US Homeowner Equity Is Lowest Since 1945

[ericlp]

Originally posted by: heyheybooboo
<--- Totally debt free since 2003

I don't know how you young chaps are going to do it, but yah better 'hunker-down'

Me too paid cash for my home! Screw this BS. Now is the best time to buy a home... They are going cheap! If you can find a home for 20-30K and it will need work and probably another 5-10K put back into it... WHY NOT DO IT? You own it. No payments. No DEBT !!! Screw these banks!

There is only one reason why we are in this boat...

It's the Banks that LOANED out $$$$ To anyone and artificially raising the market because it gave people the power to SPEND more... Basically this was an illusion.

SO...... Now that the homes prices have started to fall back to reasonable levels. Buyer X see's his / her investment that was once worth 300K now it's worth 150K. Who in their right mind is going to keep making payments on a 300K piece of fucking paper???????????? Basically an IOU that is now worth 150K? I don't blame them I'd be walking too....

Now the banks want us to help bail them out? Screw em! That's the risk they took by lending out the $$$!

Good!

 

[PingSpike]

Originally posted by: Vic

Originally posted by: PingSpike
Despite all the blabbing by real estate agents, homes are not really "investments". They're a place to live that affords you a little more freedom then renting. I suppose you also get some tax advantages.

You're right that the home you live in should not be considered an investment (at least not a speculative one), but the reason to own your home is to own your home. If you rent, you're just making someone else's mortgage payment, because someone always owns it.
Otherwise, homeownership affords less freedom than renting and costs a lot more, as a lot of these people who bought at the top and now have neg equity are going to find out.

I meant the freedom to put up a garage or even paint the damn rooms. Or have a dog. Stuff like that.

 

[Vic]

Originally posted by: PingSpike

Originally posted by: Vic

Originally posted by: PingSpike
Despite all the blabbing by real estate agents, homes are not really "investments". They're a place to live that affords you a little more freedom then renting. I suppose you also get some tax advantages.

You're right that the home you live in should not be considered an investment (at least not a speculative one), but the reason to own your home is to own your home. If you rent, you're just making someone else's mortgage payment, because someone always owns it.
Otherwise, homeownership affords less freedom than renting and costs a lot more, as a lot of these people who bought at the top and now have neg equity are going to find out.

I meant the freedom to put up a garage or even paint the damn rooms. Or have a dog. Stuff like that.

Ah true that.

 

[Vic]

Originally posted by: ericlp

Originally posted by: heyheybooboo
<--- Totally debt free since 2003

I don't know how you young chaps are going to do it, but yah better 'hunker-down'

Me too paid cash for my home! Screw this BS. Now is the best time to buy a home... They are going cheap! If you can find a home for 20-30K and it will need work and probably another 5-10K put back into it... WHY NOT DO IT? You own it. No payments. No DEBT !!! Screw these banks!

There is only one reason why we are in this boat...

It's the Banks that LOANED out $$$$ To anyone and artificially raising the market because it gave people the power to SPEND more... Basically this was an illusion.

SO...... Now that the homes prices have started to fall back to reasonable levels. Buyer X see's his / her investment that was once worth 300K now it's worth 150K. Who in their right mind is going to keep making payments on a 300K piece of fucking paper???????????? Basically an IOU that is now worth 150K? I don't blame them I'd be walking too....

Now the banks want us to help bail them out? Screw em! That's the risk they took by lending out the $$$!

Good!

Because it's the borrower, not the bank, that is liable for the deficiency. They, not the bank, bought the house for $300k. If they walk away and the bank ends up being out half that, then the IRS will determine that $150k loss that the bank charged off to be income to the borrower, they're going get an ugly surprise known as a 1099-C.

 

[BigDH01]

Originally posted by: Vic

Originally posted by: ericlp

Originally posted by: heyheybooboo
<--- Totally debt free since 2003

I don't know how you young chaps are going to do it, but yah better 'hunker-down'

Me too paid cash for my home! Screw this BS. Now is the best time to buy a home... They are going cheap! If you can find a home for 20-30K and it will need work and probably another 5-10K put back into it... WHY NOT DO IT? You own it. No payments. No DEBT !!! Screw these banks!

There is only one reason why we are in this boat...

It's the Banks that LOANED out $$$$ To anyone and artificially raising the market because it gave people the power to SPEND more... Basically this was an illusion.

SO...... Now that the homes prices have started to fall back to reasonable levels. Buyer X see's his / her investment that was once worth 300K now it's worth 150K. Who in their right mind is going to keep making payments on a 300K piece of fucking paper???????????? Basically an IOU that is now worth 150K? I don't blame them I'd be walking too....

Now the banks want us to help bail them out? Screw em! That's the risk they took by lending out the $$$!

Good!

Because it's the borrower, not the bank, that is liable for the deficiency. They, not the bank, bought the house for $300k. If they walk away and the bank ends up being out half that, then the IRS will determine that $150k loss that the bank charged off to be income to the borrower, they're going get an ugly surprise known as a 1099-C.

