bulls you need to understand this

i have friends with multiple houses and 750 ficos that are now walking away from them because for them to come back to where they bought would take atleast 10 years assuming we revert back to 8% appreciation per year... they are trashing their credit scores knowing they can ameliorate them in five years. these guys have jobs and wont pass the stress test for mortgage modifications ect....they are walking and frankly i would too!!!

we'll see how much fun that is after the deficiency judgment is ruled and they have their wages garnished until the next ice age!!!!! p.s. your buddies had better learn a little more about the bankruptcy laws, even the proposed new ones, and see what happens to folks who have other assets and jobs and walk on spec houses. the case for underwater primary/only residence homeowners is quite different.

Edited by humble1, 14 February 2009 - 06:24 AM.

i have friends with multiple houses and 750 ficos that are now walking away from them because for them to come back to where they bought would take atleast 10 years

assuming we revert back to 8% appreciation per year...

they are trashing their credit scores knowing they can ameliorate them in five years.

these guys have jobs and wont pass the stress test for mortgage modifications ect....they are walking and frankly i would too!!!

they are trashing their credit scores knowing they can ameliorate them in five years.

I think that we're likely to return to credit standards prevalent at the turn of 20th century--that is, once you impair your credit rating, you'll will never to able to repair it.

I did some pricing in my neighborhood… I guess you could call it “upper middle class”… rents are still about $1,200 per month below ownership costs (PIT) for the lowest priced homes, even with 20% down. Housing prices need to yet fall substantially further to become affordable.

The only solution I see is a pickup in inflation and building costs over a 5 to 7 year period along with low construction rates.

Personally.... I don't feel sorry for those with multiple houses that they cannot afford.... They bought the houses on the assumption that they would continue to increase.. They were building up a wealth machine for the future, and they were burned by the downturn in housing. In many areas people that walk will be forced temporarily to pay higher rent prices as there is an increase demand for Rental properties. Many individuals could make some money by renting their houses, as long as it is not high end homes.... Going forward we will see a more of a drop in housing prices, probably another 10% drop in 2009, before we hit bottom... However, we are seeing available credit diminish for those who can't afford it. Credit card companies also are cutting back to lending those with poor credit, so walking away from obligations is no longer and claiming bankruptcy is not the way to go...... Luckily, Q3 there is overall going to be increases in jobs as companies start to higher some people as more jobs become available. We are already starting to see in many markets as workers being re-employed. Of course this won't show up in the news for a couple more months...... In the meantime the bust cycle for the housing market and automobiles will continue to be deep for the whole year due to cheap financing in 1999 - 2005 extended the bubble in these areas years longer than it normally would. If you think I'm bullish, I am. With the government dumping more money into the economy will force a good bounce in the market........... JMHO Barry

I did some pricing in my neighborhood… I guess you could call it "upper middle class"… rents are still about $1,200 per month below ownership costs (PIT) for the lowest priced homes, even with 20% down. Housing prices need to yet fall substantially further to become affordable.

Now out here they don't.

Mark

you can get positive cash flow here in vegas right now

Remember the TV show about "flipping" homes? They would buy one in California for 100K, paint it, and sell it for 175K. Now there is a show called "Get it Sold." Saturday's show featured a home which had been on the market 8 months.