Poll:Let the housing market collapse

[haha]

I am so tired of the government mucking about in markets that are much better off left alone. Just as this article says, creating a credit creates a class of winners, and at least two classes of losers. Winners, current owners who might plan to sell fairly soon. Losers, anyone who might be planning to buy, and the taxpayer as well as the stability of the entire housing market.

I am also getting quite tired of that little dweeb Bill Gross calling for a bailout of him and his billionaire buddies. Eff him


Ha

 

[bob boag]

No pain.

Bought (in Torrance CA) for 370 in 1999.
Peaked at 810 in 2006.
Bottomed at 630 in 2009.
Now back up to 660.

No plans to leave for 10+ years
Gotta love LA county; an $800K 1500 sq ft house

 

[chinaco]

We bought our current home in 2000.

If home values dropped 30%, we would have paid more than the home would be worth... yes that would hurt.

However, our area of the country did not experience a huge run up in home prices... therefore values have not adjusted down that much.

Of course, to sell you need a buyer. If we needed to sell in a hurry, we would likely need to cut the price to sell... but not 30%.


The big problem with housing is the 9.6% unemployment rate and the 18.3% underemployment rate. And this is what is tracked by the government... the real unemployment number are greater if we include people who have given up on finding a job.

Plus, many people who are working are waiting till the economy firms. Talks of a double-dip will hurt home sales.

 

[jayc]

I am so tired of the government mucking about in markets that are much better off left alone. Just as this article says, creating a credit creates a class of winners, and at least two classes of losers. Winners, current owners who might plan to sell fairly soon. Losers, anyone who might be planning to buy, and the taxpayer as well as the stability of the entire housing market.

I am also getting quite tired of that little dweeb Bill Gross calling for a bailout of him and his billionaire buddies. Eff him


Ha

+1. Don't get me started on policy. Housing value: After it is built with new windows, appliances, doors, carpet, roof, furnace, etc. Why should it go up in value when all of these things are wearing out. We just think it should go up from listening to the talking heads in the media.

 

[Walt34]

A 30% further drop would certainly make me notice, but then I suppose it would be lessened by the relative 30% drop in other places as well. While I certainly hope the home would retain or increase it's value we didn't buy it for an investment. We bought it for a place to live.

We contracted for it in 2001 and moved in a little over a year later. At this point it seems at break-even or perhaps a bit less so we haven't been stung as bad as many others.

But the government's price-fixing efforts don't seem to have accomplished much.

 

[chinaco]

+1. Don't get me started on policy. Housing value: After it is built with new windows, appliances, doors, carpet, roof, furnace, etc. Why should it go up in value when all of these things are wearing out. We just think it should go up from listening to the talking heads in the media.

Inflation at least.

Possibly location, location location, or desired features of the property.(i.e., supply demand)...

Otherwise... why wouldn't everyone buy new?

 

[JOHNNIE36]

Johnnie36:

This is your own personal buying and selling history plus your plans to sell (or not sell) RE you own. Doesn't the overall condition of the RE market impact all of us regardless of our plans to buy, sell or hold?

Purron, I thought the poll was asking if I would be hurt by a significant collapse in the housing market. I answered no in the poll. I was showing how I made out during the housing market run up, how it led to buying for cash and that I don't care what happens to the market now. If I ever intended to sell in the future I would be concerned, but not anymore. I know the housing market affects the economy as a whole, but don't think it will be hurting me. How will it hurt me by "holding" forever?

 

[JOHNNIE36]

Johnnie36:

This is your own personal buying and selling history plus your plans to sell (or not sell) RE you own. Doesn't the overall condition of the RE market impact all of us regardless of our plans to buy, sell or hold?

Purron, just looking back at the poll percentages, 42% of those polled don't think another housing market collapse will hurt them.

