Let's talk about mortgages, forclosures, etc. and the impact on the American Economy [Archive]

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Apotheosis

08-06-2007, 01:45 PM

Ok. So, the next big panic in the market is obviously the failure of subprime borrowers to follow through on their commitment.

2 - 3 years ago, a friend of mine in the real estate business told me this was going to happen.

Some people are claiming this is an impending economic collapse, and some people claim this is no big deal, not to worry.

For those of us not completely informed, what's the story?

Trouble

08-06-2007, 02:21 PM

I'm afraid that if more people default it will drive prices down further and I won't be able to break even if I try to sell my condo in the next 5 years.

I didn't get a sub-prime loan, but I did buy more home than I needed so I have to make decisions like potential career and/or city changes very seriously.

Anyone want to buy a condo in Arlington, VA? Heh.

Gan

08-06-2007, 02:27 PM

Its a correction in the market, much like the dot.com correction was that happened in the late 90's.Housing prices inflated way over their actual value by excessive demand. This excessive value was speculated by people who were getting interest only loans in the short term in order to realize a gain over the time period when the property was reappraised later (typical is 3 and 5 year hybrids). Now that the over inflated market (see east coast, west coast, upper midwest regions) is correcting, property values are falling back to normal levels. This means that these speculative buyers are unable to refinance the short term loans without additional capital investiture. And because many of these loans are owned by people who could barely afford them to begin with, they can not afford to make the increased payments now that the ARM's are past the fixed portion of their term and have jumped by 5 to sometimes 10% higher than the original introductory rate. So with no equity in the home and faced with the inability to make the monthly payments and sustain the level of lifestyle they currently partake in, the house is given back to the bank (foreclosure). This is one of several scenarios thats happening across the US.

This increased rate of foreclosures are putting many sub-prime lenders out of business because they are getting stuck holding the bag. Additionally, with the rise in interest rates, its getting harder to qualify for loans as lenders become less open to risky applicants. So now there are less buyers for homes (both new and used), so now that impacts new construction purchases. This is a trickle down effect felt through many sectors of the economy once you start talking about a drop in residential home construction. I've received two notices of subprime lenders going insolvent in the past 5 days in our area. I cant imagine how thats looking in areas harder hit.

Worry? I dont see it as long term worry or concern. I'm hoping the effect will level off before it causes a recession like atmosphere the savings and loan debacle in the mid 80's caused. Its a correction in the market. In fact, due to stringent lending laws here in Texas, the housing market in my area (Houston) has only had a negative impact by about 4%. As compared to high teens to low twenty percentile ranges seen along the east coast, Florida, west coast, and the upper mid-west.

The nice thing is that we have entities like the Federal Reserve that can watch and strategize for things like this in hopes of levelling out the effects felt by the people. Otherwise I would indeed be worried if we didnt have that safeguard monitoring and adjusting bank/lending rates which hold so critical an influence on our economy.

As with any shift, people will have to brace for however this correction effects their piece of the economic pie.

On an aside, the increase in fuel costs have had a greater impact on our economy than this housing correction. In my opinion.
Sorry for the WALL O TEXT. This proxy server wont let me have extra spacing. :(

Jorddyn

08-06-2007, 03:00 PM

When the median price of a home is 10x the median income in an area, there needs to be a correction.

I think Iowa City is currently running around 3.5 to 1, which isn't too bad, but we're definitely seeing a correction.

I see it as knocking back investors and allowing Joe Schmo to again be able to afford a house. Bad thing? I don't think so.

Jorddyn

SpunGirl

08-06-2007, 04:22 PM

Right now, I'm laughing at all the suckers in Vegas who bought ten houses, tried to flip them, and can't. Now their ARMs are coming due and they can't afford the payments - someone said Vegas is in the top five for foreclosures? I'm also really glad Jake and I sold our condo when we did, or we could very well be upside down on our note.

-K

Ignot

08-06-2007, 07:50 PM

Fed meets tomorrow. Also, I don't think it is going to bring about some massive economic collapse but it is a correction that will be felt by everyone, like people trying to sell or people who can't afford payments anymore. Everyone is effected and forced to make different decisions.

I agree with GAN, fuel is a much bigger worry IMO.

FED says primary concern is inflation (big suprise) but we will see what they do tomorrow.

Either way, stock market is moving tomorrow, watch out if those rates move the wrong way and you could see a big pullback.

Keller

08-06-2007, 08:14 PM

I think most of all it will be felt by the institutional investors (pension funds) who have invested in the bonds.

Ignot

08-06-2007, 08:25 PM

I havent followed the Bear Stearns story in to much detail but both their hedge funds have gone bankrupt (i think one is like 90% bankrupt) and their CEO just left after taking a very aggressive stance on the mortgage market. Shame that he left like he did when it was his ideals that brought them there. This is just hearsay from my coworkers but it's probably accurate.

