Housing Thread...5/26/09 - Case-shiller down another 2.1 percent, no bottom yet

[Xavier434]

Originally posted by: Skoorb

It's possible but that is not a guarantee. People are being forced to buy homes in order to get that credit and such purchases will help the economy a lot right now. It is one thing to just hand out money and hope that it gets spent on the right things. It is another thing entirely to require money being spent on the right things and then handing out money.

What's to say real estate is a better use of the money than a new car or vacation to Disney Land? $15k is still basically meaningless in many markets, where median home prices have been obliterated.

The bottom line here is that people need to start buying again. Home prices will not go back up until that happens. If this incentive gets people to buy more sooner than later then that is a good thing no matter how you slice it.

The real estate market has a very large influence on many industries both directly and indirectly. Your examples of new car purchases and vacations have influences too, but I don't believe they are nearly as influential as real estate.

 

[PingSpike]

Originally posted by: Skoorb

It's possible but that is not a guarantee. People are being forced to buy homes in order to get that credit and such purchases will help the economy a lot right now. It is one thing to just hand out money and hope that it gets spent on the right things. It is another thing entirely to require money being spent on the right things and then handing out money.

What's to say real estate is a better use of the money than a new car or vacation to Disney Land? $15k is still basically meaningless in many markets, where median home prices have been obliterated.

I don't really want to pay for this plan...but it does seem like it might work IMO. I'd imagine there are people sitting on the sidelines either through fear of the economy or because they're trying to catch the falling knife. The opposite of fear is greed and 15K is definately something to be greedy over...and this kind of puts a cork on the end of that knife.

That said, I guess 15K isn't a large percentage of say California house prices...but its still something. And I think it'll be enough for some of the other hard hit markets like Florida and Arizona maybe?

 

[BoberFett]

Originally posted by: Xavier434

Originally posted by: Skoorb

It's possible but that is not a guarantee. People are being forced to buy homes in order to get that credit and such purchases will help the economy a lot right now. It is one thing to just hand out money and hope that it gets spent on the right things. It is another thing entirely to require money being spent on the right things and then handing out money.

What's to say real estate is a better use of the money than a new car or vacation to Disney Land? $15k is still basically meaningless in many markets, where median home prices have been obliterated.

The bottom line here is that people need to start buying again. Home prices will not go back up until that happens. If this incentive gets people to buy more sooner than later then that is a good thing no matter how you slice it.

The real estate market has a very large influence on many industries both directly and indirectly. Your examples of new car purchases and vacations have influences too, but I don't believe they are nearly as influential as real estate.

Why do we want home prices to go up? Do you not remember what happened when median home prices far exceeded median income affordability? Why do you want the market to crash with an unsustainable incentive program?

 

[Xavier434]

Originally posted by: BoberFett

Originally posted by: Xavier434
The bottom line here is that people need to start buying again. Home prices will not go back up until that happens. If this incentive gets people to buy more sooner than later then that is a good thing no matter how you slice it.

The real estate market has a very large influence on many industries both directly and indirectly. Your examples of new car purchases and vacations have influences too, but I don't believe they are nearly as influential as real estate.

Why do we want home prices to go up? Do you not remember what happened when median home prices far exceeded median income affordability? Why do you want the market to crash with an unsustainable incentive program?

It is not so much that I want them to go up as much as I want deflation to get under control across many markets. Not just real estate. It just so happens that real estate has a heavy influence on a great many markets which is why it is being targeted for the stimulus. You are comparing extremes too. There is a lot of gray area to consider that does not involve heavy uncontrollable deflation and nor does it involve "median home prices far exceeded median income affordability."

This program is not going to last forever and if the people start buying a lot more because of it and the result is getting the wheels in real estate to start turning faster to the point where the markets can once again regain a better grasp then it will sustain itself just fine. As it currently stands, you have to buy a home before July 1st of this year to get the tax incentive. That date may change as a result of the amendments in the bill but there will be deadline. The idea is to get people to buy more and to buy sooner than later.

 

[alchemize]

Originally posted by: BoberFett

Originally posted by: Xavier434

Originally posted by: Skoorb

It's possible but that is not a guarantee. People are being forced to buy homes in order to get that credit and such purchases will help the economy a lot right now. It is one thing to just hand out money and hope that it gets spent on the right things. It is another thing entirely to require money being spent on the right things and then handing out money.

What's to say real estate is a better use of the money than a new car or vacation to Disney Land? $15k is still basically meaningless in many markets, where median home prices have been obliterated.

The bottom line here is that people need to start buying again. Home prices will not go back up until that happens. If this incentive gets people to buy more sooner than later then that is a good thing no matter how you slice it.