 

[Purron]

Purron, I thought the poll was asking if I would be hurt by a significant collapse in the housing market. I answered no in the poll. I was showing how I made out during the housing market run up, how it led to buying for cash and that I don't care what happens to the market now. If I ever intended to sell in the future I would be concerned, but not anymore. I know the housing market affects the economy as a whole, but don't think it will be hurting me. How will it hurt me by "holding" forever?

Johnnie36:

Looking at this again, I think you're right. We all know the housing market impacts everyone in varying degrees. This poll is specific to the individual household. Amazing how that first cup of coffee in the morning clears up things that were unclear the night before.

Thanks.

 

[jayc]

Inflation at least.

Possibly location, location location, or desired features of the property.(i.e., supply demand)...

Otherwise... why wouldn't everyone buy new?

Location = Land. This is different from the structure. That is why it is separate on your RE taxes.

Inflation only counts when you have to pay for the worn out stuff. Most things are actually cheaper in todays dollars/wages. I only need to work 10 hours now for a new dishwasher vs 18 hours 15 years ago. Building labor is the cheapest in 30 years.

They probably should buy new in the current environment. Over supply equals a big discount.

IMO the structure is no different than a used car. The sum of all new parts plus labor is always greater than original new. This plus inflation (on new cars) should make my 1995 honda increase in price with all new parts? The car provides transportation, the house provides shelter. The rest is hype, emotion, and status which always costs more.

 

[samclem]

They probably should buy new in the current environment. Over supply equals a big discount.

To me, the question about housing today is: Why would anyone build a new house? Unless you've got a unique situation (limited mobility requirements, a piece of land with utilities that you already own, etc), the large existing stock of built homes offers a lot of selection and great prices. Folks who build new are usually surprised at the costs of all the add-ons needed to make a structure into a home (especially landscaping). Yes, lumber and construction labor are available at reduced rates now, but lots of the more expensive stuff is as costly as ever.

 

[Sea Kayaker]

No pain.

Bought (in Torrance CA) for 370 in 1999.
Peaked at 810 in 2006.
Bottomed at 630 in 2009.
Now back up to 660.

No plans to leave for 10+ years
Gotta love LA county; an $800K 1500 sq ft house

I can do ya one better... give this site a gander to see the most insane real estate market in North America... yes my hometown of Vancouver.

http://www.crackshackormansion.com/

 

[HFWR]

No bubble in prices in my neighborhood, or DFW in general. The bubble is in supply, in both residential and commercial real estate.

Bought in 2000 for $113,000.
Current alleged value is about $145,000-ish.
Owe $85,000...

Most new homes are over $100sf (some WAY more); at that rate, my house is "worth" about $165,000.

SOLD!

 

[Independent]

Would you be harmed significantly by a collapse in the housing market? For this poll, a collapse would be a 30% drop in the value of your home. If you don't own a home, you can answer no.

Maybe you can clarify the question

1) Would we be hurt directly? No. We've got a paid for house. It's a place to live, not an investment. The market value is only relevant if we move, and in that case the 30% drop would apply to both the house we're selling and the one we'd be buying.

2) Would we be hurt indirectly? Yes. I've got a daughter who's already underwater, a further drop would sharpen her current dilemma of whether to do the economically smart thing and walk away or the "morally correct" thing and pay her debt. She is also trapped in that she can't move for a better job because she can't sell. Both of these would be multiplied by millions of borrowers in the total economy.

 

[rescueme]

To me, the question about housing today is: Why would anyone build a new house?

Because they are getting what they want rather than somebody else’s wants/need from the past? BTW, that's why we built our current home, after owning three "used" homes in the past.

Heck, we built our (retirement) home many years ago (and it's been paid off for many years). We don't worry about R.E. values, since this is our "terminal home".

However, we do share a property line with a development that started building about five years ago. At that time, the homes were in the $500-750k range (we're about 90 miles west of NYC). Our home is around 50% of the value of those homes.

