Foreclosures

[USEDCAR]

They are building a shit load of new houses and squeezing new houses between old houses. My city has a lot of old ugly rundown ugly shaped duplexes and people are trying to sell them but no one is buying them or the new houses . I would much rather them tear down the duplexes and Build new houses in their place

We have this street thats all trees and woods its nice driving down their because its so dark. Now they are tearing them down and building new houses there.



The house is okay but i probably could find a house like that around here for cheaper. California is so expensive i would love to live there

 

[ejbonk]

Very true ejbonk, but unfortunately this bubble is fixing to be worse than many in a while. Just think that actual (as opposed to inflation adjusted) housing prices dropped year-over-year nationwide last year for the first time since the Great Depression.

I stand by my first posting on this subject.
BY the time it is over,We will see the Greatest drop in Real Estate prices since the Great Depression.
It will Hit ever state and every community.Those that say it will not are only fooling themselves.
European Investment Bankers today(01-16-2008 ) Believe the US is entering the beginnings of a Deep Recession.
I hate to tell them this,the US has not fully recovered from the one started at the end of 1999 in the Manufacturing segment of the Economy.
It is just now catching up with the rest of the economy as more lay-offs,company closings and Out-Sourcing begins to show up in all sectors of the Economy.
The Recent Sub-Prime Lending and Foreclosure Crisis has just Magnified the problem to a level of National Consciousness.

This will result in an imploding collapsing tax base at all levels of Government. I'm sorry, the Bush Admin. can no longer cover-up the True State of The Economy and The Federal Reserve Can Not Bail the Economy out with low interest rates this time around.Simply because The Fed can no longer control an Economy now controled by World Forces beyond it's control. World Price of Oil ,China's Manufacturing of US and Worldwide Products,and Indian Outsourcing. Just to Name A few. The only way out is a return to Tariffs and ending the US Policy on FreeTrade with 3rd World Countries.

 

[LaloGS]

I stand by my first posting on this subject.
BY the time it is over,We will see the Greatest drop in Real Estate prices since the Great Depression.
It will Hit ever state and every community.Those that say it will not are only fooling themselves.
European Investment Bankers today(01-16-2008 ) Believe the US is entering the beginnings of a Deep Recession.
I hate to tell them this,the US has not fully recovered from the one started at the end of 1999 in the Manufacturing segment of the Economy.
It is just now catching up with the rest of the economy as more lay-offs,company closings and Out-Sourcing begins to show up in all sectors of the Economy.
The Recent Sub-Prime Lending and Foreclosure Crisis has just Magnified the problem to a level of National Consciousness.

This will result in an imploding collapsing tax base at all levels of Government. I'm sorry, the Bush Admin. can no longer cover-up the True State of The Economy and The Federal Reserve Can Not Bail the Economy out with low interest rates this time around.Simply because The Fed can no longer control an Economy now controled by World Forces beyond it's control. World Price of Oil ,China's Manufacturing of US and Worldwide Products,and Indian Outsourcing. Just to Name A few. The only way out is a return to Tariffs and ending the US Policy on FreeTrade with 3rd World Countries.

You are a man with clear vision and understanding of the situation we are in right now.

 

[drhladnjak]

The main reason our manufacturing base eroded and so much offshoring took place was because it's more expensive to make things or perform services here than in other countries. Unlike (for example) Germany, we didn't invest in new machinery and other manufacturing productivity improvements that would have ultimately lowered manufacturing costs. Unlike every other industrialized country employers (especially auto manufacturers) have much larger retirement and health care obligations because of our lack of public systems for either of those. On top of those sorts of reasons, the USD had been very strong until recently, largely because money was pouring in from outside the country to buy our debt (lots of people wanted it because it was viewed as the safest debt to hold in the world). That, however, meant that American manufactured goods were move expensive overseas.

I'm not saying a recession is going to fix our problems, but a declining dollar will make American exports more competitive if we can make the investments necessary to foster those industries. Large European exporters like Germany are already very unhappy about the weak dollar because they have export oriented economies which are threatened right now. I don't know what exactly will happen, but this time does seem like an economic turning point for many countries in the world.