The real estate market has a very large influence on many industries both directly and indirectly. Your examples of new car purchases and vacations have influences too, but I don't believe they are nearly as influential as real estate.

Why do we want home prices to go up? Do you not remember what happened when median home prices far exceeded median income affordability? Why do you want the market to crash with an unsustainable incentive program?

I we want prices to stabilize, to not "overshoot". This might be a good program for this...I was considering renting for a year but this will likely change my mind.

 

[Xavier434]

Originally posted by: alchemize
I we want prices to stabilize, to not "overshoot". This might be a good program for this...I was considering renting for a year but this will likely change my mind.

And that is exactly what the program is intended to do. Provide those who were thinking of waiting with incentive to act soon.

 

[Drakkon]

Originally posted by: Xavier434

Originally posted by: alchemize
I we want prices to stabilize, to not "overshoot". This might be a good program for this...I was considering renting for a year but this will likely change my mind.

And that is exactly what the program is intended to do. Provide those who were thinking of waiting with incentive to act soon.

What sucks is by the time those of whom need a job to take advantage of the credit actually get a job chances are the credit will be reduced back and home prices will be going back up.

 

[Xavier434]

Originally posted by: Drakkon

Originally posted by: Xavier434

Originally posted by: alchemize
I we want prices to stabilize, to not "overshoot". This might be a good program for this...I was considering renting for a year but this will likely change my mind.

And that is exactly what the program is intended to do. Provide those who were thinking of waiting with incentive to act soon.

What sucks is by the time those of whom need a job to take advantage of the credit actually get a job chances are the credit will be reduced back and home prices will be going back up.

Yes, but part of the reason those without jobs might get a job sooner than later will be the positive effects on the economy that such buying will have as a result of the incentive. Plus, I don't think the prices will go back up that much. I think the major difference we will see at least at first is less short sales and foreclosures.

 

[Kwatt]

Senate Adds Homebuyer Tax Credit to Stimulus Bill

WASHINGTON ? The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.

If I was buying right now I would take advantage of this also. Why not? It is free money right?

If I was selling my price would be have a * next to it and show the price after Tax Credit. And raise the price a little also. So I can get some free money.

But, since I am neither buying nor selling and I did not use my house to pay for a vacation, or to buy the latest electronic gadget to impress my coworkers and bask in their admiration of my coolness, or to buy a 4-wheel penile extension.

I guess I'll just have to be satisfied to help pay for all those who did. It is GREAT to see TAX DOLLARS at work.



Edited for grammer

 

[Xavier434]

Originally posted by: Kwatt
Senate Adds Homebuyer Tax Credit to Stimulus Bill

WASHINGTON ? The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.

If I was buying right now I would take advantage of this also. Why not? It is free money right?

If I was selling my price would be have a * next to it and show the price after Tax Credit. And raise the price a little also. So I can get some free money.

But, since I am neither buying nor selling and I did not use my house to pay for a vacation, or to buy the latest electronic gadget to impress my coworkers and bask in their admiration of my coolness, or to buy a 4-wheel penile extension.

I guess I'll just have to be satisfied to help pay for all those who did. It is GREAT to see TAX DOLLARS at work.

As a buyer, I can tell you that your potential plan if you were a seller would not work. I would just skip your place and move on to the next house. It's a buyers market. There are TONS of homes for sale and so very few buyers willing to budge.

As for the rest, I do not think you realize how beneficial it would be for most of America if the real estate market recovers properly regardless of whether or not you are a buyer or seller. The domino effect it would have is huge.

 

[Kwatt]

Originally posted by: Xavier434

Originally posted by: Kwatt
Senate Adds Homebuyer Tax Credit to Stimulus Bill

WASHINGTON ? The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.

If I was buying right now I would take advantage of this also. Why not? It is free money right?

If I was selling my price would be have a * next to it and show the price after Tax Credit. And raise the price a little also. So I can get some free money.

But, since I am neither buying nor selling and I did not use my house to pay for a vacation, or to buy the latest electronic gadget to impress my coworkers and bask in their admiration of my coolness, or to buy a 4-wheel penile extension.

I guess I'll just have to be satisfied to help pay for all those who did. It is GREAT to see TAX DOLLARS at work.

As a buyer, I can tell you that your potential plan if you were a seller would not work. I would just skip your place and move on to the next house. It's a buyers market. There are TONS of homes for sale and so very few buyers willing to budge.

As for the rest, I do not think you realize how beneficial it would be for most of America if the real estate market recovers properly regardless of whether or not you are a buyer or seller. The domino effect it would have is huge.

I would not blame you a bit for passing either.:laugh:

But, I have to ask because I do not know. Is a real estate market recovery proper if it artificially sustained with tax dollars?

If the market was over valued due to a bubble or loose credit. Is that better, worse or the same as inflating the value with taxes?

