Comments on: Something Fishy with RealtyTrac Numbers? http://www.twincitiesrealestateblog.com/2009/something-fishy-with-realtytrac-numbers/ Housing News, Opinion, Statistics and Homes for Sale Tue, 07 Feb 2012 17:03:27 +0000 hourly 1 http://wordpress.org/?v= By: Rich Schulze http://www.twincitiesrealestateblog.com/2009/something-fishy-with-realtytrac-numbers/#comment-363 Rich Schulze Fri, 01 Jan 2010 04:46:49 +0000 http://www.twincitiesrealestateblog.com/?p=798#comment-363 You shouldn’t touch real estate, as I think it will be dead money for another decade. Rent, don’t buy. If you have to buy, then get a 30 year fixed rate mortgage now at 5%, because rates are going up a lot in the future. When I bought my first home in New York in the early eighties, I got nailed with a 17% interest rate on my mortgage. We may revisit those levels. Houses will continue to move lower, maybe another 10% or so. We have another wave of foreclosures hitting the system soon, triggered by the option arm readjustments. I see support for prices when the cost of owning and the cost of renting are more in line. Home ownership may have to become cheaper than renting, because of perceived risk to the principle, for the real estate market sell-off to finish. However, expecting houses to drop a lot from here is like shorting Citibank at $3. We’ve basically had the big move already. Due to poor demographic factors, the demand for houses is going to take a long time to come back. While 80 million baby boomers are trying to sell their houses to 65 million gen Xer’s, don’t expect a recovery in prices, especially when the gen Xer’s are still living in your basement. You shouldn’t touch real estate, as I think it will be dead money for another decade. Rent, don’t buy. If you have to buy, then get a 30 year fixed rate mortgage now at 5%, because rates are going up a lot in the future. When I bought my first home in New York in the early eighties, I got nailed with a 17% interest rate on my mortgage. We may revisit those levels.

Houses will continue to move lower, maybe another 10% or so. We have another wave of foreclosures hitting the system soon, triggered by the option arm readjustments. I see support for prices when the cost of owning and the cost of renting are more in line. Home ownership may have to become cheaper than renting, because of perceived risk to the principle, for the real estate market sell-off to finish. However, expecting houses to drop a lot from here is like shorting Citibank at $3. We’ve basically had the big move already. Due to poor demographic factors, the demand for houses is going to take a long time to come back. While 80 million baby boomers are trying to sell their houses to 65 million gen Xer’s, don’t expect a recovery in prices, especially when the gen Xer’s are still living in your basement.

]]> By: george hayduke http://www.twincitiesrealestateblog.com/2009/something-fishy-with-realtytrac-numbers/#comment-362 george hayduke Thu, 31 Dec 2009 04:36:05 +0000 http://www.twincitiesrealestateblog.com/?p=798#comment-362 Just more evidence of the growing delinquency problem, although it is important to note these stats do include Home Affordable Modification Program (HAMP) loans in trial modifications (and the trial modification periods have been extended again). I think house prices will fall more when the government intervention slows. Just wait for the report for Jan'10 The banks still have more mortgage write downs than they can handle, without going TU. Those loans will go to F & F. MBS will go to F & F. All RRE will effectively be nationalized. Once F & F own all the loans they will write down principal across the board, as well as lower rates and do whatever else it takes to stop foreclosures. The Fed still wants to believe (or have the public believe) that this is a housing crisis. People understand housing, you live there, you paint it and your kids have beds in the house. People do not understand a credit / debt crisis. Just more evidence of the growing delinquency problem, although it is important to note these stats do include Home Affordable Modification Program (HAMP) loans in trial modifications (and the trial modification periods have been extended again). I think house prices will fall more when the government intervention slows. Just wait for the report for Jan’10

The banks still have more mortgage write downs than they can handle, without going TU.
Those loans will go to F & F.
MBS will go to F & F.
All RRE will effectively be nationalized.

Once F & F own all the loans they will write down principal across the board, as well as lower rates and do whatever else it takes to stop foreclosures. The Fed still wants to believe (or have the public believe) that this is a housing crisis. People understand housing, you live there, you paint it and your kids have beds in the house. People do not understand a credit / debt crisis.

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