Washington state is actually one of the few (maybe the only?) state running a trade surplus right now, largely because we export three big classes of products: software (Microsoft is based here), airplanes (Boeing makes most of its planes here) and wood/paper (Weyerhaueser and Plum Creek are based here). So far the economy here hasn't had much of a down turn outside of a bunch of people laid off from Washington Mutual (also based here) in the mortgage unit. We'll see where it goes though. In the end, we're all going to hit I'm sure.

 

[ejbonk]

The main reason our manufacturing base eroded and so much offshoring took place was because it's more expensive to make things or perform services here than in other countries. Unlike (for example) Germany, we didn't invest in new machinery and other manufacturing productivity improvements that would have ultimately lowered manufacturing costs. Unlike every other industrialized country employers (especially auto manufacturers) have much larger retirement and health care obligations because of our lack of public systems for either of those. On top of those sorts of reasons, the USD had been very strong until recently, largely because money was pouring in from outside the country to buy our debt (lots of people wanted it because it was viewed as the safest debt to hold in the world). That, however, meant that American manufactured goods were move expensive overseas.

I'm not saying a recession is going to fix our problems, but a declining dollar will make American exports more competitive if we can make the investments necessary to foster those industries. Large European exporters like Germany are already very unhappy about the weak dollar because they have export oriented economies which are threatened right now. I don't know what exactly will happen, but this time does seem like an economic turning point for many countries in the world.

Washington state is actually one of the few (maybe the only?) state running a trade surplus right now, largely because we export three big classes of products: software (Microsoft is based here), airplanes (Boeing makes most of its planes here) and wood/paper (Weyerhaueser and Plum Creek are based here). So far the economy here hasn't had much of a down turn outside of a bunch of people laid off from Washington Mutual (also based here) in the mortgage unit. We'll see where it goes though. In the end, we're all going to hit I'm sure.

Sorry,I do Not share your view. With More and more American Companies moving Production Off-Shore and Other US Companies in the control of Off-Shore Companies. I do Not see a return to normal Economic Activity in the future ,without a return to Tariffs to make US Companies return Production to American Soil.
Here in Ohio Hoover's has moved all production to mexico and china,Hoover is now owned by a china/HongKong based company. Timken Company moving Production to India. Diebold has moved all production to China and India. Republic Steel is a very small Shadow of it's former Self. The Gibbs Toy Company(Once the Greatest in the World) Closed and Out of Business. It's Buildings converted to a bunch of unsold Condos that will be autioned off due to forclosure on the builder.

Free Trade will be the death of the great American Society,That was saved by FDR,and Turman. Maintained by IKE.Challanged by JFK. Slowly dismantaled by Nixon. Bored By Ford and Carter. Revised by Reagan, Been/Being Destroyed by 2 Bushs, and barely Impoved by Clinton.

This country is a major mess, and it is getting worst everyday with each docking of every containor ship from ASIA.

The economy picture you paint in washington will be effected in time. Just wait and see.

 

[KennyD]

It is a sad state of affairs that we get into thses Real Estate fiascos ....
My home here in Central Florida was appraised at $225,00 TWICE by different appraisers .
However; I cannot sell the damm thing for $179,000 and agreeing to give the buyer $2,000 rebate to do some redecorating .....
Last year to avoid foreclosure; I re-fied and somehow got into a negative mortgage type of bull shit that adds to my mortgage every month when I pay a payment ...
God help us all .. that we won't be living in cardboard boxes by a river somewhere before long ....

 

[metta]

http://online.wsj.com/article/SB120054012983095939.html

The credit crunch ... is starting to bite commercial projects, too.

Yesterday ... the developer of a twin-tower casino resort in the heart of Las Vegas, defaulted on a $760 million loan from Deutsche Bank AG ... Moody's Investors Service warned last week that the corporate default rate for the construction and building industry could reach 12% this year and predicted a 6% default rate in the hotel, gaming and leisure industries.
...
Around April of last year, commercial lenders started to get nervous about the lax underwriting standards that developed during the property boom. Bankers began to raise interest rates and required borrowers to put in more of their own money into deals.

http://calculatedrisk.blogspot.com/2008/01/cre-credit-crunch.html

The strong investment in non-residential structures has been one of the keys to avoiding recession through Q3 2007. Now that commercial real estate appears to be slumping, it looks like non-residential investment will slump too - putting the economy into recession.