Three years ago, construction stopped, and some spec homes were left "on the shelf". Of those, all have been sold within the last year (one is left), while new starts within the last 6-9 months have been off the charts.

It seems the builder is cutting back on spec homes, and I would say 75% of the homes being built are "owner built".

Since these are not on the "for sale" list, I won't know their perceived value till the local RE tax rolls are updated, but I have a feeling that most equal (and some more so) than the prior inventory.

In our area, the major "employer" is tied to health care, and I do know a few folks in this area are doctors (some, two in the family) and since medical is expected to do well in the future (due to old codgers - like me) they feel confident in building.

Oh well - their homes make my "shack" worth more if we pass in the immediate future.

In answer to your post, we looked to modifying our existing home to our "lifestyle requirements" at the time (this was in 1994). We had the option to modify/upgrade our existing home with our defined requirements. When it was all done, the cost to modify our home vs. building new was an easy decision; build new. Over the last sixteen years, comparison on utilities (due to maximum heating/cooling systems, insulation, air infiltration products, etc.) made our new home both more comfortable, but also less expensive to live in, over the long term.

Building (based upon your situation and current housing) can make sense, both in an emotional and financial sense.

Our first three homes were designed/built/purchased by others, based upon their needs. Our current home was built based upon ours…

 

[haha]

People often invest a lot of themselves in their homes, and this customization and dreamhome-ness winds up costing a lot of money and time. I think I understand this, but I personally do not feel any of these things. The day I start dreaming about homes is the day I will feel that I have forgotten how to dream. I think this "no-way" attitude is more common among men, and especially single men. By the time my Dad was 50 or so, what he really dreamed of was living in a hotel, and eating most of his meals at one of the old fasioned cafeterias or businessmen's tavern/restaurant to be found in those days in any big city downtown, with an occasional walk to a quality linen tablecloth restaurant. When he wasn't working he would have a beer and some sausage, visit amigos around town, and observe the flow of life.


Often a home becomes an ongoing project too, such that modificationas and upgrades are desired over time, not because anything has worn out or has become nonfunctional, but because a change or dressup of "tired" appearance is wanted.

A friend lives in a nice large townhome in a golf community. His wife is after him to build an addtional room so she can have a larger laundry room. I told him he could get her laundry picked up and delivered twice a week for the rest of her life much cheaper than spending the money and undergoing the disruption to get a larger laundry room. What kind of desire is that anyway, a larger laundry room? Have we sunk so low that we aspire to devote ever more resources to doing mundane tasks that in times past few middle class persons would have done for themselves?

He would prefer living in a city highrise, and outsourcing a lot more than laundry, as his happiest years were single living in a highrise in Manhatten. But I imagine there are more than one or two of you older gents who would prefer living differently from how you now live, but unfortunately you have 1 vote, and your wife has 2, and you feel that she can get along without you more easily than you could manage without her. QED

Ha

 

[LOL!]

Maybe that was just her way of asking for a "woman cave"?

 

[haha]

Maybe that was just her way of asking for a "woman cave"?

Quite possibly, I didn't even think of that. So having her laundry picked up would not have met her perceived need. Still, their house is large, I think that she could perhaps zone some other room for her use fairly easily.

Her husband is kind of a bulldozer, so I suppose that one could get a little tired of too much exposure. Among most of my married retired friends the guy and the woman have tended to keep up their work-world friendships, so they have a lot of time apart from one another. What I see as the typical ER.org married and retired relationship of a great deal of very harmonious togetherness I haven't yet seen much of in the non-virtual world.

I see that this is an issue way more complex than than houses and chores, thanks LOL for pointing this out.

Ha

 

[bbbamI]

We bought our current home in 1994; the purchase price was $97k. Since Megacorp moved us to [-]hell[/-] Texas, they gave us $10k plus other relo monies (tax free) so we put that money down on the house. Ending purchase price for yours truly...$87k....have been mortgage free for four years.