Keller

08-06-2007, 08:34 PM

The Co-president was fired. The CEO is still in place.

Seran

08-06-2007, 08:47 PM

The central valley of California has seen one of the biggest rises in the nation, with Bakersfield (laugh, insult all you want) being near the top of the list. Currently there are several thousand foreclosures on the market, with a good bit of that due to agricultural workers who jumped on the low interest rates and quick n' easy lenders who talked them into the ARMs, interest only, and floating payment loans.

The consequence thus far has been an 8% drop in median home prices in the area, and over 6k new/resale homes on the market that'll likely drop it another ten. You should see the pools, appliances, entertainment packages being offered by all the new home builders, it is insane.

Alot of the second tier construction companies and suppliers are feeling the pain, and likely you'll see their number of bankruptcies start to rise. Along side this will be mergers between the larger home builders who'll cluster together to survive their over-zealous building.

This is needed, but as said before is only a shadow of the energy woes caused by speculation and under-regulated (read: manipulated) refinery shut downs.

Gan

08-06-2007, 08:57 PM

The Fed's stance a week ago.
http://money.cnn.com/2007/08/02/news/economy/kroszner_subprime.reut/index.htm?postversion=2007080214

American Home Mortgage (an Alt-A lender) is one of the biggest casualties in the market. Countrywide looks like it has the liquidity to handle any changes for the near future. I dont know how the market correction will impact them past the end of the year. However, AHM's competition with Countrywide just evaporated, so on some front thats good news if Countrywide can extract any decent loan applicants out of it. Thats doubtful considering new signs of lender tightening on loan qualifications.

I heard rumor that a builder/lender combo was in trouble but I cant remember the name to do a lookup. I'll have to recheck again tomorrow at work.

Found it. Beazer Homes.
http://money.cnn.com/2007/08/01/real_estate/homebuilders.reut/index.htm?postversion=2007080112

Keller

08-07-2007, 10:55 AM

Pretty good article from CNN Money (http://money.cnn.com/2007/08/06/markets/privateequitybubble.fortune/index.htm)

I don't share the gloomy outlook on private equity, but it offers a very good explanation of the last 7 years and why we're here now.

Gan

08-07-2007, 11:05 AM

Excellent article.

Jazuela

08-07-2007, 11:19 AM

There's a foreclosure in my neighborhood. That's a little scary, because this is a very -old- middle-class neighborhood where a good chunk of the residents have owned their homes for 20+ years. While those people have nothing to worry about as far as mortgage payments go, it does raise concern for people who are starting to downsize and move to smaller places, and want to make a profit on their homes to afford the current rates of their new digs.

So far we haven't seen too much of a decrease in the over-priced homes, and if I was to put my house up for sale today I'd easily get a buyer with a decent $60,000 profit over what we bought it for 6 years ago. That's down from a $100,000 profit, but it's still decent, and we never really expected the market to go up that much in the first place. Also fortunately, we've only been here for 6 years and aren't planning on selling any time soon.

I just hope we don't get -too- many more foreclosures in the area; we'd like to keep our property value at -least- as high as it was when we bought it during the mid-slump.

Clove

08-07-2007, 12:35 PM

I'm just digging my fixed 5.685%. Not going to see that rate again for a long time. Prices in my neck of New England have plateau'd but haven't really dropped yet except in condos because we have a stupid oversupply.

The market is correcting and over the next several years the real estate market will stabilize.

Gan

08-07-2007, 12:39 PM

Heh, I'm loving my 5.0 fixed as well, which will really come in handy when my current home is turned into a rental.

I know several people who are liquid enough to attend a few foreclosure sales that will be picking up houses for pennies on the dollar without needing a lender. Its going to be a hayday for those guys.

Gan

08-07-2007, 02:35 PM

http://www.breitbart.com/images/common/dot.gifAug 7 02:20 PM US/Eastern
By MARTIN CRUTSINGER
AP Economics Writer

WASHINGTON (http://search.breitbart.com/q?s=) (AP) - The Federal Reserve (http://search.breitbart.com/q?s=) left a key interest rate unchanged on Tuesday as worries about inflation (http://search.breitbart.com/q?s=) trumped concerns about turbulent financial markets.

Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate (http://search.breitbart.com/q?s=), the interest that banks charge each other, at 5.25 percent, where it has been for more than a year.

The Fed decision came after a volatile couple of weeks on Wall Street (http://search.breitbart.com/q?s=) as investors have been beset by troubles in global credit markets stemming from a sharp rise (http://www.breitbart.com/detail.php?searchText=) in defaults on subprime mortgages (http://www.breitbart.com/detail.php?searchText=).

