.

Hmmmm. Makes sense. Same would go for sub prime and negative amortization loans. They got carried away because of securitization.

Call it Crazy says

Strategist says

If all cash sales are a bad sign for housing, then 100% loans must be good for housing. Wasn't it the 100% loans that caused the crash in the first place?

I love articles on housing written by comedians.

100% cash sales by investors is a wonderful thing. In fact, I hope every house on your block gets sold to an investor who pays 100% cash.

I think you'll really enjoy living together with all those renters, and I'm sure the value of houses on the block will skyrocket!!!

Given a choice, I would prefer investors buy up every home on the block and rent it to high end tenants, rather than unqualified owners with no down payments buy them up and end up defaulting.
Wouldn't you?

The bankers already control all the national currencies.

How could Bitcoin possibly give them a tighter grip?

And if Bitcoin is fiat, then so is gold: The sole differences between the two are that gold is physical, and that Bitcoin transactions change the state of the Bitcoin.

Bitcoin should probably be gotten rid of - the ownership trail leaves it open to NSA snooping, and it wasn't designed to be more than an experiment - but an open-source currency is among the best friends anti-centralization supporters have ever had.

You just don't get it.
All cash sales is not the problem. Tight underwriting standards that deny loans to those who can pay is the problem. Once they ease off on their strict guidelines, more people will qualify for loans and the ration of cash buyers will fall with it.
Of course, you will find something else to whine about.

Analyzer says

Vicente says

Mr. & Mrs. HowMuchaMonth don't care about your stupid ratios, only that they are "wasting money on rent" and were offered a loan that they can keep up payments on if they go on a Ramen diet.

You forgot to mention if they can also get that HELOC to fund their Hawaiian vacation that would work great as well.

In order for home equity to be comparable to cash, the pad must be sold. Heloc is simply a glorified credit card although with much better interest rates and tax deductibility with the other side of the scale being that the pad is placed as collateral.

It's a scam, and it's illegal in China and many other countries. Somehow this scam is legal within US, so I'm just assuming some senators are on the take.

Call it Crazy says

Today's underwriting standards are fine... If you pay your bills and have a stable job with verifiable income, (and a down payment) you can get a mortgage....

It's the verifiable income that kills off most entrepreneurs as well as buyers with parents who are willing to help them out (rather than have them living at home). That leaves you with working stiffs. Working stiffs with good credit and a hefty down payment in this economy aren't going to sustain the market.

Stated income, no down payment, interest only loans, etc. performed fine for decades. Things will work fine as long as you don't let them get away with bundling a bunch of high risk loans with a few good loans and fraudulently rate it A+. Of course that's going to make everybody way too cocky.

Cash deals doesn't mean financing is not involved
It means mortgages are not. Investors have access to cash lines at lower rates than mortgages so a lot of the all cash deals are financed but not via mortgages
Or they are financed with public equity offering or other investor money

Phoenix is the market most likely to get hit hard as investors are leaving that market according to recent reports
If private homebuyers can't afford or get mortgages in phoenix that market could see another collapse

Call me crazy says:
Oh, to ease of on "strict guidelines", you want to go back to NINJA loans and people with 400 credit scores making minimum wage to qualifying for 600K mortgages.... Got it!!

LOL. I did not even mention ninjas.
Why do you think easing off on strict guidelines equates to NINJAs?
How about a sensible balance that is a win win for everyone?
Sub prime, stated income have always been around with high down payments. Let's stick to what works.

Call it Crazy says

ELC says

Things will work fine as long as you don't let them get away with bundling a bunch of high risk loans with a few good loans and fraudulently rate it A+.

What's that got to do with someone defaulting on their mortgage??

A lot. It changed who was approved. It changed the way underwriting was done (or not done.)

Call it Crazy says

Sure... No verifiable income and money loaned by family because the home buyer can't save up by themselves... Yep, that's a recipe for success.....

The system is set up now to suck savers dry. There's not enough savers left to only approve savers. Savers are a dying breed.

Call it Crazy says

ELC says

Stated income, no down payment, interest only loans, etc. performed fine for decades.

Ha Ha Ha... Spoken like a true realtor...

Spoken like someone who's been around for decades and has been actually paying attention. BTW, I train Realtors. I'm not a Realtor.

ELC says

Call it Crazy says

Sure... No verifiable income and money loaned by family because the home buyer can't save up by themselves... Yep, that's a recipe for success.....

The system is set up now to suck savers dry. There's not enough savers left to only approve savers. Savers are a dying breed.

Homeownership for purposes of primary residence should be a reward for those who were able to save. Besides, if parents want to buy a house for their children why don't they take out a loan in their own name? I am sure that it will be approved if numbers make sense. However, if all they do is help with downpayment, they can get a notarized note stating that downpayment is a gift and a lender can approve the loan for children if their income is sufficient. You can't really expect for them to be approved otherwise.

smaulgld says

Phoenix is the market most likely to get hit hard as investors are leaving that market according to recent reports

If private homebuyers can't afford or get mortgages in phoenix that market could see another collapse

do you have any sources for this?

Wow, bigmouth has 55 out of 61 posts on his own thread. That's got to be a patnet record. I've got a special right now on top of the line tin foil hat. These babies are the rolls royce of the paranoid set.