Housing Rolling Along 2

http://www.latimes.com/business/la-fi-poll8mar08,0,6136361,full.story?coll=la-home-business
“More than one quarter of those who have adjustable-rate mortgages say they aren’t sure they’ll be able to make their monthly payments if their interest rate goes up. These loans have been particularly popular in California and other states with high housing costs.


http://www.nctimes.com/articles/2006/03/08/news/top_stories/18_00_453_7_06.txt
"San Diego County’s inventory of unsold existing homes is fast approaching 16,000, twice the total one year ago and five times the number in March 2004, a local real estate agent said Tuesday.”

"We’ve gone up by 400 properties in the last five days,’ he said. ‘That’s 80 properties a day.’ At the same time, sales are declining sharply.”


http://www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2006-03-03-12369.html
“Housing today is more highly leveraged than it was in 1989, just before the last bicoastal housing bust occurred. Today the housing leverage ratio is about 43%. In 1989, the leverage was about 35%. Between 40% and 50% of new mortgage debt applied for in the past two years has had an adjustable-rate element to it. Back in 1990, only about 10% of new mortgage debt was of an adjustable rate nature. A lot of these adjustable-rate borrowers in the past two years are in the ’sub-prime’ category or are speculators."

“It has been estimated approximately $600 billion of sub-prime adjustable rate mortgages will reprice over the next two years. Chances are mortgage defaults will be on the rise with these repricings. This will put ‘repos’ on the market, which will depress home prices. Speculators, with negative cash flows and slower or no appreciation in their investment properties, also will add to the glut of homes for sale.”


http://www.lewrockwell.com/french/french40.html
“One builder with a project in the busy southwest confided that he dropped his prices $20,000 per unit to compete with the handful of large publicly traded builders that have projects surrounding his. Unfortunately, that move just prompted the big builders to drop prices more. He described competing in that market area as a ‘bloodbath.’”


And a Realtor speaks...

http://www.orlandosentinel.com/busi...7,0,4341446.story?coll=orl-business-headlines
“Q: We’ve seen the real-estate market in Orlando and Florida cool from last year’s record pace. Is it going to continue to slow?”

“A: Continue to slow? I think what may happen, I don’t think you’ll see a reduction in [intangible] value; let’s put it that way. Value and price are different things. You probably won’t see a reduction in value, but maybe in prices, meaning you can pay less but it’s worth more. Value is how much that particular piece of property is worth to you.”


Huh? OWP

 

http://www.marketwatch.com/News/Sto...E72BC}&dist=newsfinder&siteid=google&keyword=
St. Louis Fed President William Poole..."Indeed, given that bubbles always burst -- if there is no burst there was no bubble -- clear advance evidence of a bubble can never exist," Pool said. "If the evidence was clear, then everyone would know about the bubble and forthcoming burst, but then the buying that created the bubble would never occur in the first place.

"So if you have an academic interest in house prices, I recommend that you wait a few years. If you have a direct financial interest, I can't help much -- you're on your own," he said.

 

I rented a house from a policemen who said he had 10(maybe 11, don't remember for sure) rental houses. I have posted this before and don't mean to be redundant.



John

 

Yes, I recall reading that earlier in this thread. It's staggering to think about because of the risk that these types of people are exposing themselves to. If this guy has the slightest cashflow issues, he could sure eat up his savings in a hurry.

 

i would assume most of his properties are rental..
he'd better pray that his tenants are not planning to move out anytime soon.

wonder how many of them give him positive cashflow??

 

You aint seen nothing yet.

Lenders are foreseeing a rise in foreclosures so they are doing away with Option ARM's and the like.

Look out!

 

I enjoy reading this thread when I come by here..I have a question for the real estate guru's, finance experts.

I have paid off my own home and it would sell for approx $350-$375K if I sold it...Since I paid it off, I have no mortgage of course and I am single, in my early 20's and have no dependents so any advice to how I can take advantage of having my house paid off and doing something with the equity?..For example if I took out a equity loan say for $200k at 7% could I put it to use somewhere else to earn more than that? (not trading related)

 

Hmm, enjoy the fact that the home is yours. From your description of things, you are in a great fiscal place. Stay there!

Do you like your community? Is it stable or upgrading? Borrow $75,000 and upgrade the appliances, fix the roof, repaint the place, redo the floors, get a new mattress (sleep better), grab a few new polo's and slacks, put a few bucks into personal debt retirement. Anything left, use it for savings and emergency purposes! Take five years (or less) and pay that loan off. Breathe! You have a lot of life ahead, take time and enjoy it.

 

Hmm, sell the house unless it is in an up-and-coming area,

Almost live off the interest,

Not bad!

MACHRON

 

But I would still need another place to live so are you suggesting rent then?

I live on Long Island and in a nice area that is desirable..

Thanks for replying to my question.