Mortgage rates are going up.

[LegendKiller]

Originally posted by: alkemyst
Depends on where and what. Problem is if one waits to the bottom, then everything is on it's way up. Rates are already increasing and home sales as well.

By 2009 it's doubtful any of hte top builders will still have inventory worth buying (condos will probably be all that's left).

Those that think renting is still better than home ownership are on the bottom tier usually though. Renting makes no sense when you factor in the costs.

LOL, I guess you haven't really run through the numbers...

I had to build an Excel model showing full cash amortization of the mortgage, including PV of all renting and mortgage payments, using my own parent's bills for 10 years of maintenance and such. I then input the Shiller data, showing that it's absolutely stupid to buy at this point.

But of course, I am "bottom tier". So is anybody who uses logic. Logic=bottom tier.

 

[Special K]

Originally posted by: alkemyst

Originally posted by: Turin39789

Originally posted by: rivan

Originally posted by: LegendKiller

Originally posted by: Capt Caveman
Nothing wrong with buying a place now, rates are still relatively low and lots of bargains to be found.

Prices aren't going to be going up appreciably for a long time. You're just pissing away money if you're buying anywhere but Charlotte.

I would argue that, for people in proper position to be buying a home, a mortgage payment is money far better spent than rent, even if when the home is sold it sells for the same amount paid.

Edit: I think it's a perfect time to buy, if you're in the market for a 3+ year residence.

8 - 12 months from now, that will be the time to buy

Depends on where and what. Problem is if one waits to the bottom, then everything is on it's way up. Rates are already increasing and home sales as well.

By 2009 it's doubtful any of hte top builders will still have inventory worth buying (condos will probably be all that's left).

Those that think renting is still better than home ownership are on the bottom tier usually though. Renting makes no sense when you factor in the costs.

See my NYT rent vs. buy calculator above. For any reasonable set of numbers I run, it makes much more sense financially to rent. Granted it all depends on where you live, but since you made a general statement that anyone who rents is on the "bottom tier", I had to disagree with you.

 

[Slew Foot]

The guy works for a homebuilder, he's not exactly unbiased.

 

[LegendKiller]

Originally posted by: Slew Foot
The guy works for a homebuilder, he's not exactly unbiased.

LOL, now it makes sense. He might as well be named Larry Yun or David Lareah.

 

[CasioTech]

Originally posted by: LegendKiller

Originally posted by: Capt Caveman
Nothing wrong with buying a place now, rates are still relatively low and lots of bargains to be found.

Prices aren't going to be going up appreciably for a long time. You're just pissing away money if you're buying anywhere but Charlotte.

charlotte??? hahah let me guess, that's where YOU live right?

It's a great time to get in, short sales are everywhere and TONS of deals are to be had.

Hopefully by the end of the year prices will be on the rise once more.

as for the growing rates, this is a good thing, demand is going up again and this will keep the riff-raff buyers from trying to commit more mortgage scams. Well, nothing can keep the mortgage scams away.

 

[Corbett]

Originally posted by: LegendKiller

Originally posted by: Capt Caveman
Nothing wrong with buying a place now, rates are still relatively low and lots of bargains to be found.

Prices aren't going to be going up appreciably for a long time. You're just pissing away money if you're buying anywhere but Charlotte.

I'm in the middle of closing on a $300,000 home in Michigan for $150,000. I'll wait it out, thanks.

 

[CasioTech]

Originally posted by: LegendKiller

Originally posted by: rivan
I would argue that, for people in proper position to be buying a home, a mortgage payment is money far better spent than rent, even if when the home is sold it sells for the same amount paid.

Hardly. Housing is a shitty "investment" that is nothing more than a giant vacuum out of your wallet. The "tax benefit" is nothing more than a government subsidy, paid for all of society, to reduce interest rates. You're still paying 2/3 of your rate (at best, 4/5 at worst). Once you include time, maintenance, taxes, insurance, and most importantly, *DEPRECIATION*, it's a losing asset in this market.

Most of your payments in the beginning are interest anyway, so all you're doing is paying the bank for the luxury of living in their house, no different than renting.

The scam that perpetuated the housing bubble is that housing was a good "investment" and saved so much more money, or gained money. That's a bald faced lie perpetuated by the NAR/MBA to get people to buy. It ignores the simple economics.

