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post #1 of 78 (permalink) Old 09-25-2006, 11:19 AM Thread Starter
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Housing bubble becoming clear

I guess it finally has become a buyers market. Don't think prices will actually fall too much but any drop in pricing is Very rare and a big warning sign. Wish I was one of the lucky ones who bought at the bottom and rode this bitch to the top. In my area houses are not dropping in price but they sure seem to take a very long time to sell. Just 5 yrs ago there were bidding wars over homes by me, not unual for 20k over asking price


"NEW YORK - Stock prices turned lower Monday as the price of homes showed its first year-to-year median decline in more than a decade. In the first hour of trading, the Dow Jones industrial average fell 7.93, or 0.07 percent, to 11,500.17.


Broader stock indicators also drooped. The Standard & Poor's 500 index fell 1.44, or 0.11 percent, to 1,313.34, and the Nasdaq composite index fell 5.23, or 0.24 percent, to 2,213.70. Stocks had fallen Thursday and Friday on growing pessimism about the economy.

Wall Street has been eyeing the housing market nervously, worried that a decline in home prices could lead to a broad economic slowdown as consumer spending drops and workers in housing related fields lose their jobs. Stocks sold off after the National Association of Realtors reported that the median home price for the month was $225,000, compared with a revised $230,000 in July, marking the fist year-to-year median price decline since 1995. The drop was the second-biggest in the survey's 38-year history. "
http://news.yahoo.com/s/ap/20060925/ap_on_bi_ge/economy

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post #2 of 78 (permalink) Old 09-25-2006, 11:21 AM
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And see when I said over a year ago I feel like selling my house and renting for a few years till this market drops out everyone thought I was nuts. I wish I had.




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post #3 of 78 (permalink) Old 09-25-2006, 11:27 AM Thread Starter
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Quote:
Originally Posted by HDTony
And see when I said over a year ago I feel like selling my house and renting for a few years till this market drops out everyone thought I was nuts. I wish I had.
Yeah, but hind sight is 20/20. Don't beat yourself up too bad. I still want to kill myself over not taking loans out to buy stock in the .com boom.
You have a nice house that you will own one day, be very happy you are not a first time buyer right now with these inflated prices.
That would have been a killer move though

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post #4 of 78 (permalink) Old 09-25-2006, 11:28 AM
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So, what's the best thing to do: wait more or buy now? I am wanting to get a first home in 200-300K range and don't want to see a price drop few months after a purchase .
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post #5 of 78 (permalink) Old 09-25-2006, 11:41 AM
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Quote:
Originally Posted by 7tex
So, what's the best thing to do: wait more or buy now? I am wanting to get a first home in 200-300K range and don't want to see a price drop few months after a purchase .
Wait until you can get a decent loan, save up a little longer. This area hasn't seen the huge price increases seen in California and East Coast areas. It's been slightly above normal, but not the huge swings out there. Buyer's market is what it says, good time to buy if you are looking.

My town hasn't seen any 'housing bubble' stuff, but I live in a shitty school district and not so good neighborhood.

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post #6 of 78 (permalink) Old 09-25-2006, 11:47 AM
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Quote:
Originally Posted by HDTony
And see when I said over a year ago I feel like selling my house and renting for a few years till this market drops out everyone thought I was nuts. I wish I had.
Scary when we think alike, huh?

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post #7 of 78 (permalink) Old 09-25-2006, 11:50 AM
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I am hoping it slows down even more. Next spring I will be looking for a place to get into for the end of the summer. Saving my pennies as we speak.
post #8 of 78 (permalink) Old 09-25-2006, 11:54 AM
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Saving my pennies also. I refuse to pay over $350K for a 1200 Sq/ft house in my area, when they are actually worth only like $200k.

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post #9 of 78 (permalink) Old 09-25-2006, 11:57 AM
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Quote:
Originally Posted by Grover
Wait until you can get a decent loan, save up a little longer. This area hasn't seen the huge price increases seen in California and East Coast areas. It's been slightly above normal, but not the huge swings out there. Buyer's market is what it says, good time to buy if you are looking.

