There is no housing bubble...No, really, there isn't....

[truebrit71]

http://money.cnn.com/2006/09/13/real_estate/foreclosures_spiking/index.htm?cnn=yes

More proof that the statement "the economy is getting stronger" is complete and utter bullshit....

[redqueen]

1. Well, if you're already wealthy, it's doing great!

And really, who else matters?

:sarcasm:

[OrangeCountyDemocrat]

2. We Ain't Seen Nothin' Yet!!

I think that 2007 is going to be the year the Shit Really Hits The Fan. Things are going downhill now, but I don't expect it to be truly obvious until after the elections......gee, wonder why.

Next year, look for the market to slow to a crawl, and foreclosures to skyrocket. Anybody who finds themselves underwater will be in trouble. Anybody who is living month to month, that gets an increase in their Home Equity Loan interest rate, is in trouble.

[truebrit71]

4. I totally agree with you, this is just the pre-cursor of things to come...

....the reason the economy was doing anything at all is because it was being driven by consumer buying. The cheap money "created" by home equity loans was responsible for the consumer buying, but now that interest rates have crept significantly higher, causing two knock-on effects, no-one re-financing anymore and much higher monthly payments, this once flowing river is nothing more than a trickle...and that means that regardless of the upbeat assessments we are being spoon-fed by this government, the economy is about to take a major kick in the stomach.

My wife and I just paid off all our credit cards (it wasn't that much debt to be sure, but I sleep better at night knowing I don't owe anyone anything), and have reverted to the tried and true "if we can't pay cash for it, we don't buy it" mode...

It will get very nasty I think, and sooner rather then later...

[OrangeCountyDemocrat]

6. Agree Truebrit.....AND.....

There is Soooooo much tied to the housing industry right now, that all the normal evidence that the SPINMEISTERS are trying to extrapolate and make sense of, are obsolete.

Not only was the economy held together by people tapping into their homes, but also there are jobs upon jobs created and financed by the housing increases. From the contractor or Home Depot worker at the bottom, through the Mortgage Bankers, Loan Officers, Realtors in the middle, through to the Home Builders. They all were subsidized, and soon it will correct.

There will be layoffs, and severe hardships visited upon many employees dependent upon the real estate market.

[OrangeCountyDemocrat]

3. www.thehousingbubbleblog.com

www.thehousingbubbleblog.com

[fed-up]

5. Prices are holding steady in San Bruno, CA (some higher than asking)

Not all markets are heading into the toilet right now, In San Bruno, CA (12 miles south of San Francisco-bay area) houses are selling close to and even some higher than asking prices. Average days on the market is 27. I grew up in San Bruno, so for the fun of it I keep tabs on the market there.

Scroll down the page for data on individual houses sold
http://www.sanbrunohomevalues.com/home_values/list.php
SOLD HOMES
Average DOM Average Price/Sq.Ft. High Price Low Price
27 days on market $543 / ft2 $1,199,000 $579,000

Homes in my area (Chico, CA-northern CA) are selling close to asking (except those that unrealistically added 10-15 percent over last year's prices) and most are selling in under 60 days if priced fairly.

The only problem here is that there are about 4 times as many houses on the market as normal, so buyers have more to choose from. Number of sales is only down about 5% from normal.

Not all markets are equal, so please don't spread fear and gloom when it does NOT apply to all markets.



*Not to say that the shit won't hit the fan in all areas by next year......

[Porcupine]

13. You neglect the oversupply in the local rental market.

I also live in Chico CA. There are a few things that are missing from the above post.

1. There is currently a huge oversupply of rental properties in Chico right now. Houses selling for $300k are renting for $1200 per month. Many low income units are sitting vacant with no takers and no inquiries.
2. The local economy has been fed by people from other areas buying Chico housing as investment stock and making 15% or more per year on equity; that's gone.
3. Chico wages cannot support first time homebuyers. More often the economy cannot support enough renters who can pay rent 9 months out of 12.

This means that as soon as investors realize that they cannot get free cash by buying property in town the gig is up for a significant fraction of local workers. Also with housing sales slowing in other areas like San Bruno retirees cannot as easily cash out and purchase several Chico homes as rentals. This kind of house flipping has been feeding the local economy for at least a decade.

This kind of slowdown is happening in peripheral markets all across the country. It doesn't take many months of no rent to force a marginal investment property owner to sell. Eventually they have to rent at a loss, sell it or lose their insurance coverage because you cannot insure vacant property.

The housing bubble is real and it's kicking my ass big time. Signed: A chico property manager.

[mnhtnbb]

7. We just got our approval today to refinance to a 5 year ARM

since we are planning to sell our house within 2-4 years and retire. The cash out of this house is going down to the home we're building in Panama.
I hope the market has improved by the time we want to sell--because
the change in the payment schedule is frightening!

[fed-up]

8. You might want to sell NOW and rent for 2 years-things won't get better

until * is out of office and the Dems have a few years to get things back on track.

I don't know what your house is worth or what rent is in your area, but you may want to crunch some numbers....

[OPERATIONMINDCRIME]

9. Why? 30 Year Fixed Rates Right Now Are Equal To The ARM's, And In Some

cases even less!

[mnhtnbb]

10. We have 1/2 point better interest rate, interest only.

[OPERATIONMINDCRIME]

11. What Rate Did You Get For The ARM?

[mnhtnbb]

12. 5 7/8 Jumbo