If a person needs, wants and can afford a house they will buy. If they don't or can't they should not. Unless their are buying as an investment. And I am seeing the domino effect of that right now.

A domino effect in sound savings is usually good, I think. A domino effect in real property investments can be good or bad depending on the market.
A domino effect in taxes may not be so good. In fact it can get down right fugly.

 

[mugs]

That $15k credit is a real kick in the nuts to those of us who did our part for the economy by buying a house last year.

 

[Kwatt]

Originally posted by: mugs
That $15k credit is a real kick in the nuts to those of us who did our part for the economy by buying a house last year.

Your going to be part owner of a bunch this year.
You just won't get to live in them or benefit from their sale or even know where they are.
You and you children will get to do your part for the economy and pay for them.


It looks like I am going to vote in the next election just like the last one.

I would like the ballots changed to:

Straight Rep.
Straight Dem.
Straight "Anti - Incumbent"

 

[Aimster]

woo hoo I get $15,000 for free
partyy

 

[Starbuck1975]

That $15k credit is a real kick in the nuts to those of us who did our part for the economy by buying a house last year.

Any action by the government to generate artificial demand for housing, and temporarily sustain the still inflated value of homes, is a kick in the nuts to all of us who have been responsibly saving and didn't drink the real estate always goes up Kool-Aide.

A $15,000 tax credit doesn't do a buyer a whole lot of good if homes are still 20-30% over valued, or it encourages buyers to jump into the market prematurely and immediately become upside down in their mortgages.

The best thing for the housing market is for pricing to return to fundamentals.

 

[StageLeft]

The last two zombie-avatar posters are right. This will just artificially inflate the value of housing, similar to if there was a $15k tax credit to buy a new corolla. What do you think would happen? Corollas would suddenly cost $30k.

The problem is that the government is trying to cure the symptom and not the disease. The symptom is depressed housing, so stupidly it thinks that if it can fix that it fixes the economy. This is no more intelligent than coming up with a better cure for hangovers, but the underlying problem is getting drunk in the first place. Housing will naturally "fix itself" when the economy doesn't suck. It is an integral part of the economy, but less so than others. Services, for example, why not stimulate those? Tourism, restaurants, etc.? Why the focus on housing? Why not stimulate auto sales with a $8k credit or furniture makers?

 

[BoberFett]

Originally posted by: Skoorb
The last two zombie-avatar posters are right. This will just artificially inflate the value of housing, similar to if there was a $15k tax credit to buy a new corolla. What do you think would happen? Corollas would suddenly cost $30k.

The problem is that the government is trying to cure the symptom and not the disease. The symptom is depressed housing, so stupidly it thinks that if it can fix that it fixes the economy. This is no more intelligent than coming up with a better cure for hangovers, but the underlying problem is getting drunk in the first place. Housing will naturally "fix itself" when the economy doesn't suck. It is an integral part of the economy, but less so than others. Services, for example, why not stimulate those? Tourism, restaurants, etc.? Why the focus on housing? Why not stimulate auto sales with a $8k credit or furniture makers?

Follow the money. Who will benefit from home sales as opposed to other points of capital injection into the market? Could it be the same banks who have already gotten hundreds of billions?

 

[EagleKeeper]

Originally posted by: alchemize

Originally posted by: Ozoned

Originally posted by: alchemize
A possible "bottom" indicator today...

Pending home sales rise in December

Offtopic...say, where is Dave at lately...? I just don't feel right without my threads being trolled by him...

I think he is pissed that someone stole his oil thread.

EDIT: I was just informed by Dave that Dave was permabanned. :Q

R.I.P.

He told me the same thing. :brokenheart:

No wonder P&N hasn't been as much fun lately. I disagree with that decision but not my forum.

Dave's refusal to comply with the rules (when requested) and his attitudes after being placed on vacation for such, led to his demise.

There came a point that he had expended all of his good will "political capital"

 

[Xavier434]

Originally posted by: Kwatt
I would not blame you a bit for passing either.:laugh:

But, I have to ask because I do not know. Is a real estate market recovery proper if it artificially sustained with tax dollars?

If the market was over valued due to a bubble or loose credit. Is that better, worse or the same as inflating the value with taxes?

If a person needs, wants and can afford a house they will buy. If they don't or can't they should not. Unless their are buying as an investment. And I am seeing the domino effect of that right now.

A domino effect in sound savings is usually good, I think. A domino effect in real property investments can be good or bad depending on the market.
A domino effect in taxes may not be so good. In fact it can get down right fugly.

The domino effect will be the circulation of money and the creation of jobs throughout a great many industries.

Also, keep in mind that the banks are being strict too and that will not change a lot any time soon. If someone cannot afford to buy a house then they are not getting a loan period. This money is not being given to anyone until they buy a house so the underwriters will not even be taking it into consideration for loan.