Will I buy a house when I think it's appropriate? Absolutely, but no way in hell I am buying now, you're just pissing money away. Why will I buy? Not for "investment", as a house is actually a pretty crappy "investment" historically.


edit: Your time horizon had better be more than 3 years. This downturn might stop by the end of the year but it won't be appreciating for another year or two to any appreciable level.

are you a bitter renter or something? I have made tens of thousands flipping properties and only now am breaking even on my last property which I am stuck with and it's still cheaper than renting the same property.

some of my close friends and family netted well over 400k flipping properties from the year 2001-2005.

 

[LegendKiller]

Originally posted by: CasioTech
are you a bitter renter or something? I have made tens of thousands flipping properties and only now am breaking even on my last property which I am stuck with and it's still cheaper than renting the same property.

some of my close friends and family made well over 400k flipping properties from the year 2001-2005.

Great, you made that for those periods. This is now, get with the fucking picture. Flipping houses was a ridiculous phenomena that has largely gone away, hopefully for good.

Bitter renter? LOL. I could call up and get a jumbo now to buy a house where I live in Fairfield Co CT any time I want. I have spoken with a few friends in the area in mortgages.

But I refrain since I have seen what's happening up here.

This bubble will deflate until capital comes back into the market to add liquidity. I work in securitization for one of the largest banks in the world. Securitization liquidity is *VERY* low, spreads are *VERY* high, and finding a lot of interested money is very difficult.

Banks are preserving capital and hedge, pension, and mutual funds are too busy chasing commodities.

 

[LegendKiller]

Originally posted by: Corbett

Originally posted by: LegendKiller

Originally posted by: Capt Caveman
Nothing wrong with buying a place now, rates are still relatively low and lots of bargains to be found.

Prices aren't going to be going up appreciably for a long time. You're just pissing away money if you're buying anywhere but Charlotte.

I'm in the middle of closing on a $300,000 home in Michigan for $150,000. I'll wait it out, thanks.

Not a bad deal, but I wouldn't doubt it'll go below that.

 

[mshan]

"It's a great time to get in, short sales are everywhere and TONS of deals are to be had."

Why don't you ask some bottom-fishing Nasdaq investors who got in at Nasdaq 3000 after it fell from it's peak value of 5000 in 2001, and see what they think today, almost 7 years later.

"Cheap" and true value are not necessarily the same thing.

That being said, housing market isn't as efficient as stock market, so even now there are probably properties that are still priced for the peak of the housing bubble, and other properties that reflect reality today, even in the same community.

 

[CasioTech]

hopefully NOT for good. As soon as the market is on the rise again, I will be getting back in. I don't know about you but I don't want to be just above broke, nor do I want to work a shitty 9-5 job ever again (which I haven't had to do until recently.)

rent is still low in some areas because the landlords bought their condos and homes when they were $30-$40k 50 years ago. The more and more properties being sold in progressive areas causes new landlords to drastically raise rent just to cover their expenses alone.

these past few months were THE BEST time to buy. It's only going to get worse and if you don't believe that, i'll be seeing you post in another housing thread in a couple of years saying "shit, I should have bought a home back in 08."

The biggest pessimists are the renters because THEY are the ones flushing money down the toilet with nothing to show for it. So trash talking real estate is the only way they feel good about justifying their actions.

 

[Corbett]

Originally posted by: LegendKiller

Originally posted by: Corbett

Originally posted by: LegendKiller

Originally posted by: Capt Caveman
Nothing wrong with buying a place now, rates are still relatively low and lots of bargains to be found.

Prices aren't going to be going up appreciably for a long time. You're just pissing away money if you're buying anywhere but Charlotte.

I'm in the middle of closing on a $300,000 home in Michigan for $150,000. I'll wait it out, thanks.

Not a bad deal, but I wouldn't doubt it'll go below that.

Its possible, but I couldnt pass it up. Even if it dips another $20,000, i'll take the risk and I wont be kicking myself for holding out 5 years from now when the home apprasies for double what I purchased it for. Most of the homes in the neighborhood are being bought up and the guy who hooked the water back up says he is doing more hookups than shutdowns now.

 

[CasioTech]

Originally posted by: LegendKiller

Originally posted by: Corbett

Originally posted by: LegendKiller

Originally posted by: Capt Caveman
Nothing wrong with buying a place now, rates are still relatively low and lots of bargains to be found.

Prices aren't going to be going up appreciably for a long time. You're just pissing away money if you're buying anywhere but Charlotte.

I'm in the middle of closing on a $300,000 home in Michigan for $150,000. I'll wait it out, thanks.

