There is a Real Estate crash coming

[fett]

As of last week, they could afford to build it. If those builders took out short term bridge loans, they have to re-up if the prop don't sell. At way higher rates.I am not trying to be an ass. I am trying to let you know how all this shit works.

[Spivonious]

Good thing I locked in my rate a few weeks back. I got a house that would have been close to $250k last year for $195k + $3500 credit to fix it up.

I hear you about Maryland. My wife is from Bel Air and they just can't stop building those fugly three-story townhouses for $350k.

[MikeStrat]

I hear you about Maryland. My wife is from Bel Air and they just can't stop building those fugly three-story townhouses for $350k.

Yeah man! MD is a tough state for first time home buyers. In Annapolis where I am, you can't touch a decent single family house for less than $600K. And that price gets you a fixer upper. I understand the west coast is the same or worse.

[danastas]

My younger bro is on top of this business. The subprime guys like Countrywide are in trouble. His business never dealt with sub loans, and he is still seeing really good business in real estate. It only hurts him now that some of the secondary market that he's dealing with are getting edgy because they've been burned by bad deals they dabbled in. But that just means liquidity is drying up because someone's sphincter just got tight. The big dogs did not expose themselves that badly.

If inflation and interest rates were to rise, well then it would be a calamity, because even the big companies did a lot of interest only deals.

[ken]

I thought this thread was going to have pictures of Fett driving a car into his new house.

[RacerX]

He doesn't own a car heheheheh

He gots a minivan man

[ken]

He doesn't own a car heheheheh

He gots a minivan man

He doesn't really have a house either, eh?

[RacerX]

Well, yeah, but that would've been "piling on"

[xenophobe]

Real estate crash? Where? Not here. Nope.... definitely not here. :p

[pro-fusion]

That's too bad I won't be in the market to buy anything for another 5 or 7 years. Can the crash wait for me?

It's going to take about 3-5 more years for this real estate crash to unwind itself, most likely. The run-up in prices was huge and unsustainable, but it takes a long time for the system to work through all of the foreclosures that will drive the prices back down. After the last California real estate bubble crashed in 1989, prices didn't start climbing again until about 1996 in most places, and the average housing price didn't reach 1989 levels until something like 2001 or 2002. So you've got awhile to save up. That's what I'm doing.

[Jason1212]

I have been waiting for this for the last three years. My wife did property appraisals from 2000 to 2005. When the Fed lowered the rate loan officers started frothing at the mouth. They went after every new home buyer and any owner with equity. They pushed for irrational property values to increase loan amounts and in so doing increased their own commissions. Those that went with floating rates are now unable to refi at a lower rate because their property was so over valued. There are neighborhoods here in TX with many forclosed empty homes falling into disrepair. The burden for the upkeep is falling on the city and residence who want to save what equity they have left. It will get pretty interesting for sure and like the fall out of MCI and Enron it will be interesting to see who if anyone gets charged for any of it.

[Rich#6]

I am trying to sell my house right now. I am having to take a lot less then what I would have gotten back in November. As I post this I have buyers at the house with there inspector. I hope the guy doesn't find too much wrong. I am being offered $182K . I should be getting over $200k. Oh well I paid 96k in 98 and am buying a house dirt cheap (a family fixerupper)

[fett]

The point of my thread is you know things are no so good when the "News puds" have to find a "Bright spot" to show that the world is not ending. It doesn't matter that I live here in a trailer.

[Chad]

I got a 15 year 4.625% fixed mortgage on my house. I plan on being here darn close to 15 years.

Question: I don't follow this kind of thing a whole lot, but why on Earth would a person even *consider* a variable rate when rates were around 5%? With rates that low, they were much more likely to go up than down. Variable just didn't seem to make much sense?

[VinceV]

I got a 15 year 4.625% fixed mortgage on my house. I plan on being here darn close to 15 years.

Question: I don't follow this kind of thing a whole lot, but why on Earth would a person even *consider* a variable rate when rates were around 5%? With rates that low, they were much more likely to go up than down. Variable just didn't seem to make much sense?

t
People were considering variable rates, bcause that is what they qualified for when they bought or they just don't know any better. Never under estimate, what people don't know.

We have a family business with over 50 employees. Many making just above California minimum age which is $7.50 an hour. 2 years ago right before the market started to go south, we had 2 employees buy houses. 1 bought a $550,000 and the other a high 400k house. We were like How the Fuck are you paying for it, you and your husband make less than 30k a year! Needles to say a few years ago they gave anyone a loan. A famous story is about a loan they gave to a man in Vegas who bought a Million dollar home with a $1000 deposit, yes 1k. The catch was variable APRs or interest only 30 year loans. People were so desperate to get in and make money, that they never thought what would happen if it all stopped. Well many people are screwed now.

That is why you're going to see the market fall apart, if it hasn't already started where you are. I see it here all around me in L.A.. Houses sitting for sale for close to a year now, when those same houses sold within days the 1st or 2nd time they went up for sale years ago. Half built homes that haven't had any construction done on them in almost a year.