US Housing Market Faggotry

[NAD]

Anyone following this bullshit lately? Even with a jobswitch I'm still in the same industry, therefore very much entrenched within the whole mess. Part of my job is to keep an eye on this shit daily, so I know all kinds of fuck about the whole shit, and god damn if that isn't one regrettable fatbitchfuck away from an "I told you so" at the local pub next week.

How are you homeowners holding up? I know a few of you bought in within the last few years, no 2/28 loans I hope. How about you renters? I'm still content where I be. Wish I could have bought in around 2001, but my ass was still part time at $12/hour then.

Two things: I still rent + Whipping Post just came on.

Prediction: October is going to SUCK.

 

[lurch70]

all i know is if you look around on realtor.com ... there are major metropolitan areas of the country where you can buy decent size 3-4 bedroom houses for about 50-70K ... if you have money the next few months are ones I would use to do some research for investments. which is what I plan to do with someone I met recently that is knee deep in real estate know-how.

NYC is really not affected much by this, the market here is still booming like heck. Buildings coming up and selling out at insane prices ... but drive 2 hours into the state and deals galore and plentiful.

i hope everyone here is doing well and not in mortgage trouble ...

 

[Russell]

We need something like this in the UK, although I doubt it will happen. In London the average house is now £350,000, and going up by £35,000 a year (a 254% increase in the last decade). A 3-4 bedroom house will very rarely go for under 600,000 in most parts of London now. The only chance anyone in my generation will have to be able to afford a property - of any kind - is to either make a lot of money, or for the housing market to cool off considerably.

EDIT: I just realised how loaded JK must be still owning a house in London. I bet he's made over £100,000 from it in the last five years in terms of its value.

 

[dorian gray]

What are you guys talking about? Are you referring to all the fucking retards who bought houses with 100% financing and interest only mortgages? Or are you discussing the relative "cooling" of the market?
Nothing irks me more than when it becomes "acceptable" to be stupid. For example, every article I read about loan default describes the lenders as "predatory" and the borrowers as poor hapless innocents just trying to get ahead.
The sad fact is that these morons are responsible for the increasing interest rates because they're not feeding enough funds back into the economy. So when someone like me who puts 20% down wants to buy a reasonably priced home, I get to pay a higher interest rate. Meanwhile, the defaulters just go out and buy more shit on more credit. Fuck them.

 

[cthulufhtagn]

i think i speak for a sizeable contingent of rc when i say that this thread: way over my head. metal chix beer poop goddammit, the four cornerstones of royal carnage.

in that spirit, i drank too much beer last night, just took a big poop, am thinking about deathspell omega, and i can smell my gf cooking brekkfist downstairs so fuck you guys.

 

[JayKeeley]

Someone elaborate on what's going on in the market because I plead ignorant. I'm a home owner with a 5 year fixed arm at 4.625%. I re-financed when the interest rates dropped to 1960's rates a few years back.

Now my 5 year arm is coming to its end and I suppose I better consider refinancing again because I'm about to hit variable rate interest. I'm so out of touch, what are the lowest fixed rates these days?

EDIT: I just realised how loaded JK must be still owning a house in London. I bet he's made over £100,000 from it in the last five years in terms of its value.

I can't complain. It's being rented out through a letting agency these days to some working couple. The first three months I made squat because I had to invest some monies into fixing stuff up but now things are on the up.

I suppose I better start looking into a third property at some point. East Europe is the way to go. Croatia is going to explode in the next 24 months.

 

[Russell]

I can't complain. It's being rented out through a letting agency these days to some working couple. The first three months I made squat because I had to invest some monies into fixing stuff up but now things are on the up.

I was more thinking the income from the value of the house than from renting. It's in London so the house will pretty much being going up £35,000 a year in sale price. Admittedly it's not cash you can get your hands on now, but in overall terms I'd imagine it must be making you a lot of money.

