Mr Housing Bubble

[lazygood4nothinbum]

moemg. i have an excel speadsheeted calculator differentiating save our homes and superhomestead but i do not see how to attach to this reply nor to a private memo to you. if you like please private me with your email address and i will forward calculator to you.

i forget which county appraiser's office i swiped it from so might not be completely relevant to you but will give you good clarification of the difference between soh & superhomestead.

[lazygood4nothinbum]

Quote:

Originally Posted by AltaRed It "depends". Depends on how fast the prices appreciated to the top, how far they overshot 'affordability', what the local/regional economy is like, etc. Data shows that prices in Canada's 2 largest cities (Toronto and Vancouver) took over 10 years to recover from late '80s/early 90's bubbles. I suspect the impacts will be quite regionalized in the USA although the chart on CNN Money today (28th) on percentage of subprime mortgages state by state are surprisingly spread out across the nation.

thanx, but i was really hoping someone would look into their crystal ball and tell me whether to sell the inherited house or try to hold on for a few years. the regional thing is so difficult especially here in florida. it seemed before the bubble became apparent that florida population was exploding and so i had thought that was the reason for our price increases. but then the bubble, and then our taxes, and then our insurance rates. the inherited property is absolutely prime (walk to beach & dock your boat), and in the past i would have considered it a solid investment but now i just don't know. and based on how much it has dropped (easily 30%) i am no longer convinced that it is so good to wait for things to improve.

[twaddle]

I wouldn't bet on a recovery within a year or two. Housing busts are tightly correlated with recessions. Normally, the recession causes the housing bust. But in this case, the bust may be large enough and widespread enough to cause a recession. If it does, don't expect housing to recover until the economy recovers.

[Brat]

Because the terms of many subprime were onerous and they were bundled with conformable contracts no one knows the real value of those bundles, thus they are a problem to re-sell in the market and from what I hear investors are walking away from almost all real estate mortgage contracts. This is a fear driven market which may echo through the economy.

[twaddle]

Personally, I think the subprime-backed paper fiasco is overblown. It may blow up a few more hedge funds (I think one in London blew today), but shouldn't affect the economy. The thing to watch, IMO, is consumer spending and the reverse of the wealth effect.

[Moemg]

I have one other Question for Florida residents .If we chose save our houses or the superhomestead are you locked into that choice forever ??Say you move are you locked into the save our houses when at that point the superhomestead would be better ?

[brewer12345]

Quote:

Originally Posted by twaddle Personally, I think the subprime-backed paper fiasco is overblown. It may blow up a few more hedge funds (I think one in London blew today), but shouldn't affect the economy. The thing to watch, IMO, is consumer spending and the reverse of the wealth effect.

If it were confined to subprime, I would agree. But its not. Its tough and expensive to get any mortgage that doesn't fit in the conforming box. Car loan rates have gone up. Credit card terms have gotten tighter (so much for stoozing). Even commercial mortgages are tough to come by now.

[73ss454]

Quote:

Originally Posted by Moemg The tax situation in Florida is so confusing .I am homesteaded and bought before the prices rose so my taxes are $5,000 on a $800,000 house .If I elect to stay with the save our homes benefit it's fine as long as I stay in this house .The problem is I'm thinking about selling and buying a less expensive house but my taxes would be the same unless I had the super exemption .So how are they going to handle issues like these . As Lazy says the save our homes portability would have passed but this is just too confusing .

I just homesteaded this year and my taxes are $7100 this year with an appraised value of $308K go figure.

[Moemg]

Quote:

Originally Posted by 73ss454 I just homesteaded this year and my taxes are $7100 this year with an appraised value of $308K go figure.

My taxes are $5,000 because my purchase price was $350,000 .I bought before the market went nuts and I also had a very very motivated seller.

[Brat]

Copied from RedFin today:

Hoping to Borrow More than $417,000? Good Luck!