No they won't. The gov't passed a law protecting people from 1099-Cs for mortgage debt forgiveness. F***ed borrowers have no skin in the game and nothing to lose except bad credit by walking away. It's a free pass to people who can't do math and a big f**k you to anyone that didn't buy.

 

[smack Down]

Originally posted by: blackangst1

Originally posted by: EagleKeeper

Originally posted by: fleshconsumed
One out of ten owes more than his house is worth? To me that sounds high, really high.

Options:
1) Housing prices are plumetting due to lack of buyers in the area (for any reason)

2) People purchase over inflated housing with the intent of flipping to other suckers

3) People purchased with adjustables that are exceed their budget

4) People were pushed into a over priced house expecting the market to catch up.

/Yep

And people need to put this in perspective. Youre only upside down if

1. The fair market value has dropped that far, or
2. You actually sell.

Otherwise it really doesnt matter. It's not like people are losing money. If you keep your house, when the market rebounds, youre back in the black.

I seriously doubt nationwide the majority of housing markets have dropped that far. Sure there are pockets of areas, but certainly not everywhere. Here in Phoenix we havent been affected that much.

Again, those in standard mortgages, which is most people, havent lost a cent. Its like stocks. If you have a 401k worth say, 300k, and the market takes a 10% dumps, even if ALL your stocks are part of that dump, you only lose money of you sell. If you wait 3-4 years, you'll be back up. So much tin foil in here.

Bad advice. First of all if you think you will see this prices in again in 3-4 years I've got 37,636 properties in Miami for you to invest in. Second the average person owes a house for less then 10 years. If you are not going to see a benefit of own vs rent by that time you are much better off not owning.

 

[Jhhnn]

I think that homes have been an investment of sorts, at least until recently. In the post-WW2 era, homeowners could count on a growing economy and wage increases along with inflation to diminish the value of their payment amount over time, and, as time passed,they could rely on positive equity as reserves if they really, really needed them... Ultimately, they could rely on full equity to reduce overhead, allow savings, and ease the path to retirement.

While it's true that it might not have yielded as great a return as some other investment vehicles, it was relatively safe and worry free, and didn't require specialized knowledge to properly manage...

People saw the proposition as a long term (repeat, longterm) commitment and investment, not as a way to make a fast buck... Bankers looked at it from the same perspective, as they often carried notes to maturity, so they worked hard at exercising due diligence in the selection of borrowers...

Fast forward to the modern mortgage pipeline, where the objective is to take a cut off the top, shuffle the risk off onto somebody, anybody, else... Churn is the name of the game, even for the investors at the end of it. That mentality eventually filtered down to a lot of homebuyers, as well, with cheap short term creative financing just adding fuel to the fire... there was a total disconnect between the long term ability of the buyer to pay and the ability of the mortgage holder to show a profit... covered over by a thin veneer of rising prices and refinance...

No equity? No sh!t. The guys who sold near the market peak took their equity, and that of the buyer, as well- it's the nature of a speculative market, aggravated and intensified by the use of short term leverage by both recent homebuyers and holders of mortgage backed securities. It's bad enough that it threatens the banks themselves, the guys who lent the money in the first place, because they operate on the principle of fractional reserves, a form of leverage all its own...

 

[blackangst1]

Originally posted by: smack Down

Originally posted by: blackangst1

Originally posted by: EagleKeeper

Originally posted by: fleshconsumed
One out of ten owes more than his house is worth? To me that sounds high, really high.

Options:
1) Housing prices are plumetting due to lack of buyers in the area (for any reason)

2) People purchase over inflated housing with the intent of flipping to other suckers

3) People purchased with adjustables that are exceed their budget

4) People were pushed into a over priced house expecting the market to catch up.

/Yep

And people need to put this in perspective. Youre only upside down if

1. The fair market value has dropped that far, or
2. You actually sell.

Otherwise it really doesnt matter. It's not like people are losing money. If you keep your house, when the market rebounds, youre back in the black.

I seriously doubt nationwide the majority of housing markets have dropped that far. Sure there are pockets of areas, but certainly not everywhere. Here in Phoenix we havent been affected that much.

Again, those in standard mortgages, which is most people, havent lost a cent. Its like stocks. If you have a 401k worth say, 300k, and the market takes a 10% dumps, even if ALL your stocks are part of that dump, you only lose money of you sell. If you wait 3-4 years, you'll be back up. So much tin foil in here.

Bad advice. First of all if you think you will see this prices in again in 3-4 years I've got 37,636 properties in Miami for you to invest in. Second the average person owes a house for less then 10 years. If you are not going to see a benefit of own vs rent by that time you are much better off not owning.

OK. So what did I say that actually incorrect? And for curiousity's sake Id like a link to your 10 year statement. Even at 10 years you are more than likely going to be in the black. With few exceptions.