Personally, commercial property increased at such a ridiculous rate the last 5 years that there is no way that I could ever see myself buy a property to expand my businesses. I'm hoping that I can save some money for a down payment over the next couple of years, that some properties will go down in value as well as more listings becomming available. It has been difficult to even find good listings in the commercial industry not alone at an affordable price. I will never be willing to put myself into millions of dollars in debt in order to get a building and I will not lease either.

 

[metta]

It is a sad state of affairs that we get into thses Real Estate fiascos ....
My home here in Central Florida was appraised at $225,00 TWICE by different appraisers .
However; I cannot sell the damm thing for $179,000 and agreeing to give the buyer $2,000 rebate to do some redecorating .....
Last year to avoid foreclosure; I re-fied and somehow got into a negative mortgage type of bull shit that adds to my mortgage every month when I pay a payment ...
God help us all .. that we won't be living in cardboard boxes by a river somewhere before long ....

With interest rates coming down, it might be a good idea to see if you can get yourself into a conventional fixed rate loan. I'm not sure if that is possible with an upside down loan though.

 

[dte]

Interestingly Melbourne has been dubbed the auction capital of the world, as upward of 80% of all our properties are auctioned. Mind you, many are sold prior to the auction by the vendor accepting the price offered without having to go through the angst.


The bank is in effect saying that they will take nothing less than the reserve price. It is (or has been) a common ploy to advertise the price range way below the expected price in order to generate more interest and get more people to the auction. This is now illegal here.

Interestingly, because of the defaults in the US it is now affecting global markets and impacting on our interest rates as money generally becomes more expensive.

Ours that have to be sold because the banks want their money are called "Mortgagees Auction" ........ a bit of embarrassing when it is plastered over the hoarding but again done to generate more interest because they know that it has to be sold.

I would be interested to know the final selling price, you will probably find that it is much more than you think.

 

[ejbonk]

It is a sad state of affairs that we get into thses Real Estate fiascos ...
Last year to avoid foreclosure; I re-fied and somehow got into a negative mortgage type of bull shit that adds to my mortgage every month when I pay a payment ...
God help us all .. that we won't be living in cardboard boxes by a river somewhere before long ....

Those used to be called Hoovervilles, I guess,We could call them Bushvilles or Bush Estates,or maybe GWvilles.

 

[metta]

We don't normally get forclosures in my neighborhood. Not only is there a forclosure right now, it is going to be auctioned off. The realtor told one of my neighbors that they received a couple offers for $680k but the bank would not take less than the asking price and instead decided to auction it off. I don't think that we have ever had a home go up for auction. The neighbors are a little shocked that they would do such a thing in our neighborhood. If anyone wants to move to Los Angeles County, here is your chance to possibly get a really good deal:

http://www.usahomeauction.com/property.php?auctionID=H-016&itemID=9705&venueId=65&start=0
Starting Bid: $339,000
Previously Valued To:* $910,000
Square Footage: 2648
No. of Bedrooms: 4
No. of Bathrooms: 3

http://www.mtncove.com/homes

The house being auctioned is a nice home. I know the original owners. The people that bought it, I don't even think they ever moved in (I could be wrong). I think that the garden may need a little work but the house should be in good condition. It was built in 2002. Many of my favorite neighbors live on the street that it is on.


I have heard differnt stories throught the grapevine as to who bought it from the original owners. I think that it was a realtor that over extended himself by bying too many properties at the same time. I have also hear that he bought it before getting married and when she saw it she was angry that the master bedroom was less than a couple thousand square feet. I think that may be why they did not move in.....but again...that is just a rumor. Personally, I think that this model has a very nice master bedroom/bathroom. No, it's not a 10,000 square foot home, but most people cannot afford that anyways.

If you want to know more about the area or home let me know. I can probably fax a copy of the floorplan to you if you are interested.

Are there forclosures/auctions in your local area as well?

So I was just talking to one of my friends/neighbors about this house and he told me it was auctioned off for $640k, which is below what they received offers for. I guess it had something to do with the laws and how long it had been on the market as a foreclosure.