My town hasn't seen any 'housing bubble' stuff, but I live in a shitty school district and not so good neighborhood.
Thanks! I guess that's what I'll do - hold out a little longer.
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post #10 of 78 (permalink) Old 09-25-2006, 11:57 AM
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Quote:
Originally Posted by 7tex
So, what's the best thing to do: wait more or buy now? I am wanting to get a first home in 200-300K range and don't want to see a price drop few months after a purchase .
Smartest thing you can do right now is put your money in something that gives you some interest but can be liquid, then just wait for a while and watch the market. Prices are going to come down some and you will get in at a great price.

Heres a question for some of you financial guys. We havent seen anything like this in years so I have no idea, but will this have an effect on home mortage rates? maybe dropping to entice people into buying etc? Or will they go up due to not as many people buying?




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post #11 of 78 (permalink) Old 09-25-2006, 11:57 AM
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The hidden danger is when those w/ HELCs (or even 100% mortgages) are extended right at home value and the prices ratchet down... It's basically a 'margin call' at that point.

Woops.

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post #12 of 78 (permalink) Old 09-25-2006, 11:58 AM
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Quote:
Originally Posted by Arch
The hidden danger is when those w/ HELCs (or even 100% mortgages) are extended right at home value and the prices ratchet down... It's basically a 'margin call' at that point.

Woops.
Exactly, of course thats if they want to get out, if they stay there and keep paying it down they are fine. or when the market comes back up they are fine.




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post #13 of 78 (permalink) Old 09-25-2006, 12:01 PM
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Quote:
Originally Posted by HDTony
Exactly, of course thats if they want to get out, if they stay there and keep paying it down they are fine. or when the market comes back up they are fine.
You're thinking of someone w/ equity and it getting smaller.. I'm talking about it lopsiding or breaking the line of 'margin' as set forth in the credit agreement.

The creditor will want that equity/debt ratio trued up (not sure if they can on a mortgage, but they can on a line of credit).

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post #14 of 78 (permalink) Old 09-25-2006, 12:06 PM
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Alot of people will be hurting when they try to sell there house for 30 grand less that what they have it financed for.
post #15 of 78 (permalink) Old 09-25-2006, 06:35 PM
 
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everyone panic... its all coming to an end... your all nuts... any one that says it will be better again in early 2007 is nuts...

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post #16 of 78 (permalink) Old 09-25-2006, 06:37 PM
 
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it has already been confirmed that we will see a loss....

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post #17 of 78 (permalink) Old 09-25-2006, 06:42 PM
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Quote:
Originally Posted by zeusrotty
early 2007 we will be back to a bettergain. count on it.
Ok......


but if its not, we are kickin your ass




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post #18 of 78 (permalink) Old 09-25-2006, 07:54 PM
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All I can say is there are a whole lot of houses on the market right now. They are selling, but most sellers are dropping the price first. On the other hand, I can't believe how shitty the condition of the houses are that some people try to sell. C'mon, spend a day or two cleaning the place up at least. In this market, that could be the difference between selling your house or waiting for months.

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post #19 of 78 (permalink) Old 09-25-2006, 08:14 PM
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House prices are coming down, but interest rates are going up from a year ago. You either pay more for a house with inflated pricing like before, or pay 1-1.5 points higher on a loan on a house whose price is down 10%, like now. So it's pretty much a wash IMO. Here's an example.

300K loan @ 5.5% for 30 years = 1703.37
270K loan @6.5% for 30 years = 1706.58

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post #20 of 78 (permalink) Old 09-25-2006, 08:34 PM
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If you are interested in buying a home, keep looking. Some people have to sell their homes for various reasons and you could find a steal out there. Especially if there are 180 day market averages. The tax deductions and eventually appreciation will outweigh any benefit from waiting.

People that may get hit hard are selling for 650k and up now.