Not a bad deal, but I wouldn't doubt it'll go below that.

With the prices of construction today, a developer himself probably couldn't build a house for cheaper than that.

 

[LegendKiller]

Originally posted by: mshan
"It's a great time to get in, short sales are everywhere and TONS of deals are to be had."

Why don't you ask some bottom-fishing Nasdaq investors who got in at Nasdaq 3000 after it fell from it's peak value of 5000 in 2001, and see what they think today.

"Cheap" and true value are not necessarily the same thing.

Agreed. The trends, while positive last month, show that losses are still building. Spring brought some price decline relief but I do believe that'll be eroded come fall.

 

[LegendKiller]

Originally posted by: CasioTech

Originally posted by: LegendKiller

Originally posted by: Corbett

Originally posted by: LegendKiller

Originally posted by: Capt Caveman
Nothing wrong with buying a place now, rates are still relatively low and lots of bargains to be found.

Prices aren't going to be going up appreciably for a long time. You're just pissing away money if you're buying anywhere but Charlotte.

I'm in the middle of closing on a $300,000 home in Michigan for $150,000. I'll wait it out, thanks.

Not a bad deal, but I wouldn't doubt it'll go below that.

With the prices of construction today, a developer himself probably couldn't build a house for cheaper than that.

Which is why they aren't building. Look at GMAC RFC/ResCap.

 

[LegendKiller]

Originally posted by: CasioTech
hopefully NOT for good. As soon as the market is on the rise again, I will be getting back in. I don't know about you but I don't want to be just above broke, nor do I want to work a shitty 9-5 job ever again (which I haven't had to do until recently.)

rent is still low in some areas because the landlords bought their condos and homes when they were $30-$40k 50 years ago. The more and more properties being sold in progressive areas causes new landlords to drastically raise rent just to cover their expenses alone.

these past few months were THE BEST time to buy. It's only going to get worse and if you don't believe that, i'll be seeing you post in another housing thread in a couple of years saying "shit, I should have bought a home back in 08."

The biggest pessimists are the renters because THEY are the ones flushing money down the toilet with nothing to show for it. So trash talking real estate is the only way they feel good about justifying their actions.

You still don't get it. Buying a house is nothing more than renting in the beginning. The "equity" built up is very minor and can easily be lost of your asset is depreciating. Houses are *STILL* depreciating. Hopefully you've been looking at the Case-Shiller Index, but I don't think you have.

It's not even close to the "best" time to buy. There isn't one indication of positive support for prices. Nobody is handing out cheap mortgages. More mortgages are resetting. There's higher inventory that at any point in history and foreclosures are skyrocketing, adding even more very cheap inventory. Prices STILL have to come down another 15-20% nationwide average, we're only half way through this.

I am a realist, as I work in finance, I see the fundamentals, and I see how the actual market works. Sure, you made money in the last 5-7 years on an up market, great, but that market is gone. We're about to return to "normalcy" where housing appreciates maybe 0.3% against inflation, which is a pretty shitty asset return.

Sure, I rent, but I don't have to. If I were to go out and buy a similar place that I now rent, I'd be paying about 800k for it. My old place in Manhattan would easily cost 1MM, I was renting for far less.

I'm not looking for a quick buck, as you seem to be. Carlton Sheets, "Flip this house" and all of that trash doesn't interest me. My money is made by me working 8-9 in i-banking and I am quite fine with that. I don't need home runs to be successful in life, I just am hitting triples all day while you're praying for one.

 

[Special K]

Originally posted by: CasioTech


The biggest pessimists are the renters because THEY are the ones flushing money down the toilet with nothing to show for it. So trash talking real estate is the only way they feel good about justifying their actions.

See the calculator I posted above. For any reasonable set of numbers I run, renting makes far more sense.

 

[LegendKiller]

For those who think things "can't get any better", show me where things look positive?

http://i21.photobucket.com/alb...CS-GraphOne6-10-08.jpg

http://i21.photobucket.com/alb...CS-Graphtwo6-10-08.jpg

http://i21.photobucket.com/alb...-Graphthree6-10-08.jpg

 

[LegendKiller]

Originally posted by: Special K

Originally posted by: CasioTech


The biggest pessimists are the renters because THEY are the ones flushing money down the toilet with nothing to show for it. So trash talking real estate is the only way they feel good about justifying their actions.

See the calculator I posted above. For any reasonable set of numbers I run, renting makes far more sense.