My friend told me that he is still selling several homes, but they are the ones that are townhomes for under $417k and homes over $1 million dollars. In between that, they are just not moving right now. He thinks that when they increase the amount of the jumbo that they will start moving again. We have another home in my neighborhood that is in pre-foreclosure. They are trying to short it, meaning sell it for less than what the loan on the house is. The are asking $680k and the loan on it is almost $900k. A house of this size, approx. 3200 sq. ft, in the Los Angeles County is unheard of. Any gay boys that can get approved of easily wanna check it out? http://www.realtor.com/search/listi...90dc7d56&lid=1095573227&lsn=9&srcnt=35#Detail

Seriously, the smallest homes in this development sell for over $700k. They have priced this home below everything. The smallest homes are 2000 square feet.

The other homes of this floor plan are all asking over $1 million dollars for it. For example, here is one where they are asking $1.4 million: 11 Poppyglen Court

I was told that having 2 foreclosures in our area will not affect us, price wise. They wont be taken into consideration in an appraisal unless there were lots of foreclosures in our area. And most of our homes were built just prior to the push for crazy loans.

 

[drhladnjak]

A house is only worth what people will pay for it. It doesn't matter if other homes in the neighborhood have sold for over $700K in the past. If the large, nice house in the neighborhood sells for $680K and another one was just auctioned off for $640K, who in their right mind is going to buy a small house in the same area for more?

When prices go down, buyers can get spooked. Nobody wants to be the idiot who buys a house that will only be worth less next year.

 

[ejbonk]

A house is only worth what people will pay for it. It doesn't matter if other homes in the neighborhood have sold for over $700K in the past. If the large, nice house in the neighborhood sells for $680K and another one was just auctioned off for $640K, who in their right mind is going to buy a small house in the same area for more?

When prices go down, buyers can get spooked. Nobody wants to be the idiot who buys a house that will only be worth less next year.

Exactly!! Supply and Demand. It's a Buyers World Now Baby. Get Use to It.
Sellers are screwed at the moment,and free wheeling easy credit days are over ,so that makes less buyers and a whole lot of excess supply available.
Thus,your real estate values must drop.
The Pros call this a market correction.
The Home Owner that brought High says I got screwed and paid to much for this dump.
Welcome to the reality of G W's world.
Jan,20,2009 can not get here soon enough.

 

[metta]

A house is only worth what people will pay for it. It doesn't matter if other homes in the neighborhood have sold for over $700K in the past. If the large, nice house in the neighborhood sells for $680K and another one was just auctioned off for $640K, who in their right mind is going to buy a small house in the same area for more?

When prices go down, buyers can get spooked. Nobody wants to be the idiot who buys a house that will only be worth less next year.

The other homes in my neighborhood have dropped a little bit but nothing like the forclosure and preforeclosure. For example, the house next door to me sold for about $10k less than it sold for previously about two years prior.

I think that when people see that it is a forclosure, they expect to make a killing on the deal, and I think that is what people are getting because some areas have so many and they are competing for each other.

 

[metta]

I just spoke to one of my neighbors that had recently spoken to an apprasier and she told me that the values in our particular area are pretty much holding their own. Many of the beach areas are also holding their own as well. We did not see any where near as large of a value increase in our area that many areas in California have had the last few years. We also do not see the numbers of foreclosures in our area that the others are having. The appraisers are still appraising our homes pretty high because we are not having the forclosures like other areas are having.

 

[Kurn]

You know, Metta, not that you'll disagree with me, why can't we have a vibrant housing market and at the same time, just enough modest surplus housing to insure that no one has to be homeless?
This could be construed as hijacking a thread --- but in reality who's hijacked who?? Not yourself so much. Just...the culture, to use the polite term.
Actually, if people had a basic domicile they could go to or take a bus to, it would actually enhance the over-all free-market real estate market because those participating could do so without those nagging thoughts about "ahh, those poor bums...maybe Jesus will forgive us for ignoring them. Some nice policemen should take them to a homeless shelter where they can sleep on a cot."

If some moderator wants to make a new thread out of this, they're welcome to.

 

[drhladnjak]

I don't think we've really gone off topic here, so I'm going to keep posting on the thread...