In a brief statement, the Fed acknowledged the turbulence and said the downside risks to the economy had "increased somewhat."

But the Fed continued to state that the predominant risk (http://www.breitbart.com/detail.php?searchText=) remained that inflation "will fail to moderate as expected."

Many analysts believe the Fed will remain on hold through the rest of this year, preferring to watch and make sure that inflation moderates back to an acceptable level.

Tuesday marked the ninth consecutive meeting where the Fed has left its key policy lever unchanged. The last rate move was a quarter-point increase, the 17th in a row, on June 29, 2006. That capped a two-year campaign that pushed the funds rate from a 46-year low of 1 percent to its current level in a bid to slow the economy enough to keep inflation under control.

The decision to leave rates unchanged means that banks' prime lending rate, the benchmark for millions of consumer and business loans, will remain where it has been for the past year at 8.25 percent.

http://www.breitbart.com/article.php?id=D8QSBGQG1&show_article=1
___________________________________

Harli

08-07-2007, 03:30 PM

So what does this mean for the average person wanting to buy a home in the next month or so and has no working knowlege of the system (yes me)?

I freely admit to being ignorant, mostly because our first home fell into our laps and we didnt have to pay a penny for it, but i want to move in with my mom since my dad died.

Gan

08-07-2007, 03:41 PM

1. Make sure you have 20% down - puts you in better position to negotiate interest rates, fees, etc.

2. Means interest rates on A loans (loans for people with good credit scores) will remain unchanged.

3. Make sure you have good credit (preferably 680 or higher) so you dont have go get a sub-prime loan which arent as readily available as they used to be.

4. Apply for a loan from a major lender, skipping a broker at this point with their possible insolvency (if they're a sub-prime broker) will save you lots of extraneous fees and ensure that you have funds to close from a reputable source.

Jazuela

08-07-2007, 05:16 PM

I'd play it even more conservatively than Gan, and suggest this:

1) Make sure you have AT LEAST 20% for a downpayment. The more you put down, the less you have to pay interest on, and the more likely you are to get approved at a low fixed rate.

2) Go for the lowest fixed rate you can find; don't try for an adjustable rate, and absolutely positively do -not- go for any kind of loan that results in a balloon payment later on.

3) Consider buying a foreclosure; you're likely to get a better deal for a house, and often the houses are in pretty decent condition (depending on the neighborhood).

Gan

08-07-2007, 05:18 PM

Stay away from anything adjustable.

Fixed is the way to go unless you're paying cash for an investment piece.

Harli

08-08-2007, 02:34 AM

Stay away from anything adjustable.

Fixed is the way to go unless you're paying cash for an investment piece.

Yea, i researched the adjustable rate (thank you captial one) and we have really good credit (almost 690) and we have 48k to put down. My parents house sold at 250k and that was a 4 bedroom 4 bath, two stories with lots of footage. Since its just going to be me, the kid, the man and the mom, i figure 3 beds/2 bath should work. In the area i was looking a nice house with good lot space and updated kitchens and baths should run us about 190k-230k and i think we can pull it off, thank you all for the wonderful information.

Seran

08-08-2007, 02:45 AM

If you've been to any foreclosure sale, you'd know that houses don't go for 'pennies on the dollar'. Realistically you can expect to save 25-30% depending on the age of the home. There are so many investors, real estate companies, and banks who attend foreclosure sales with cashiers checks in hand in order to get such a deal.

Drew2

08-08-2007, 03:59 AM

Sean of the Thread

08-08-2007, 04:04 AM

rofl

On a related note I'm so glad we've waited to buy again.

Harli

08-08-2007, 04:09 AM

rofl

On a related note I'm so glad we've waited to buy again.

oh oh oh thats another question, should we wait a year to buy or should we just go for it? I'm sorry in advance for being a pest, but like i said i know nothing about this and when i try to read up on it, i swear its written in latin.

Gan

08-08-2007, 06:53 AM

If you meet what Jaz and I talked about then I would say its a good time to buy.

A paper loans are still closing at a good rate here in my area. I say go for it.

Gan

08-08-2007, 07:20 AM

Keller

08-08-2007, 09:47 AM

Trouble

08-08-2007, 10:17 AM

I have to agree with Seran here, when I hear the phrase "pennies on the dollar" I think 85 or more percent discount.

Gan

08-08-2007, 10:34 AM

ROFL at trying to assign an arbitrary amount to an anecdotal phrase. Its a matter of perception; however, regardless of specifics, the message I was intending to deliver was received with regards to getting deals in the foreclosure market.