The county has assessed our home at $143k. Would a 30% drop hurt us....no I don't think so. Might lower our taxes a bit, but I imagine they would make up for it somewhere.

Besides I have no plans to move anytime soon...

Most new homes are over $100sf (some WAY more); at that rate, my house is "worth" about $165,000.

Yep...that's why our insurance company provides us with $180k on our dwelling.

Anyone got a match?

 

[kyounge1956]

I would be more curious to get a poll on that issue (% of house value drop), as I am not as confident that this is the case. (But KUDOS to you that you have not been adversely affected.) I know there are regional hot spots where housing is still good, but many places I have looked into are having "fire" sales in their RE Market. (snip)

Your wish is my command

 

[kyounge1956]

(snip) I think that many current owners would not be hurt by a collapse in the housing market. Only owners who bought in the last 5 years or so would be hurt. Many folks have owned their homes longer and have not used their homes as piggy banks. (snip) For this poll, a collapse would be a 30% drop in the value of your home. (snip)

Yes another 30%. I'm guessing that "most of us" have not experienced a 30% drop already in the value of our homes. (snip)

This current owner certainly would. My house has dropped in value by over 35% in the last four years—see my poll. I was counting on having enough equity in this house at retirement to replace it in my new location and have six figures left over in cash to add to my nest egg. The amount it has dropped already has completely wiped out the "left over" cash, and if this house drops any more I don't know if I will even have enough from its sale to pay for its replacement. Where I'm planning to move to after retirement has been economically depressed for a long time, so maybe they have been hit even harder than here in Seattle (not that I'd wish that on them). OTOH, they may never have had a bubble there, so there may not be as much potential for decline in prices. And an area contracting firm has just gotten the contract to make some of the pontoons for the new Lake Washington bridge, which will increase employment prospects there and perhaps bolster housing prices in that county.

You don't have to have bought in the last five years, or to have taken out equity every chance you had, to be hurt by this downturn. I bought my current home in 1997, and my first house in 1985. There has been one cash-out refi on each house—on my first house to remodel the kitchen (and I probably got back every penny of that, plus some) and on this house to replace my (27-year-old) car.

I don't think I've been an irresponsible borrower. Even with the big drop since 2006, this house is still worth almost three times the mortgage. But an additional thirty percent drop could potentially derail my retirement plans, because my budget doesn't include any money for rent or a mortgage payment, only taxes, insurance and upkeep. I have to own a house free and clear to make ER work for me. If I can't walk away from this house with enough money to replace it, I can't retire.

 

[W2R]

What I see as the typical ER.org married and retired relationship of a great deal of very harmonious togetherness I haven't yet seen much of in the non-virtual world.

Interesting observation! I don't know many retired married couples but the few that I do know are not like that either.

 

[W2R]

Yep...that's why our insurance company provides us with $180k on our dwelling.

Anyone got a match?

I think my insurance is to about $180K as well. Anybody willing to give me that much for my house right now can have it, and I'll pay their closing costs and have the whole house re-carpeted.

(hint: I'm not holding my breath)

 

[WhoDaresWins]

I voted Don't Know, Don't Care. I know the value would be down from my 2004 purchase price...guesstimate of 20 percent. No plans to sell in the forseeable future. I had to have a roof over my head until retirement, and this place is nice and 10 minutes from the office, 5 minutes to shopping and almost anything I could possibly want. I don't have a mortgage. My feelings lean toward letting market conditions decide where the chips will fall. I find the unemployment figures (and underemployment) a more troubling indicator of economic health.

 

[Moemg]

What I see as the typical ER.org married and retired relationship of a great deal of very harmonious togetherness I haven't yet seen much of in the non-virtual world.

.
/QUOTE]

You are hanging out with the wrong crowd . I have a group of either married or live in friends and all really enjoy each other and are harmonious . I do have to admit that none of them is in their first marriage so maybe that's why ?