The problem as I see it is that people have associated "vibrant housing market" with housing as an investment that beats inflation. That's really not sustainable because in the long term house prices can't outpace personal income. Buyers only have so much income available to spend either on a mortgage or on rent. Available income is directly tied to house prices through monthly mortgage or rent costs. Some interesting factors that can affect this connection though:

1. The average price (adjusted for wages or inflation) of a home could stay constant but homes or lots could get smaller to compensate for lack of available land or limited transportation (people will live in a small place if it means they don't have to sit in traffic for 2 hours getting to work). People still spend the same amount of money for a place to live, but get less. If you've ever been to New York, you've seen this in action--small living spaces for high prices.

2. More people could live under one roof, thereby pooling their income. This is already happening as more 20 somethings continue to live in their parents' house. It's also a factor in places like southern California that have large Latino and Asian populations where a large family living under one roof is more common.

3. The payment amount for a mortgage of a certain amount can go up or down due to interest rates or changes in lending practices. This is a major factor for the run up in prices over the past few years. If interest-only mortgages, for example, are easier to get and more common, the monthly cost of borrowing a certain amount of money is less for everybody. That drives up demand, which leads to higher prices because there's more money chasing the same number of properties. Ultimately, prices find a new plateau with for that set of financial circumstances. In the case of interest-only mortgages, you have to pay off the principal eventually (often after a couple years into the mortgage). For one reason or another, prices go down eventually (these thing are cyclical). As soon as prices drop, people owe more on their loans than their houses are worth, which leads to increased foreclosures as borrowers give the keys to the bank which takes a loss on the property. As banks lose money on bad loans, they shore up lending practices, which means it's harder for buyers to get a loan, which further reduces the amount of money that's available to buy houses, which reduces demand, which reduces prices. Falling prices cause more foreclosure and the cycle continues until a new equilibrium is reached.

 

[KennyD]

You know, Metta, not that you'll disagree with me, why can't we have a vibrant housing market and at the same time, just enough modest surplus housing to insure that no one has to be homeless?
This could be construed as hijacking a thread --- but in reality who's hijacked who?? Not yourself so much. Just...the culture, to use the polite term.
Actually, if people had a basic domicile they could go to or take a bus to, it would actually enhance the over-all free-market real estate market because those participating could do so without those nagging thoughts about "ahh, those poor bums...maybe Jesus will forgive us for ignoring them. Some nice policemen should take them to a homeless shelter where they can sleep on a cot."

If some moderator wants to make a new thread out of this, they're welcome to.

You posed an interesting idea without saying how to do it . You can't just take someone's housse and GIVE it to a homeless person because it is vacant and for sale ... So; who would pay the home owner a fair market value ?

 

[Kurn]

OK.
I'm not saying give someone a house. I'm just saying that in the midst of all our mega-materiality we could make some very simple but safe shelters(very basic apartments I mean,dignified but small) that any citizen could use in an emergency. It has to do with how we design our cities, partly.

And this is in a sense related to the sort of enviable development that Metta lives in. Because how can we live in a "nice place" with complete peace of mind when there are too many homeless people who don't want to be out on the streets, etc?
I think if we solved this problem which is far from insoluble, especially with the WWW-living data base at our finger-tips, that the enjoyment differential of our houses and hence their value would be all the more enhanced.
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[metta]

OK.
I'm not saying give someone a house. I'm just saying that in the midst of all our mega-materiality we could make some very simple but safe shelters(very basic apartments I mean,dignified but small) that any citizen could use in an emergency. It has to do with how we design our cities, partly.

And this is in a sense related to the sort of enviable development that Metta lives in. Because how can we live in a "nice place" with complete peace of mind when there are too many homeless people who don't want to be out on the streets, etc?
I think if we solved this problem which is far from insoluble, especially with the WWW-living data base at our finger-tips, that the enjoyment differential of our houses and hence their value would be all the more enhanced.
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But Kurn, the government does public housing and in general, they are not safe places to live. I wish they were but when you put a bunch of poor people together who don't have money to live a sustainalbe living, you end up with run down and dangerous places to live in.

I would support low income housing, the type where they can get low interest loans. Most cities in California have these programs but they still need to make better than average wages to purchase them. One extreme example is Santa Barbaba, low income is considered to be around $150k per year in household income. But of course living in poorer cities, you can make a lot less than that to get into a program.

The best thing we could do is find ways to elimiate the poverty class by pushing everyone up to at least a lower middle class income. This would require more of a European socialist type of economy.