 

[lurch70]

Someone elaborate on what's going on in the market because I plead ignorant. I'm a home owner with a 5 year fixed arm at 4.625%. I re-financed when the interest rates dropped to 1960's rates a few years back.

Now my 5 year arm is coming to its end and I suppose I better consider refinancing again because I'm about to hit variable rate interest. I'm so out of touch, what are the lowest fixed rates these days?

.

basically this is what is happening due to all the ARM's coming to term. If I were you I would into refinancing asap.
http://money.cnn.com/2007/07/31/rea...losures.reut/index.htm?postversion=2007073110

http://money.cnn.com/2007/07/25/rea...ubprime_ills/index.htm?postversion=2007072515



and its leading to THIS:

http://homes.realtor.com/map/search...fad8e&lid=1086169991&lsn=6&srcnt=17838#Detail

and THIS:

http://homes.realtor.com/map/search...55e44&lid=1081793817&lsn=4&srcnt=16952#Detail

and go to that site for investment bargains galore!

Europeans taking advantage of the weak dollar can score big time investing for the long term.

 

[dorian gray]

You do realize that refinancing often requires closing costs in keeping with your original purchase. You're talking $5000 or so just to get yourself a new interest rate. They are now 7%.
My point is that the VAST majority of people with these non-traditional loans don't have the $5000 to close. They don't have the extra $200 a month their mortgage is going to cost them when they're term runs out.

Credit is probably the worst idea of all time.

 

[dorian gray]

their

 

[JayKeeley]

I was more thinking the income from the value of the house than from renting. It's in London so the house will pretty much being going up £35,000 a year in sale price. Admittedly it's not cash you can get your hands on now, but in overall terms I'd imagine it must be making you a lot of money.

True, it's no liquid asset until I sell but yes, the property value has sky rocketed over the last decade!! It's nuts! I mean, I wouldn't even pay that much for my house.

 

[JayKeeley]

You do realize that refinancing often requires closing costs in keeping with your original purchase. You're talking $5000 or so just to get yourself a new interest rate. They are now 7%.
My point is that the VAST majority of people with these non-traditional loans don't have the $5000 to close. They don't have the extra $200 a month their mortgage is going to cost them when they're term runs out.

I suppose you could just add the closing costs to the new loan. But yeah, there are other ways they'll get you, such as penalty costs for closing out early.

My predicament is that my 5 year fixed is 4.625% and it ends in March 2008. When I got this and closed out with the lawyer, her eyes popped out her head. She said she'd never seen such a low APR.

So here I am, happy with my 4.625% but knowing that I'm on the verge of hitting the ARM which is much higher. Thing is, even if I refinance and get another 5 year fixed rate, it's STILL going to be higher than 4.625%.

So whatever I do, my monthly payment will go up either way next March '08. I suppose with a higher interest rate, I'll get a bigger tax rebate?

 

[Russell]

It's nuts! I mean, I wouldn't even pay that much for my house.

Dude, tell me about it, just look at it from my perspective - at this rate, unless I make some very decent money (i.e. after the PhD go into oil or something ghey like that), there's no way in hell even with my salary combined with Anna's we would be able to afford our own place in London. Even 1 bedroom flats are well in excess of £200,000 now.

That said, could be worse, one bedroom flats outside Imperial go for £2,000,000 minimum

 

[JayKeeley]

Dude, tell me about it, just look at it from my perspective - at this rate, unless I make some very decent money (i.e. after the PhD go into oil or something ghey like that), there's no way in hell even with my salary combined with Anna's we would be able to afford our own place in London. Even 1 bedroom flats are well in excess of £200,000 now.

That said, could be worse, one bedroom flats outside Imperial go for £2,000,000 minimum

You can try doing what Amman recently did. He got himself a shared mortgage with the council. For his 300,000 property, he only needs to mortgage 150,000 and the other half is covered through rent. So essentially, he owns the place, pays his mortgage PLUS a couple of hundred in rent each month.