Basically, Seran couldnt find anything to nitpick in the posts where I was specific (because he usually doesnt know what the fuck he's talking about), so he chose to nitpick the phrase "pennies on the dollar".

:lol:

Comedy gold.

Jazuela

08-08-2007, 12:23 PM

Some foreclosures go for even -more- than what they'd normally get if put on the market without foreclosure. It really boils down to the demand of the market itself. You'd be surprised at how much people will pay for total utter crap property - and how little they'd be willing to offer for excellent quality.

We had someone offer to buy ours when the area was at its peak last year. I think it was something ridiculous like $287,000

For a half acre of wooded land rife with moles and piss-poor soil and a couple of dead, termite-infested trees in the back yard that we're planning on taking down eventually. The house is tiny - barely 1200 sq ft, if that. One bathroom (unfinished) three bedrooms (one unfinished) the master bedroom is a whopping 10x11...

Like I said - foolishness, what we were offered. But we like the area and haven't been living here that long, and plan on staying several more years, so we turned the offer down.

Across the street, they had to reduce the price of theirs - after they had completely renovated and updated the house and garage, added another room to the back - I think they got $220,000 for it, for more living space but no basement, two full bathrooms, a master suite, a second floor (it's a modified cape), a fucking skylight in the hallway, heh...

It just depends on how much, or how little, people are willing to pay.

Clove

08-08-2007, 12:38 PM

Gan

08-08-2007, 12:41 PM

Aug. 8 (Bloomberg) -- Mortgage applications in the U.S. rose last week by the most since January, as cheaper borrowing costs encouraged more Americans to seek loans for home purchases and refinancing.

The Mortgage Bankers Association's index of applications to buy a home or refinance a loan jumped 8.1 percent to 656.5 from 607.1 the prior week. A gauge of demand for credit for home purchases rose 7.4 percent, and the average rate on a 30-year fixed mortgage fell for the fourth consecutive week, the group said today.

A resilient labor market and lower home prices may support sales and eventually help reduce the glut of unsold properties, economists said. A report last week showed Americans signed more contracts to buy previously owned homes in June, a sign the weakness in the housing market may not get much worse.

``We're at the bottom right now in housing,'' said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, North Carolina. ``The biggest declines are over.''

A separate report from the Commerce Department today showed that sales at U.S. wholesalers rose faster than inventories in June, making it likely companies will continue to rebuild stocks. Wholesaler stockpiles increased 0.5 percent, more than anticipated by economists.
Declining Rates

The mortgage rate for 30-year fixed loans fell to the lowest since early June, while rates also dropped for 15-year fixed and one-year adjustable loans.

The average rate on a 30-year fixed mortgage fell to 6.41 percent last week, from 6.50 percent the prior week, the report showed. At last week's rate, monthly borrowing costs for each $100,000 of a loan would have been about $626, or $3 less than a year earlier.

more...

http://www.bloomberg.com/apps/news?pid=20601103&sid=amcA4v4SfFSI&refer=news

Gan

08-08-2007, 02:47 PM

http://ml-implode.com/

An interesting site if you want to keep up to date with what lending institutions have 'imploded' and which ones appear 'ailing'.

Jessaril

08-08-2007, 03:26 PM

Having the 20% down also eliminates the need to pay PMI -- it's not that much but it adds up.

I'm looking at properties now in texas, new properties, that are selling for 80-90 cents on the dollar simply because there are no buyers.

One thing alot of people don't realize about your debt to income ratio is that credit cards (especially those with high credit limits) are considered unsecured loans. Obviously you should avoid carrying a balance on credit cards if you can, but even having the credit available can effect your chances to get approved for the best interest rates.

Keller

08-08-2007, 03:33 PM

I'm looking at properties now in texas, new properties, that are selling for 80-90 cents on the dollar simply because there are no buyers.

Do you realize how fucking hot it is in Texas?

If they don't do something about all the cattle down there, it's only going to get hotter. Are you sure that's a wise investment? I'd look into properties in Nova Scotia.

Jessaril

08-08-2007, 03:37 PM

Gan

08-08-2007, 03:39 PM

Do you realize how fucking hot it is in Texas?

If they don't do something about all the cattle down there, it's only going to get hotter. Are you sure that's a wise investment? I'd look into properties in Nova Scotia.

LOL
We have our own version of Aurora Borealis. At night you shoot a flare across a stockyard and watch the cows light up. ;)

Yes it is hot, but you would be suprised at how prevalent Air Conditioning is down here.

Gan

08-08-2007, 03:41 PM

I was born and raised in Minnesota, believe me, I know how hot it is here. Jobs and all that business though. Not paying state income tax is pretty nice too, but, that's about all this state has going for it.