In Seattle the median price for a single family home is $481,000 so unless you can put about 13% down you’ll need a jumbo loan (which is any loan over $417,000). Well the fallout from the sub-prime lending debacle is affecting some lender’s ability to provide jumbo loans even to well qualified buyers. Elizabeth Rhodes reported this weekend on a Seattle area couple who’s loan disappeared the night before closing on their new home because the mortgage broker had suddenly lost the ability to provide jumbos.

The evening before their home purchase was to close, ..... ......, learned their mortgage to buy a Woodinville home had evaporated.

Unlike subprime borrowers defaulting on loans, the couple had a stellar credit score, a 20 percent down payment, strong employment history and had effortlessly purchased three prior homes.

But their new home’s $670,000 sales price was large enough to require a “jumbo” loan, so named because it was for more than $417,000, the limit the nation’s largest mortgage backers will fund.

Their California mortgage broker had unexpectedly lost its ability to provide jumbos — an event being repeated by lenders nationwide as the underlying funding for these large loans grows scarcer.

If it’s going to be hard for people in Seattle to get jumbo loans, microeconomics will tell you that as demand decreases so will home prices.

[73ss454]

Quote:

Originally Posted by Moemg My taxes are $5,000 because my purchase price was $350,000 .I bought before the market went nuts and I also had a very very motivated seller.

Believe me I know the deal down here real well. This is one screwed up state tax wise.

[haha]

Quote:

Originally Posted by Brat Copied from RedFin today: Hoping to Borrow More than $417,000? Good Luck! In Seattle the median price for a single family home is $481,000 so unless you can put about 13% down you’ll need a jumbo loan (which is any loan over $417,000).

It's likely that this median price is heavily tilted toward the far suburbs. I doubt there is a house in the city anywhere close to this price, except in neighborhoods where you take your life in your hands getting out of your car.

It will be intersting to see if Microsoft is recession resisitant this time around. Layoffs there, even composed solely of contractor non-renewals would make a real dent in both housing sales demand and apartment demand.

Ha

[brewer12345]

Well, if you have good credit and a significant downpayment, you can now get a jumbo loan. But be prepared to pay 8% plus 2 points up front.

[Brat]

Eh... DD has her house on the market in the Bay Area. Buyers must have huge (by my standards) down payment to even begin an offer. For example, $650,000 + a $400,000 mortgage. Yipes!

[lazygood4nothinbum]

Quote:

Originally Posted by Moemg I have one other Question for Florida residents .If we chose save our houses or the superhomestead are you locked into that choice forever ??Say you move are you locked into the save our houses when at that point the superhomestead would be better ?

if you are going to downsize and can afford the "downsized" taxes on save our home as currently in effect, then you'd better do it before soh is voted out and superhomestead is voted in if that indeed will be the verdict.

after the vote, soh will only exist for those who purchased before the vote. after the vote there will be only superhomestead for new purchasers, even if you previously had soh on the house you sell. there is no portability built into the proposed amendment.

so you can keep your soh value or you can opt for super on your existing homestead. if you change homestead after the vote you will only have super and will lose completely your soh cap.

[73ss454]

Momeg, I've owned my house in Fla. for over 4 years but only homesteaded this year. In this case it would pay for me to take the super because SOH is no help to me because of the already inflated prices. But this is only if the people of Florida vote for this on Jan 29th of next year. If not, square one!

[lazygood4nothinbum]

every police & fire department as well as every school board is against it.

[73ss454]

Quote:

Originally Posted by lazygood4nothinbum every police & fire department as well as every school board is against it.

No doubt, it's just free money that they get to spend. If it passes they have less to blow on raises and other things.

[haha]

Paul Kedrosky: Robert Shiller: "Less Bearish" On Housing

Shiller says he is "Somewhat less bearish", but doesn't sound particularly convinced.

Ha

[laurence]

Quote:

Originally Posted by brewer12345 Well, if you have good credit and a significant downpayment, you can now get a jumbo loan. But be prepared to pay 8% plus 2 points up front.

Geeze, good to know. DW and I are toying with buying a new house next spring. Now I know that I'm not in the market for anything over $418,000 + the equity in my current home, which I hope is still north of 200k.