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| 2008/2/26-3/4 [Reference/RealEstate] UID:49269 Activity:nil |
2/26 Rejoice renters and bitter comrades who missed out! Home price
index drops 8.9%, the largest drop in 20 year history!
http://www.msnbc.msn.com/id/23350937
\_ GLOBAL RECESSION IS HERE! Prepare to be laid off soon. As
for savers... good for you! -Recession Swami
\_ And you'll still need two mortgages and a spotless credit rating
to afford a house in the Bay Area.
\_ But Bay Area offers unheard of opportunities to get super
rich from the dot-com companies!
\_ For some. But really it is about base salaries here being
almost double most other places. For anyone who bought a
reasonable house within their price range without some
weirdola non-standard mortgage (98% of people), none of this
housing stuff matters much, if at all.
\_ You need spotless credit almost everywhere right now.
\_ Two mortgages or two incomes???
\_ i think he's talking about piggy-back mortgages (which are
becoming much less common now in favor of 20% hard cash)
\_ I wouldn't even think about buying unless I had 20%
saved as a down payment.
\_ It's that kind of thinking that kept a lot of people
out of the housing market when it was cheap. I thought
the same way and was busily trying to save $60K on
an entry-level salary and meanwhile the years
ticked by: 1997, 1998, 1999, 2000. Around that time
I got a clue and realized that I could get a loan
and afford a payment with the $25K I had so what the
hell was I waiting for? I bought in 2001. If I was
still saving I think I'd have $100K and it *still*
wouldn't be 20% and my mortgage would be higher.
wouldn't be 20% and my mortgage would be bigger.
Just buy when you can afford the payment and don't
worry about the price so much. It's a bad way to
buy a lot of things, but a good way to buy real estate.
I could have bought back in 1997, had a better
standard of living, saved more money on my house,
and been 4 years closer to paying it off had I not
been worried about that mystical 20% down.
\_ Yeah, but that is just because your "saving" period
was during a time when real estate prices happened
to be rapidly appreciating. If you had 10% down now,
you would probably be better off waiting until you
had 20% down. In general, it is a bad idea to buy
more than you can afford, but I agree if you can
get a bank to sign the paper work, can afford the
monthly payment, and have 6 months worth of expenses
in the bank, you can buy with even 0% down now. I
would not do it, though.
\_ My point is that if you can comfortably afford to
buy now (for all values of now) then do it.
Maybe you can buy cheaper later. Maybe you
won't. There's no time like the present. That
can't. There's no time like the present. That
20% is not magic and it's unrealistic in markets
like urban CA if you're a first-time homebuyer.
You will waste a lot of time trying to go
from 10% to 20% down for no good reason. If
you would rather wait to buy for other reasons
that's something else, but simply waiting to
buy until you gather 20% down is not a good reason.
buy until you gather 20% down is not a good
reason. |
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| www.msnbc.msn.com/id/23350937 NEW YORK - US home prices dropped 89 percent in the final quarter of 2007 compared with a year ago, Standard & Poor's said Tuesday, the steepest decline in the 20-year history of its housing index. "We reached a somber year-end for the housing market in 2007," said one of the index's creators Robert Shiller. "Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. The S&P/Case-Shiller home price indices, which include a quarterly index, a 20-city index and a 10-city index, reflect year-over-year declines in 17 metropolitan areas with double-digit declines in eight of them. The 10-city index also set a record annual decline of 98 percent in December, while the 20-city index dropped 91 percent. Home prices also plunged 54 percent from the previous three-month period, by far the largest quarter-to-quarter decline in the index's history. The previous record was the revised 18 percent drop in the third quarter of 2007. The quarterly index tracks prices of existing-family homes nationwide compared with a year earlier. A government report Tuesday said US home prices posted their first annual decline in 16 years. The Office of Federal Housing Enterprise Oversight said nationwide prices dipped 03 percent in the fourth quarter from the year-ago period. The OFHEO index is narrower in scope and is calculated using mortgages of $417,000 or less that are bought or backed by Fannie Mae or Freddie Mac That excludes properties bought with some of the riskier types of home loans. This record will be shattered by subsequent declines," said Peter Schiff, author of "Crash Proof: How to Profit from the Coming Economic Collapse" about the S&P/Case-Shiller report. "We will experience the most substantial decline in history because before this we had experienced the most unprecedented rise in US real estate history." After 14 years of rising prices, the housing market is unwinding, taking victims from Main Street to Wall Street. Homeowners are losing their houses to foreclosures at an increasingly rapid rate as interest rates on home loans adjust higher and declining values eat into equity. said Tuesday that the number of homes facing foreclosure climbed 57 percent in January from the previous year and more lenders are being forced to take possession of homes they couldn't dump at auctions. Investors are taking huge losses to rewrite the declining value of securities backed by mortgages. Bond insurers also are taking a hit and could have trouble paying back bond holders if default levels soar. Stalled by swelling inventories and weak demand, homebuilders have been recording record losses quarter after quarter. Economists worry the housing slump will plunge the broader economy into a recession. The economy grew an anemic 06 percent in the fourth quarter. Earlier this month, Congress passed a $168 billion rescue package with provisions aimed to help beleaguered homeowners refinance into more affordable loans. The Federal Reserve also has aggressively slashed interest rates to spur growth. On Monday, the National Association of Realtors said sales of existing homes in January fell to the lowest level in nearly a decade while the median price for a home slid for the fifth straight month. The Commerce Department is set to report on January's new home sales Wednesday. This material may not be published, broadcast, rewritten or redistributed. |