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I think you need to address the recent writings on the impact of ‘investors’ on local housing market price increases and busts.
Lawler on “Real Estate Investors, the Leverage Cycle, and the Housing Crisis” [today]
CR - Housing: Speculation is Key [2005, real time bubble analysis]
Recent Fed report [Sept 2011 publication]
Speculators had a huge effect on housing prices. These weren’t investors buying for cashflow but speculators buying for appreciation. When free money is given to speculate on any asset class, prices are bound to go up—a lot.
I understand the difference, and know that you’re a less-leveraged cash-flow positive investor.
What is important to find out regarding strategic default is the behavior difference between owner-occupant and ‘investment’ properties. Strategic default is far higher when you’re not living in the home. It probably doesn’t help to extrapolate data from non owner-occupied default scenarios to conditions where there is a higher percentage of owner-occupied homes.
Guess as a conservative I’m part of the “extreme left” as well.
I’m so tired of the crap I *will* default and jam my home up your collective rear ends. As a public that cannot or will not stand up to the corruption, you deserve for me to burden you with yet another home that the government WILL pay Chase bank off on.
You DESERVE it, enjoy, as there are millions of people just like me only waiting for the opportune time to default….and that time approaches rapidly.
I thought you already had defaulted. I know how unhappy you are with the situation. What has stopped you from defaulting already?
I’m paying less than rental parity at the moment. That will change when the interest rate goes up. Remember HAMP, well I’m in that program, and the astounding 5% loan that was awesome is now looking like BOHICA.
Interest rates will dive to 2%, all HAMP people will laugh and re-default now that the rich and those with equity borrow cash for LESS interest, yet let’s hold those whom own to a higher rate, while they are underwater, and HOPE those people don’t have a brain in their skulls to default.
Aye, thank you to those whom encourage me to default to *try* and recoup some of my 20% down, it appears there is no other option other than throw good money after bad. This whole shenanigan should never have happened, it was fraud from the top down, yet no one goes to jail. If I steal food because I’m hungry, I go to jail. If I sleep in a park because I’m homeless, I *can* go to jail. Honor, truth, and justice? Hardly.
Restore the Glass-Steagall Act.
What exactly is the “crap” that is tiring you?
I don’t understand the rage of underwater borrowers. If you’re in CA, and you want to default, do it. It’s a great option. Why so much anger? Yes, the banks would likely be better off modifying your mortgage than foreclosing on your home, but they have their reasons for not doing so (or they’re just inept). So what?
Dude, just stop paying. You’ll probably get 24 months of free living. When I’m writing my rent check every month, sometimes I wish I had that option myself.
Don’t be bitter, just make the smart move. I’m sure the banks will give you another loan in a few years when the dust has settled.
Swiller, I remember you said you put 20% down. That is why you are angry. Like the others said, add up two years of living free (other than utilities) and see how much of that 20% you get back.
I agree the whole ponzi scheme has fraud stamped all over it from the top down and it stinks to high hell. It’s obvious nobody will get charged and go to jail, you need to look out for yourself. If that means squatting for a few years…do it!
Aye beef, and ty. No worries, I’ll keep the blog informed when I do decide to default. I could even send in pictures of all the upgrades that will be removed and sold. You can see a before and after picture!
I should really start a blog called “Strip that House - Legally, with a wink and a nod.”
Wilsonart Flooring anyone? It’s not attached to anything, it’s a free-floating floor and as such, can be removed. Ceiling fans? Blinds? (I’ll pick a good neighbor for those to go to prolly).
Anyone want to exchange appliances? I have to leave something, who cares if it works or not. Y’all get my idea, some homeowners are a bit more aggressive than others, I’m quite creative when the need arises and i would rather bless YOU, people, rather than the banksters.
IR… I still don’t get it… the cost of ownership is only going to rise as interest rates rise and wages stagnate. Why not just go buy a 2500 square foot house with a pool in Scottsdale for 189K and retire??????? Or work on the golf course????
With the savings you can afford to come to CA every month and stay for a week in a nice hotel on the beach!
My .02
BD
A detached 3 bedroom listed for less than $500,000 in Irvine California ... this is something the typical real estate bull, apologist, realtor said would never happen. Not only is is happening, we also have the lowest mortgage rates ever, delivering a false (faux & phony) affordability number.
So lets see here ... we have the lowest mortgage rates ever, and home prices all over Orange County (especially the top end) are still in decline.
No bottom in sight.
mortgage rates going lower. see japan…about 2+% currently. But that is recourse.
Who said that would never happen?
It’s a detached 1500sft condo, many think $500k is still too high.
What I recall questioning is Irvine homes getting back to 1999 unadjusted prices.
This home sold for $271k in 1999… do you think it will get there? If I adjust for inflation, that’s about $368k… so you’re saying we have another 25% drop coming?
Who said that would never happen?
People have been calling a bottom in the real estate market for 4 years now. The National Association of Realtors called a bottom in 2007. Are you saying people didn’t suggest that prices would not come down in Irvine?
What I recall questioning is Irvine homes getting back to 1999 unadjusted prices.
I have little doubt if the the govt and Fed got out of the housing subsidy business, NOMINAL prices would be pre-Y2K. Imagine no Freddie, no Fannie, no FHA, no artificially low mortgage rates, no mortgage interest deduction, force banks to mark to market ... all these subsidies and welfare programs have expanded since the financial crisis started. It’s very easy to see what would happen to pricing if all these welfare programs went back to pre-housing bubble status, or even worse, disappeared.
so you’re saying we have another 25% drop coming?
I wouldn’t be surprised, but who knows at this point. I never expected the govt/FED to do what they have done to protect this bubble.
lee in irvine - spot on. these subsidies must go, politically impossible however. homeowners equate strong house prices with strong economy, no matter how much debt people are buried under.
subsidized prices only serve to divert capital from more productive areas of the economy as well as hinder personal savings rates, which are one in the same.
Occupy should move to the North Pole, because santa is the best at giving out free presents to good little boys and girls.
O.C. population growth the fastest since 2001
http://lansner.ocregister.com/2011/12/07/o-c-population-in-biggest-jump-since-2001/155160/
The house was bought back in 2007 for 675k, now they’re asking for 499,000. How did you arrive at the (205,409) loss amount?
Unless you’re investing in some small business or backing an idea or invention/enterprise (be it a film project a record label or a lemonade stand), you are not really an investor; you’re a speculator—you’re not taking a risk to advance an idea or an enterprise. You’re parasiting off of a pre-existing utility and likely doing so with cheap, borrowed money. I’m not knocking you for doing it - hey, get all dollar’d up and be the biggest swingenest dick in your zipcode - but let’s not split the hair so fine. You’re not that much different from the much-reviled Joe or Jose Six Packs who were flipping houses back in ‘04; different gambit, but same objective: money for nothing.
I got a fiver right here that says Cash Flow Investment is tomorrow’s Flip This House.
Max:
Everything you said is the opposite of correct.
Most people consider investments to have some basis in reasonable risk (CDs, RE, bonds), and speculation to be much greater risk (film projects, startups.)
The 2 main methods of valuing RE are market price and income (cash flow), and neither is a fad. Ask any accountant.
If you’re arguing that IR is rent-seeking, that’s true, but also has been legal for thousands of years.