:(

There's much more to Texas than cheap land and no state income taxes. I think its one most people friendly place to be in the US. You just dont find many places where folks are just plain considerate or nicer.

If you look for land in the Houston area let me know, I can give you plenty of resources to find it with.

Keller

08-08-2007, 03:43 PM

LOL
We have our own version of Aurora Borealis. At night you shoot a flare across a stockyard and watch the cows light up. ;)

Yes it is hot, but you would be suprised at how prevalent Air Conditioning is down here.

I wouldn't be surprised if, overall, it's cheaper to live in LA than Houston because I never turn my AC or heat on.

If I end up moving to DC permanately, the weather will be the only thing I miss about LA.

Gan

08-08-2007, 03:45 PM

Having the 20% down also eliminates the need to pay PMI -- it's not that much but it adds up.
Indeed it does add up. There are several ways to get rid of it, but it either takes time, more money (prepaid to principal), or appreciating property values and a re-appraisal.

One thing alot of people don't realize about your debt to income ratio is that credit cards (especially those with high credit limits) are considered unsecured loans. Obviously you should avoid carrying a balance on credit cards if you can, but even having the credit available can effect your chances to get approved for the best interest rates.
Having open trade lines is important, but having balances over 45% of available credit was usually a red flag and dropped your rating. Most lenders want your Debt to Income Ratio to be less than 46%, and now I hear thats even dropping. And 46% wont get you an A paper loan...

Gan

08-08-2007, 03:48 PM

I wouldn't be surprised if, overall, it's cheaper to live in LA than Houston because I never turn my AC or heat on.

If I end up moving to DC permanately, the weather will be the only thing I miss about LA.

No matter if I keep my AC turned down to 60 degrees, it will never equal paying close to a million dollars for a 1500 sq. ft. flat on a postage stamp lot. Especially when you can buy it around Houston for a tenth of that. ;)

Average price per square foot in most areas around Houston is $70.00 per square foot. That jumps if you get into the medical center area, memorial, and other select areas where home values have traditionally remained higher. (This doesnt count River Oaks)

Harli

08-08-2007, 06:32 PM

Indeed it does add up. There are several ways to get rid of it, but it either takes time, more money (prepaid to principal), or appreciating property values and a re-appraisal.

Having open trade lines is important, but having balances over 45% of available credit was usually a red flag and dropped your rating. Most lenders want your Debt to Income Ratio to be less than 46%, and now I hear thats even dropping. And 46% wont get you an A paper loan...

We paid off all the credit cards so hopefully that helps, from what i can gather (thanks to you guys) we should be in good shape. :thanx:

Jessaril

08-08-2007, 07:25 PM

We paid off all the credit cards so hopefully that helps, from what i can gather (thanks to you guys) we should be in good shape. :thanx:

Another thing, and this is outside the mortgage realm, but still.

You may not know this, as alot of people don't, but you can get a buyers agent to help you buy a house.

They're basically a realtor that does not list ANY properties -- if they do they aren't a real buyers agent even if they call themselves one.

Basically in most transactions you deal with a realtor that has the sellers interest in mind, if you get a buyers agent, you never deal with the sellers realtor. Your agent shows you the homes, handles negotiations and helps you with the paper work.

The best part is, it costs you nothing (directly). They split the commission with the sellers agent so instead of one realtor getting 6% (give or take) you split it between two realtors. It costs you nothing more then it would, and you get someone to represent your interests.

Harli

08-08-2007, 07:29 PM

Another thing, and this is outside the mortgage realm, but still.

You may not know this, as alot of people don't, but you can get a buyers agent to help you buy a house.

They're basically a realtor that does not list ANY properties -- if they do they aren't a real buyers agent even if they call themselves one.

Basically in most transactions you deal with a realtor that has the sellers interest in mind, if you get a buyers agent, you never deal with the sellers realtor. Your agent shows you the homes, handles negotiations and helps you with the paper work.

The best part is, it costs you nothing (directly). They split the commission with the sellers agent so instead of one realtor getting 6% (give or take) you split it between two realtors. It costs you nothing more then it would, and you get someone to represent your interests.

Thanks i didnt know about that. It would be nice to have someone to help.

Sean of the Thread

08-08-2007, 07:33 PM

<----July power bill $370

:cry:

Jessaril

08-08-2007, 07:55 PM

<----July power bill $370

:cry:

Yep, mine averages 350-450 dollars during the summer as well. Really makes me wonder if I can deal with ugly solar panels just to save alittle bit.

Gan

08-08-2007, 08:32 PM

Jessaril

08-08-2007, 09:19 PM

In Texas the seller usually pays for both buyer's agent and seller's agent.

