Saturday, October 29, 2011

Help to the Homeowner

I think this describes a lot of what we have seen for the last 2-3 years.

17 comments:

DeltaBravo said...

Don't get me started.

Anyone else here been trying to sell a house lately?   I'm only going to get about 77% of what my house is valued at for tax purposes on my current mortgage payments.  I'm competing against foreclosures and short sales.  Mine is neither.  But because of the bad economy and lack of jobs I'm getting hurt too.  And I'm not even in an area where there was an insane bubble.  Problem is, now we have a near 100% apartment occupancy rate.  All the people coming in for the jobs here are renting, not buying.  No one has faith in the economy.   Not even in a "good jobs red state."

Retired Now said...

Ok, DB,   one of my relatives is in the same boat as you are.  

Here are his thoughts:   

a.  lower my house price by $35,000 below what I owe on it.  

b. or...  walk away from it and save   $35,000 plus closing costs.

Hmmmmm.  If I choose  (a.),  then I help out the "poor" bank, whose bank officers are ludicrously overpaid. (not !)   

or...  I can choose  (b.)   and save myself well over $35,000 of my own money, vice contributing it to my bank.

I can rationalize choice (b.) by saying,  " I did not cause this huge mortgage meltdown, where mortgage bankers made a ton of quick profits."

Note that my brother-in-law and sister already own a fully paid house in another state where they will retire.   What a mess has been created by giving house loans at inflated prices to anyone who is breathing.

Surfcaster said...

Simlar position. I did did not refi to the nth degree (just once), did not over extend, and had a ton of equity in a few years. Everyone else went hog wild and now there are forcluse and short sells all around. Wish I had some more down scratch and might slumlord the existing house and upgrade - but i have no faith things will get better soon.

DeltaBravo said...

What gets me is there are many MANY people who would like to refinance at lower rates to stay IN the houses and the banks won't help.  So they lose the house.  The banks then become realty companies in effect.  And some are plowing houses down that could have been bought at lower prices.

DeltaBravo said...

Where I am... the Chinese are buying the houses up at fire sale prices. 

Anonymous said...

Americans were stupid enough to think that home prices always increase.  They don't.  Capitalism is an intellectual battle.

Surfcaster said...

Our Chinese or their Chinese?

DeltaBravo said...

LOL.  I'm only half joking about that... but... our Chinese.  (And other Asians/Indians/Pakis.)

Anonymous said...

In extremis<span>, a </span>Latin phrase<span> meaning "in the farthest reaches" or "at the point of death".  Think about this </span><span> </span><span>before</span><span> sign the dotted line.  </span>

Anonymous said...

Oh, you mean Americans that can make better financial decisions than you can.

DeltaBravo said...

Americans who were speaking Chinese.   Another rude anonymous troll... who has absolutely no idea the particulars of the situation or what decisions I've had to make or why or maybe even what it means to put the interests of children over "finances."  So go away. 

DeltaBravo said...

Oh... and by the way... the houses around here were selling for $30k to $40k more before Obama took office.

Anonymous said...

Correlation doesn't equal causation, but I'm sure you know that.

ewok40k said...

This only shows how much people came to see house as an investment, not a place to live... btw, Chinese seem to have massive housing market bubble of their own, about ready to burst.

DeltaBravo said...

Ewok, of course it's a place to live.  But when it's time to move it would be nice to have some return on the "investment".  I think that's at the heart of some future dilemnas for people.  Own or rent?  Why "invest" a large downpayment in a property that might fall in value.  You could get a better return for that money elsewhere.  Add to that Congress threatening every now and then to eliminate the homeowner tax deduction on mortgages.  They do that and it will completely kill the housing market in this country. 

As for guest.... I've had over a dozen years here watching housing remain steady/rising.  Then starting in late 2009 the prices began falling.  But you're right.  It's probably just correlation equals coincidence, right?  

ewok40k said...

Well, it might be an old and outdated mode of thinking, but people around here tend to try and keep settled. There are families who inhabit houses for centuries, if they last thru all the wars. It is not coincidence old European nobility was named after their chateaus. Buying a house is kind of declaration: Here I came to stay. Somewhere else life might be easier or work easier to get by, but I love this particular corner of earth and will not abandon it easily.

On investment:
Fifty years ago bankers were considered boring people investing in extremely cautious way other people's money for  mediocre wages for themselves.
If you look for investment, look hard at underlying real-world value of the thing you are investing in - and don't expect miracles. If something's price is skyrocketing, it is probably overpriced. Gold is all glittery, but  can you make a sword or gun of it - or if youre pacifist, a tool set or a car? Steel - now that is an investment! A car? Ford not Ferrari.  A ship? Salamander-class FFG, not LCS. You get the idea.

pk said...

quite a few years ago the "japanese" were buying up real property (mostly very large industrial buildings, hotels, office buildings.....). there was the usual cry of "the forgeiners are going to own lala land".

then there was a heluva large earthquake in Nagasaki.

all of a sudden the "japanese" wanted fast cash and lots of it to rebuild their towns.

they took a real bath on paper. i think that they made about $27 actual but LA county probably took that in some kind of weird paperwork fee.

C