When it comes to artificial demand, that is quite debatable. I think there is a lot of demand for housing. Prices have already dropped a lot all over the country. Some places more so than others. People are just waiting to try and hit it at its lowest point to get the best deal. The problem with that is the negative domino effect the waiting is having on so many industries. It is causing a lot of lay offs and job loss which in turn is just making things more difficult for people to make any kind of purchases including homes. It is a nasty downward spiral and it is growing. It needs to stop before we hit a point of almost no return without incredible suffering far beyond what we are seeing now. The only way it will stop is if people start buying again and buying soon so that money will circulate once again and jobs will be created so that even more money can further be circulated throughout other industries in our economy. Hence, the stimulus.

 

[alchemize]

Can't find a link, but Fannie announced loosening some underwriting guidelines, as they probably overtightened in response to the subprime issue.

edit: Link

 

[Xavier434]

Originally posted by: alchemize
Can't find a link, but Fannie announced loosening some underwriting guidelines, as they probably overtightened in response to the subprime issue.

I am neck deep in this stuff right since I am currently in the process of a preapproval. The regs are still very strict and about a month ago is when I started. During that time I think it was too strict to the point where the banks were shooting both themselves and the economy in the foot because there were a lot of people with outstanding credit either being denied loans or only being approved for amounts that were way under what they could actually afford to the point where they decided to just not buy at all. That is most likely why you are hearing about some loosening now. However, I can 99.9% guarantee you that they will NOT loosen up enough to the point where problems are caused again as a result of approving those for amounts that they should not be approved for.

 

[StageLeft]

Originally posted by: Common Courtesy

Originally posted by: alchemize

Originally posted by: Ozoned

Originally posted by: alchemize
A possible "bottom" indicator today...

Pending home sales rise in December

Offtopic...say, where is Dave at lately...? I just don't feel right without my threads being trolled by him...

I think he is pissed that someone stole his oil thread.

EDIT: I was just informed by Dave that Dave was permabanned. :Q

R.I.P.

He told me the same thing. :brokenheart:

No wonder P&N hasn't been as much fun lately. I disagree with that decision but not my forum.

Dave's refusal to comply with the rules (when requested) and his attitudes after being placed on vacation for such, led to his demise.

There came a point that he had expended all of his good will "political capital"

It was the right decision.

 

[StageLeft]

Originally posted by: Xavier434

Originally posted by: alchemize
Can't find a link, but Fannie announced loosening some underwriting guidelines, as they probably overtightened in response to the subprime issue.

I am neck deep in this stuff right since I am currently in the process of a preapproval. The regs are still very strict and about a month ago is when I started. During that time I think it was too strict to the point where the banks were shooting both themselves and the economy in the foot because there were a lot of people with outstanding credit either being denied loans or only being approved for amounts that were way under what they could actually afford to the point where they decided to just not buy at all. That is most likely why you are hearing about some loosening now. However, I can 99.9% guarantee you that they will NOT loosen up enough to the point where problems are caused again as a result of approving those for amounts that they should not be approved for.

You may be looking at more legit lenders. I got a mortgage in 2003 and 2006 and had to have substantial documentation each time, although at least with the 2003 there were punks somewhere else, clearly, who's only employment documentation was make believe. Things have way tightened up, but not all lenders are equal

 

[senseamp]

Is there an income limit? I don't think I qualify for the car credit one.

 

[Xavier434]

Originally posted by: Skoorb

Originally posted by: Xavier434

Originally posted by: alchemize
Can't find a link, but Fannie announced loosening some underwriting guidelines, as they probably overtightened in response to the subprime issue.

I am neck deep in this stuff right since I am currently in the process of a preapproval. The regs are still very strict and about a month ago is when I started. During that time I think it was too strict to the point where the banks were shooting both themselves and the economy in the foot because there were a lot of people with outstanding credit either being denied loans or only being approved for amounts that were way under what they could actually afford to the point where they decided to just not buy at all. That is most likely why you are hearing about some loosening now. However, I can 99.9% guarantee you that they will NOT loosen up enough to the point where problems are caused again as a result of approving those for amounts that they should not be approved for.

You may be looking at more legit lenders. I got a mortgage in 2003 and 2006 and had to have substantial documentation each time, although at least with the 2003 there were punks somewhere else, clearly, who's only employment documentation was make believe. Things have way tightened up, but not all lenders are equal

Possibly, but I think overall most of the banks have tightened up a lot. Documentation was always required and it was always a lot. The fundamental different between now and then is the result of said documentation after the underwriters review it. Most of my knowledge on the subject comes from my father. He has been in the banking industry for over 30 years.