Mortgage rates are tied to the bond market and will not decrease just because home sales are down. Mortgage rates typically drop when the stock market suffers. Our highest mortgage rates during the last 10 years were during the Stock Market boom of the late 90's




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post #21 of 78 (permalink) Old 09-25-2006, 09:04 PM
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Quote:
Originally Posted by HDTony
And see when I said over a year ago I feel like selling my house and renting for a few years till this market drops out everyone thought I was nuts. I wish I had.
I seem to remember everyone thinking I was crazy for real as well

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post #22 of 78 (permalink) Old 09-25-2006, 09:30 PM
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I just bought my townhouse in May. Got a good interest rate, and I thought a pretty good price on my house. Just had it appraise at 18K more than I paid for it. Got it as a previous rental property. Owner wanted out of a partnership, and found it at the right time. Now I don't rent, and love where I live. Sometimes that is enough, you know?
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post #23 of 78 (permalink) Old 09-25-2006, 09:37 PM
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The only people I see being effected by a housing market slow down is builders and realtors. If you are already a home owner and want a new home you can get a "good" price now, but your home will also sell to someone who is getting a "good" price. If the market is up your house appreciates, but if you want to buy something else your also paying a premium for your new home. It's all the same, just the numbers change. I don't know maybe I'm missing something, but it doesn't seem to make much difference. Prices of homes will always go up, unless all of a sudden there are less people in the world or more land.

I see this as a "first time buyers market", if this buyer can actually afford the current prices.

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post #24 of 78 (permalink) Old 09-25-2006, 09:43 PM
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I think the high end of the market will suffer the most......


Just my Opinion.


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post #25 of 78 (permalink) Old 09-26-2006, 12:48 PM
 
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the thing is, rates have been dropping the last few weeks again because the jobs reports and manufacturing reports... ect... whe we see unfavourable reports from wall street, all the investors decide to go with the safe bet... and that is bonds. when they buy more bonds, our mortgae rates go down... they really havent suffered all that much since they were at there lowest, which was 5% and that was for like a day. we are currently back down to 6%ish from a few lenders, and we keep getting negative reports from wall street. there is actually even talk of more recession, which will make the fed have to cut the rates even further... if you want to buy then buy... you are still getting an exstremely low rate historically speaking, both long term and short... i mean seriously... we are only 1 point higher than the lowest we have ever seen on a 30 year fixed!!!!
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post #26 of 78 (permalink) Old 09-26-2006, 12:51 PM
 
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Quote:
Originally Posted by BLARNEY
I think the high end of the market will suffer the most......


Just my Opinion.


Tom

yes and no... those are the people that have investments outside there homes and make money every time they take a breath... 1 point wont kill them on rate. and all of the homes downtown are still selling fairly well... a little slower yes, but values are still there.
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post #27 of 78 (permalink) Old 09-26-2006, 12:51 PM
 
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Quote:
Originally Posted by Dave13
I just bought my townhouse in May. Got a good interest rate, and I thought a pretty good price on my house. Just had it appraise at 18K more than I paid for it. Got it as a previous rental property. Owner wanted out of a partnership, and found it at the right time. Now I don't rent, and love where I live. Sometimes that is enough, you know?


exactly
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post #28 of 78 (permalink) Old 09-26-2006, 12:53 PM
 
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Quote:
Originally Posted by Crazy
I seem to remember everyone thinking I was crazy for real as well


except the market hasnt dropped out... especially not here...??? we havent gone backwards in value yet, but it could happen .

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post #29 of 78 (permalink) Old 09-26-2006, 12:54 PM
 
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Quote:
Originally Posted by HDTony
Ok......


but if its not, we are kickin your ass


if im wrong i will help you, cause i'll be broke.
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post #30 of 78 (permalink) Old 09-26-2006, 12:56 PM
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Good article in the Tribune today...

http://www.chicagotribune.com/busine...ck=1&cset=true

Last edited by Keyhole; 09-26-2006 at 12:58 PM.
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