Now, if the property value increases, he can sell and make some positive equity, pay off the shared mortgage and pocket the remaining profit. I mean, it's not great but it gets you on the property ladder.

He bought in Putney by the way, in a new development right by the Thames. He walks over Putney Bridge to get to the tube station. It's pretty damn cool.

 

[Russell]

You can try doing what Amman recently did. He got himself a shared mortgage with the council. For his 300,000 property, he only needs to mortgage 150,000 and the other half is covered through rent. So essentially, he owns the place, pays his mortgage PLUS a couple of hundred in rent each month.

Now, if the property value increases, he can sell and make some positive equity, pay off the shared mortgage and pocket the remaining profit. I mean, it's not great but it gets you on the property ladder.

He bought in Putney by the way, in a new development right by the Thames. He walks over Putney Bridge to get to the tube station. It's pretty damn cool.

This sounds good, it's nice to know there are some things you can do about it - not anything I have to worry about right now, obviously, but at some point information like that could be useful.

That's great for Amman though - that's a really nice area, I used to live up Putney hill. Down by the river there is insanely expensive but really very nice. Sounds cool.

 

[dorian gray]

Is London the most expensive city in the world? I thought I heard that somewhere.
JayKeeley: 4.625 is ridiculously low. Expect to get 7% minimum now. If you can afford the difference, then no big deal. My point was that most people can't and they're causing a ruckus in the housing market by foreclosing.

 

[Russell]

Is London the most expensive city in the world? I thought I heard that somewhere.

It's up there with Hong Kong, Moscow, Tokyo, Osaka, and Seoul; the top five change around a bit. Just depends what criteria people use, as London is expensive for property, but living expenses are lower (just), than places like Oslo, for example. I don't think the strenngth of the pound helps particularly in comparison at the moment

 

[Reign in Acai]

I know jack shit about this stuff, but am fairly intrigued. Question... Wouldn't the foreclosures help the market? You know, send a signal to the cunts behind this gouging that the average citizen can not afford what they are getting in to?. Or do they just end up getting their money regardless?!?! Enlighten me oh precocious ephors.

 

[dorian gray]

Jerry, I'm no expert but my understanding is the interest rates correlate directly with inflation. Put another way, when people start accumulating too much expendable income, interest rates rise. The economy can't handle everyone having all this consumer power, so the biggest-ticket item - housing - becomes more costly. Someone has to be kept down.

Of course, the base price of a house has to do with desireability and demand. Supposedly, there is a never-ending demand for housing (I've never been able to figure this out, considering all the sources I've come across claim America's population is not only growing older and closer to death, but we are having less children).
So there is competition for these desireable houses and the price goes up to reflect demand. In response to that, lenders decided to try and seduce people of lesser means to buy into these markets by releasing loan products that don't make much sense. An adjustable rate mortgage, 100% financing, interest-only, etc. Thusly more and more people were able to "afford" these houses. Turns out (surprise!) they really can't. In fact, some of them can't even afford to pay the interest.

An interesting side-effect of this problem is the lack of savings. I wish I could quote the actual number but basically, no one in America has any savings. When everyone is putting every penny into a mortgage and two new cars every two years, there's nothing left. What is going to happen to my generation when it comes time to retire disturbs me. Our children are already going to be paying for Bush's war for the rest of time. Are their taxes going to pay for our old asses too?

 

[Reign in Acai]

I started to place 40% of my income every month in to savings. This is a much wiser route than going out and purchasing a 40k car, like some of my buddies who pay 550 in car payments, 300 in full coverage insurance, and 200 on gas to run their V8 engines. Good fucking Christ, stop trying to impress your neighbor and think about building a safety net in case times turn to shit. A particular buddy who lives pay check to pay check, and who can barely afford to eat, has recently been awarded a $1600 charge to repair a fucked up drive shaft on his movable mansion. Where will he come up with these funds? No clue. I myself drive around in a shitbox, with the comfort of mind in knowing that I could total the vehicle, and still not have a care in the world.