Thats pretty standard on any Earnest Money Contract from a broker. Of course, that is subject to negotiation as the contract is being written, but all the ones I see that cross my desk are seller paid.

Right, but it's rolled into the cost of the house, so you're paying it indirectly, I guess it's really taken out of the profit of the seller though.

Harli

08-08-2007, 11:47 PM

<----July power bill $370

:cry:

holy fucking shit, mines not even that bad in the winter.

Krendeli

08-09-2007, 07:25 AM

<----July power bill $370

:cry:

Wow. Even if my heat pump/central air runs 24/7, I know my max monthly electrict cost is about $190.

Gan

08-09-2007, 07:33 AM

Right, but it's rolled into the cost of the house, so you're paying it indirectly, I guess it's really taken out of the profit of the seller though.

Sometimes the seller anticipates that charge and ups the sale price; however, depending on the area and what his initial asking price is/was ther's only so much he can go before buyers will either a) fail to get a loan because the LTV is too high or b) decide the guy wants too much for the home and move on to another.

Where you see the cost deducted from is on page 2 at the top of the settlement statement where it comes out of the proceeds of the sale of the home. Its treated as a closing cost at the closing table.

It definatey is a balancing act. Thats why some folks decide to go FSBO, because they feel that paying 6% total of the sale price is too much for both listing and buying agents (3% respectively).

Ironically its usually the buyer's agent who's done the most work on a deal because they're the one who's been slugging the prospective buyer all over town trying to find a home. The listing agent just shows the home and as it listed in MLS/newspaper.

Gan

08-09-2007, 07:42 AM

Wow. Even if my heat pump/central air runs 24/7, I know my max monthly electrict cost is about $190.

Sounds like you're running about 1500 square feet (or a litle less).

Apartment or condo?

If you say you live in the Heights I'll laugh.

My condo was 1100 sq. ft. and the bill (back before the high fuel prices) was ~$210 a month.

My house is ~2000 square feet and my bill last summer got as high as $340. Last month with Reliant it was $260 (I updated with a more advanced model of programmable thermostat). Although, with all the rain we've been having, its sure kept the temperatures down this season.

Krendeli

08-09-2007, 08:50 AM

Sounds like you're running about 1500 square feet (or a litle less).

Apartment or condo?

If you say you live in the Heights I'll laugh.

My condo was 1100 sq. ft. and the bill (back before the high fuel prices) was ~$210 a month.

My house is ~2000 square feet and my bill last summer got as high as $340. Last month with Reliant it was $260 (I updated with a more advanced model of programmable thermostat). Although, with all the rain we've been having, its sure kept the temperatures down this season.

I live in PA. My house is about 2000 sq feet. My electric bill last month was about $70, and that's about average for the summer. Over the winter when I run the heat pump, my bill is about $125 to 150.

Gan

08-09-2007, 09:03 AM

I live in PA. My house is about 2000 sq feet. My electric bill last month was about $70, and that's about average for the summer. Over the winter when I run the heat pump, my bill is about $125 to 150.

My bad, I thought you were in Houston (thats Kembal I believe).

In the winter my gas heater runs about 90 bucks in LP and my electric bill is about 140 170. (need electricity to run the blower unit). But we have kind winters down here. Its August and September that are the killer heat months.

Clove

08-09-2007, 09:08 AM

My bad, I thought you were in Houston (thats Kembal I believe).

In the winter my gas heater runs about 90 bucks in LP and my electric bill is about 140 170. (need electricity to run the blower unit). But we have kind winters down here. Its August and September that are the killer heat months.

Be sure to put winter in quotes next time Texan. Our winter gas bill in New England for our 1200 sq foot Cape tops out at 185/mo. during the the coldest months. We have a very well insulated home with a brand new heating system too. Electricity stays pretty constant year round at approx. 100/mo.

Gan

08-09-2007, 09:14 AM

I thought I just did?

:puzzled:

HAHAH, nevermind I got it. <-- need more caffeene this morning.

Jessaril

08-09-2007, 10:04 AM

If you have Gas your utility bills, for the time being, will be significantly lower then those of us that heat and cool our homes using straight electricty. My parents utility bills in Minnesota were a quarter of mine in my first home and they have 3000 more sqft then I did.

Gan

08-09-2007, 10:33 AM

I have gas for water heater and central heat. We bought the home from an elderly couple who were on O2 so they replaced the old gas range/oven with electric range top and double oven.

Those are getting yanked out as soon as I start on the kitchen rebuild. Have to finish the bathrooms first though, and there's plenty of gas in there (at times).
:whistle:

Gan

08-14-2007, 02:28 PM

NEW YORK (CNNMoney.com) -- The binge that many housing markets went on in the early- to mid-2000s is over, and some of the hottest markets like California are now experiencing the worst hangovers.

