After today's report, no one mentions median price of home is up 17% yoy. I missed part of a segment on 60 minutes on Sunday but did catch the part about a homebuilder saying something to the effect that homes he's been building for the past 20 years have been increasing from an aveage of 5000 sq ft to over 10,000 sq ft today. No real surprise, take a look at rent prices, no one wants to live in small dwellings. If anyone did see it, that bathroom was unreal. What happned to the rising rate environment? I'll have to find the "crashing the bond market" thread to post something amusing.
Just curious,if a home's value drops to say 300k when the mortgage still owed is 350k and the house goes into foreclosure,does the lender just take the 50k loss?
Yes. However I keep coming back to two points in the residential and muti-unit markets: (1) Record low numbers of affordability in boom areas like So. Ca. (2) Multi-units underwater in many places - particularly So. Ca. if short term appreciation is not included. This can not go on indefinitely and without any type of analysis beyond these points, the conclusion must be that valuations and thus prices must reduce. My opinion still is that we are now either in a housing price lull- appreciation will stop for a year or two - or we are at the beginning of a correction - prices on residential and small multi-units will reduce over the next three to five years. I could be completely wrong though..... Why do you think that this will not happen - What is different this time ?
Gotta love it when prices and inventory increase rapidly together...a nice pop will inevitably occur. I will be ready to add some support to the real estate market when it happens!
I think we go sideways in the coming years where some areas will continue to appreciation while others will see people leave due to high costs thus bringing down prices. Do all housing booms go bust? No. For the 2 busts on record, Texas (80's) and Cali (90's), the employment situation can be faulted for it. Southern Cali may be the Nasdaq of housing whereby the crash is coming. I don't know about that area or how you people inflated things so much. On a more general scale, the idea of a nationalwide bust seems absurd given interest rates, unemployment rates, etc.. Just my take, i could be wrong.
New Home Sales Hit Record Level in Oct. The Commerce Department said that sales of new single-family homes shot up by 13 percent last month, the biggest one-month gain in more than 12 years. The increase pushed sales to an all-time high seasonally adjusted annual rate of 1.42 million units. --------- Existing home sales fell while new homes soared. Interesting divergence. I think this has been going on for a year now.
Just curious,if a home's value drops to say 300k when the mortgage still owed is 350k and the house goes into foreclosure,does the lender just take the 50k loss?
http://news.yahoo.com/s/ap/20051129/ap_on_bi_go_ec_fi/economy http://news.yahoo.com/photo/051129/...N0POL1v24cA;_ylu=X3oDMTA3bGk2OHYzBHNlYwN0bXA- Meanwhile, the Commerce Department reported that sales of new single-family homes shot up by 13 percent last month, the biggest one-month gain in more than 12 years. The increase pushed sales to an all-time high 1.42 million units at a seasonally adjusted annual rate. The increase in home sales confounded analysts who had been predicting that new home sales would decline by 1.8 percent, reflecting continued increases in mortgage rates. It was possible that the unexpected surge reflected a final rush by buyers to get into the market before mortgage rates climb higher.
Lenders have insurance to cover any deficiency that is paid by borrowers if LTV >80%, PMI. If the loan has no PMI, then either coverage has to be bought elsewhere to hedge risk or the lender eats the loss.
How many of these sales were already in the pipeline and recently completed. That will continue to skew the numbers until the pre-purchased inventory is gone. If those same people were to go and buy today, IMHO, the numbers would not be nearly as strong. I read in the local ads this week at least 7-10 classifieds with owners/speculators in "must sell" situations with 0 down, etc. to get rid of new construction homes in the area.