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  #1  
Old 04-15-2006, 09:13 AM
elva
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Post House bubble in 2006?

Can someone explain to me why ANYONE is out shopping for houses today in America?

Yields on 10-year US Treasuries have risen above 5pc for the first time since 2002 on heavy selling by big institutions, sending tremors through the US mortgage and corporate credit markets.

Michael Taylor, senior economist at Lombard Street Research, said this year's sudden rise in 10-year yields risked tipping the US economy into a downturn.

"This could be the catalyst for a sharp correction in property prices and wean consumers off their credit binge," he said.
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  #2  
Old 04-15-2006, 09:18 AM
babble
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Post Re:

I have no idea why anyone would consider buying right now, but there are some. I recently sold my place in Malibu to a realtor. Another lady I know is in escrow to buy a place in the Valley for $850k. She is single and is going to do an I/O loan so that she can (sort of) afford the payments. After a very slow start to the year, I am now noticing more and more sold signs throughout the beach communities and the valley. I'm in the camp that things are going to get very ugly.
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  #3  
Old 04-15-2006, 09:22 AM
nitiya
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Hah!! Here's a crazy couple buying a house - but, it's outrageously cheap (96K), it's on more land than reasonable, it's close to the city, and we are getting a 30yr fixed loan - despite 'advice' from everyone around us to get a bigger,newer house in a flashier neighborhood and an ARM.
We are buying now because I think that the rates will do NOTHING but keep going up, and I want to lock in the lowest rate I can NOW.
We don't PLAN on moving anytime soon, so hopefully we will be able to ride out the flip in property values, and come out the other side of the bubble with our shirts on
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  #4  
Old 04-15-2006, 09:24 AM
dcare
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I'm in the market to buy. I just don't want to get screwed by an ARM that I can't afford. I'm planning on getting a 30yr fixed mortgage but the problem is my wife and I have a combined income of merely 95k per year. That gives us purchasing power around only 270k - which is about $100 grand short of what we need to purchase a decent starter home around here (Williamsburg VA).

In the future home prices will fall which will force the banks to demand 20% down. There will be no sellers and no buyers = no market! If I don't buy today, I will be priced out for YEARS to come. If I DO buy today, I will pay top dollar for a depreciating asset. If I continue to rent, I move that much closer to retirement with no equity. It seems you just can't win anymore.
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  #5  
Old 04-15-2006, 09:29 AM
bman
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Personaly I think the whole credit score and however they evaluate your credit is a scam and a useless tool. If a homeless guy can get $250,000 large, and someone who always pays on time can't get a dell account for $600 this country is truly fucked."

Its like they want you do go into irresponsible debt. My wife and I both have excellant credit, no strikes according to the big three credit reporting agencies and yet we are in the same boat. Constantly turned down for accounts so that we usually just pay cash, or credit card(have plenty of those,)which we pay off in full every month to spite the bastards. Credit evaluation is indeed a total scam. We have NEVER been late on a payment or defaulted on any financial obligation, and yet are deemed uncreditworthy by the money gods.

And my idiot new neighbor just bought an unbelievably overpriced shithole down the street ,and hasen't sold he first house yet ,in Detroit of all hellholes. He got an I/O,neg ARM loan with no problem he braggs.

Housing only goes up,right.
This country is totally,totally,totally fucked!
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  #6  
Old 04-15-2006, 09:31 AM
wayne
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As I wrote in another post the problems with credit are that people payment shop instead of shop with the total price tag in mind.

After being in debt I think there should be NO credit. We should have to pay cash for EVERYTHING. That would solve a lot of problems including the oil demand problem (Chevy Cobalt would be best seller instead of Tahoe), house problem (Trailers would be popular again as would 1000 sq ft houses instead of McMansions) and retirement would be fixed (no more Social security since people actually have their own money).
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  #7  
Old 04-15-2006, 09:34 AM
noise
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It is just nice to know that there are other people out there without blinders on. Two years ago there was very little on the internet about the real estate bubble and I was starting to feel like there was something wrong with me for being so pessimistic about the housing market."

It reminds me of the movie The Matrix where in the beginning Nero feels like something isn't right but he can't put his finger on it.

Also, later in the movie the discussions about people's complacency in the matrix and they will do whatever it takes to protect it. You can't tell them otherwise.

I feel like that too, 6 months ago it was a lot worse but slowley I think people's perceptions are changing, but man, it takes a long time. This should have been the biggest no brainer.

I think I will rent
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  #8  
Old 04-15-2006, 09:38 AM
goggau
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There can be a rationale to buy for the right price, in a few good markets.

In my zip code, the city is building a light rail system. Now, I see letters to the editor all the time from people in other parts of the city calling it an expensive boondoggle, and that money should be spend elsewhere for road improvements.

Buuuttt... it's helping my area, and I do see homes continuing to be sold. The lower priced ones are picked off, new listings appear above those prices, they get bought, etc.

This called a...? Ding ding! Rising market. :-) And with gas prices shooting to $3 soon I don't see this pattern will change anytime soon.
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  #9  
Old 08-22-2006, 09:28 AM
r8rpwr
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Quote:
As I wrote in another post the problems with credit are that people payment shop instead of shop with the total price tag in mind.


I agree with this. The last time I bought a car, they kept asking me what I wanted my payments to be. Totally irrelevant! (well, mostly irrelevant - it's true that there's a ceiling on what I can pay monthly, but that is not my concern so much as the final price is).

As for houses, we're biding our time for now. We finished a big rehab last year that took much longer than we expected, and with full time jobs there's only so much time for other things. We're getting our ducks in a row so that when prices inevitably start falling, we'll be in good shape to buy.
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  #10  
Old 08-22-2006, 03:51 PM
sub-zero
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First off, anyone who buys in CA is about crazy, anyway. Houses out there are simply too expensive. And *if* this bubble ever goes, it wil go there first.

But.....

To answer the question...I am buying now because once this suppossed bubble does pop (if it ever does) people will be selling houses like crazy and wanting to rent somewhere. A few years back when all the rates were low, people were re-fying these houses on 0% down ARM loans, which are about to come to term, and when they do, they will either have to refy at today's rates or sell. They will be looking for smaller places, possibly rentals.
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