But other areas, especially many that recorded slower home price growth earlier this decade, have seen little increase in foreclosure rates, according to the latest data released Tuesday from RealtyTrac, the online marketer of foreclosure properties.

"While foreclosure activity has skyrocketed over the past year in many cities, particularly in California, Ohio and the Northeast," James Saccaccio, RealtyTrac's chief executive, said in a statement, "foreclosure activity seems to be subsiding in parts of Texas, South Carolina and other states."

"Still," he said, "the overall trend is toward escalating foreclosure rates, with 82 of the top 100 metro areas reporting year-over-year increases in the number of homes affected by foreclosure."

Stockton (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL0675000.html), California now leads the nation in foreclosures. Of RealtyTrac's top 10 metro areas for foreclosures, four are in Central California.

Coastal California cities are doing relatively well, although foreclosures are up there too. San Francisco (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL0667000.html) had one foreclosure for every 263 households, a fairly low rate, but up 83 percent from the first six months of 2006.

Stockton city drew thousands of home buyers to the Central Valley area from the prohibitively expensive Bay-area markets during the housing boom and saw home prices nearly double in the four years ended December 31, 2005, according to the Office of Federal Housing Enterprise Oversight.

The most ruthless foreclosure states (http://money.cnn.com/2007/07/19/real_estate/foreclosure_by_the_state/index.htm?postversion=2007072313)
Because of California's outsized home prices, option and hybrid adjustable-rate mortgages (ARMs) interest-only loans became widespread. They enabled home buyers to get into properties they could not otherwise afford.

But often these loans were time bombs; hybrid ARMs, for example, reset to much higher rates - and payments - after the first two or three years of low fixed rates.

Many buyers were also approved for expensive mortgages based on applications in which income or assets went unproven, the so-called no- or low-doc loans, AKA "liar loans."

Lenders underwrote mortgages for these borrowers based on their income or asset claims without proof and many times the claims were exaggerated. When hard times hit, these borrowers had fewer resources to fall back on than the lenders anticipated and foreclosures followed.
Mortgage meltdown contagion (http://money.cnn.com/2007/08/10/real_estate/mortgage_meltdown_crushing_other_markets/index.htm?postversion=2007081311)

Seven of the nation's top 10 metro areas are in the Sun Belt. Only three are in economically hard-hit areas, historically the kinds of places that once produced the highest rates of foreclosure filings.

Stockton recorded one foreclosure filing for every 27 households during the six months ended June 30, a 256 percent increase compared with the first six months of 2006.

Number two in the nation was Detroit (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL2622000.html), where job losses in the auto industry drove foreclosures higher. One of every 29 households recorded a foreclosure filing there, almost double the rate of a year ago. Las Vegas (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL3240000.html) (one of 31, up 142 percent) was third.

The other California cities in the top 10 were Riverside (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL0662000.html)/San Bernardino (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL0665000.html) (one in 33, up 198 percent), Sacramento (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL0664000.html) (one in 36, up 231 percent) and Bakersfield (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL0603526.html) (one in 47, up 222 percent).

The lowest foreclosure rate recorded by RealtyTrac among the 100 metro areas surveyed was in Richmond, Virginia (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL5167000.html). It had just one for every 2,319 households, about the same as a year ago and a rate barely more than 1 percent of Stockton's.

Other low foreclosure metro areas included Greenville, South Carolina (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL4530850.html) (one in 1,721, down 66 percent), McAllen, Texas (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL4845384.html) (one in 1,494, down 35 percent) and Honolulu (http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL1517000.html) (one in 1,151, up 68 percent). http://i.cnn.net/money/images/bug.gif (http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=California+cities+fill+top+10+foreclosure+li st+-+Aug.+14%2C+2007&expire=-1&urlID=23458478&fb=Y&url=http%3A%2F%2Fmoney.cnn.com%2F2007%2F08%2F14%2F real_estate%2FCalifornia_cities_l#TOP)

http://money.cnn.com/2007/08/14/real_estate/California_cities_lead_foreclosure/index.htm?cnn=yes

Jessaril

08-14-2007, 04:16 PM

One of the few benefits to living in Texas is our ridiculously low housing costs. I just hope all the Cali folks that foreclosed on a house don't head this way and push up our housing like they did in Colorado =).

Gan

08-14-2007, 04:26 PM

I've already seen an increase in out of state purchases from the California area in my office. In fact, the last 4 2nd property homes I've closed have been from California.

I think California investors will find Texas a little tougher to borrow money and buy property with the real estate laws we have in Texas.

Other than that, I like to see California money come to Texas, especially when its a cash deal instead of involving a lender. Thats a plus plus situation.