He doesn't need calculators to show what's happening now. He knows he made money in the past and he knows he can't lose money now. Logic and reality have no place on the internet.

 

[alkemyst]

Originally posted by: LegendKiller

Originally posted by: alkemyst
Depends on where and what. Problem is if one waits to the bottom, then everything is on it's way up. Rates are already increasing and home sales as well.

By 2009 it's doubtful any of hte top builders will still have inventory worth buying (condos will probably be all that's left).

Those that think renting is still better than home ownership are on the bottom tier usually though. Renting makes no sense when you factor in the costs.

LOL, I guess you haven't really run through the numbers...

I had to build an Excel model showing full cash amortization of the mortgage, including PV of all renting and mortgage payments, using my own parent's bills for 10 years of maintenance and such. I then input the Shiller data, showing that it's absolutely stupid to buy at this point.

But of course, I am "bottom tier". So is anybody who uses logic. Logic=bottom tier.

Are you seriously in the business or just read a lot about it?

There are some just 'meant to rent'.

Not all markets are declining. RMIC.COM has a good tool that indexes neighborhoods.

It's a really good time to score a deal on a single family home in many markets for those planning on staying 5 years...builders are giving away homes practically.

However, you have to be able to AFFORD them.

I really don't think you understand the model you are debating or coming in far to low into it to make the numbers work. Have you lived on your own yet?

 

[alkemyst]

Originally posted by: LegendKiller
For those who think things "can't get any better", show me where things look positive?

http://i21.photobucket.com/alb...CS-GraphOne6-10-08.jpg

http://i21.photobucket.com/alb...CS-Graphtwo6-10-08.jpg

http://i21.photobucket.com/alb...-Graphthree6-10-08.jpg

looks to me that the curve is close to correcting itself. I expect it to drop a little more short term in many areas, but you can see the past trend and see where the values should be.

 

[LegendKiller]

Originally posted by: alkemyst
Are you seriously in the business or just read a lot about it?

There are some just 'meant to rent'.

Not all markets are declining. RMIC.COM has a good tool that indexes neighborhoods.

It's a really good time to score a deal on a single family home in many markets for those planning on staying 5 years...builders are giving away homes practically.

However, you have to be able to AFFORD them.

I really don't think you understand the model you are debating or coming in far to low into it to make the numbers work. Have you lived on your own yet?

Here's a hint sparky. I have my MBA and am a CFA charterholder, I work in Manhattan. My last apartment in Manhattan (not the one I currently am in) cost me $3,500/mo and I had plenty of money left over at the end of the month. That's after my wife and I paying over 1,200/mo in student loan payments. I was so far out of the "tax rebate" that I didn't even get a letter that bothered to tell me I didn't qualify.

I've been renting for about 7 years in various places, Minneapolis, Miami, Orlando, Reston VA, Manhattan, and now Greenwich CT.

My job is to quantify risk, evaluate assets, negotiate indentures, note purchase agreements, servicing and selling agreements, originate and close securitization transactions for a conduit with billions in assets.

One of the areas I look into is housing. There isn't one bank that's going there in any major way right now. Nobody is buying it, not while they're still writing down over $300Bn. Lehman just took a massive hit due to their foolishness.

Wow, you work at a home builder. Big fucking deal. I've seen plenty of deals go under with home builders, Lehman is an example.

You've still not countered my data or SpecialK's calculator.

 

[LegendKiller]

Originally posted by: alkemyst

Originally posted by: LegendKiller
For those who think things "can't get any better", show me where things look positive?

http://i21.photobucket.com/alb...CS-GraphOne6-10-08.jpg

http://i21.photobucket.com/alb...CS-Graphtwo6-10-08.jpg

http://i21.photobucket.com/alb...-Graphthree6-10-08.jpg

looks to me that the curve is close to correcting itself. I expect it to drop a little more short term in many areas, but you can see the past trend and see where the values should be.

LOL, that's a springtime bump. The trend is still down with only three places or so not still depreciating.

 

[V00DOO]

If we learned anything from the privious house bubbles were house prices will stay flat for a couple of years after bottoming out. Food and energy cost are going thru the roof yet wages are flat. What evidents do you have that indicate house prices will rebound in 2009 or later. IRC, from 1900-2000 house price appreciate about 1-2 percert above inflation which makes it a lousy investment IMO. If you think Suprime Loans are bad check out the Alt-A crisis coming. Link to youtube.

 

[MrChad]

*sigh*

I need to stop clicking on these threads. They're depressing the hell out of me.