Jessaril

08-14-2007, 04:48 PM

Sean of the Thread

08-16-2007, 10:02 AM

You either love or hate Cramer.

http://youtube.com/watch?v=rOVXh4xM-Ww

Gan

08-16-2007, 02:32 PM

Seems that Alt-A paper loans are now on the not available list (in addition to most all sub-prime loans).

If you have a good rate/term on your mortgage, sit on it for a while. Investors are still sorting out the casualties and wont start looking back into that market until things settle down.

Apotheosis

08-16-2007, 03:21 PM

yeah, market took a swift kick in the stones this week.

Gan

08-16-2007, 05:36 PM

NEW YORK (AP) -- Wall Street pulled off a dramatic late-session turnaround to close mixed Thursday after bargain hunters lured by weeks of massive declines came back to the stock market. The Dow Jones industrials, down more than 340 points in afternoon trading, ended the day with a loss of just 13.

http://biz.yahoo.com/ap/070816/wall_street.html?.v=6
__________________________________________________

I am so glad I'm not a broker. My nerves would be completely shot right now.

Keller

08-16-2007, 05:48 PM

I admit I wanted to take a short position this morning.

If I had an open brokerage account with any amount of money in it I would have.

Damn.

Warriorbird

08-16-2007, 10:29 PM

I did well. Arbitrage distracts from law school though. I got embarassed today in class.

Sean of the Thread

08-16-2007, 10:30 PM

You still work at a movie theater right?

Warriorbird

08-17-2007, 12:20 AM

I've started law school at LSU. It's actually against the law for me to have any sort of job during my first year of law school in Louisiana apparently. So now instead of scheduling high school students and dealing with the customers so insane they got past the staff I'm reading...a lot.

Sean of the Thread

08-17-2007, 12:45 AM

Whaaaa? Against the law to have a job?

Warriorbird

08-17-2007, 02:24 AM

Louisiana has...uhm, interesting laws. I saw that it was forbidden to have a job in the student honor code. I asked why, assuming that it was just due to the overwhelming amount of work first year law students have. Someone then said it was actually forbidden by law.

(I haven't been able to locate this in the civil code, however, but they seemed pretty serious about it.)

On topic from one of my professors...

"Nobody should lend to the subprime anyways. It is what killed Mitsubishi. All those Vin Diesel kids don't pay their car loans. A car with shark fins?"

Gan

08-17-2007, 08:14 AM

On topic from one of my professors...

"Nobody should lend to the subprime anyways. It is what killed Mitsubishi. All those Vin Diesel kids don't pay their car loans. A car with shark fins?"

Love the shark fin remark. :lol:

With regards to subprime. Actually I can understand the need for subprime, without it you see a lot more owner financed which can demonstrate some very creative financing and terms that tend to trend more towards predatory contracts. Lots of folks lost their homes after being late or missing only 1 payment because of a greedy landowner/contract holder having really preadory language written into the contract (contracts are no longer accepted for residential, it has to be a specific type of deed now in Texas).

Its in a lender's best interest (no matter what type of loan) to keep the borrower capable of paying on the note in order to generate interest revenue. And some people are just never in good enough shape to be an A paper loan, ever. Especially when the targets for this are based on multiple goals (>680 credit score, <46%Debt/Income, <80% LTV).

Keller

08-17-2007, 09:07 AM

I would look into that, WB.

We were "strictly forbidden" from having jobs our first year, but that was hogwash. The only restriction is by the ABA and that only limits you to 20 hrs per week. And even then, I'm not sure how they enforce that. I'm going to stay on with the firm I'm working at this summer and they've said I can work as many hours as I want (I will be paid hourly through the school year). So, if they don't limit it, and I don't tell anyone, who cares?

Gan

08-17-2007, 10:37 AM

Louisiana has...uhm, interesting laws. I saw that it was forbidden to have a job in the student honor code. I asked why, assuming that it was just due to the overwhelming amount of work first year law students have. Someone then said it was actually forbidden by law.

You're a future attorney, its your responsibility to challenge ideals and laws, research it and find out if such a law exists then either loophole it or challenge it directly.

Never accept the status quo.

Warriorbird

08-17-2007, 10:42 AM

"I would look into that, WB.

We were "strictly forbidden" from having jobs our first year, but that was hogwash. The only restriction is by the ABA and that only limits you to 20 hrs per week. And even then, I'm not sure how they enforce that. I'm going to stay on with the firm I'm working at this summer and they've said I can work as many hours as I want (I will be paid hourly through the school year). So, if they don't limit it, and I don't tell anyone, who cares?"

I've looked into it a little bit already. I've met some pretty neat local lawyers.