Friday, February 09, 2007

NAR Email Ad Campaign

57 comments:

  1. That tells me that this whole thing is going to end really bad...

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  2. It looks like thousands of realtors are going to be out of a job soon! It also looks like lots of lawyers are going to make millions by filing suits on behalf of investors and buyers. God only knows how all this will end up.

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  3. We should take those banners, alter them (in a humorous way of course), and repost them here for people to use (along with the instructions on how to use them). Anyone good with image editing software?

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  4. New video for the NAR ad campaign:

    http://cbs13.com/video/?id=16928

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  5. this is for you david:

    http://www.tkffdn.org/what/location/cadc.php

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  6. Hilarious! Anyone who can read anything other than an advertising campaign out of this is definitely sour grapes bitter over their own personal inability to buy when everyone else around this IS buying. THIS really proves that this blog has become a sounding board for losers who want to blame others for their own sub-standard abilities. On the one hand I feel sorry for your BHs and your complete helplessness in the face of life. But your self-centered jealousy which you display with such glee, really negates any sympathy I have for you losers. Sorry, but those are the facts. No one is going to want to help you till you lose your attitude. So, just keep getting further and further behind while the rest of us keep moving forward.

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  7. "THIS really proves that this blog has become a sounding board for losers who want to blame others for their own sub-standard abilities."

    Heh... this actually says a lot more about you than it does us Lance. Here you are... a computer technician without even a basic understanding of economics... and you spend more time on this blog that David does. Why are you here?

    Ah thats right... you want to "advise" us. lol... or more like you just think that because you had the dumb luck to buy into the market just before it shot through the roof you are an expert now.

    I suppose you think that means you have exceptional "abilities."

    Funny how 6 years ago a young plumber could comfortably buy what a young CPA today can not. I guess the CPA just has "sub standard abilities" in your mind.

    Listen up and try to understand because I am going to make it as simple as possible for you.

    1. Housing prices have more than doubled during a period when wages have risen only slightly.

    2. Housing prices have hit a ceiling(due to statement 1) and will not be climbing in the forseeable future. In all likelyhood they will continue to drop for some time.

    Now, you can argue all you want that we should all rush out and buy crappy one bedroom condos in "transitional" neighborhoods but that does not make economic sense.

    If we had done that 5-6 years ago, clearly we would have come out ahead because the rising market would have allowed us to trade up easily. I however was in college at that point and hadn't even moved to DC. That simply wasn't an option for me.

    At this point buying into a flat or declining market does nothing to help. Renting actually allows us to save much more money than buying would.

    We have demonstrated the math for you so many times that I can only conclude that you are incapable or unwilling to understand that basic fact.

    There is NO reason to buy a house in a flat or declining market just to get your foot in the door. Turn that over in your head for a minute and see if you can figure that statement out. The market is NOT rising anymore. The only reason to buy in a flat market is because you want to LIVE there.

    You continually advise people to buy into a substandard living arrangment just so they will be "homeowners" and in your mind will no longer have "sub standard abilities."

    The truth is there is no reason to do that. I am living somewhere nicer, while saving more money by renting. IF rents rise to a point where buying makes sense, THEN I will consider buying.

    There is zero risk in such an arrangement. Rents are not changing that fast, and the housing market is going nowhere.

    Would it have been nice to have been a lucky as you and bought just before a historic run-up in prices? Sure... it would also have been nice to buy Microsoft back at its IPO or to have bought up a nice chunk of land outside San Francisco in 1848. I don't really feel bad about missing any of these great investments however as I wasn't really in a possition to make them.

    Let me be clear about one thing. You aren't even close to an expert here. Your statements have more than proven that time and again. You are just another average Joe who thinks they are an investing wizard because they happened to live in an area where the values shot up... DC is a whole city of brilliant investors! Along with Florida, California, Arizona, Nevada...

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  8. Lance,

    By the tone of the above comments either you forgot your medicine or maybe there is a little something in the wind about depreciating assets due to credit contraction.

    Relax, most of us here are serious savers and many are prior Homeowners like myself, so were good. I'm happy paying the tax's on all the dividend's and interest income, cause if I wasn't paying it would mean I didnt have it.

    Chill, your obviouslly fine financialy and those who post in here are at least students of financial markets of sorts which definately gives a certain advantage.


    Lance said "sounding board for losers"
    ummm I'm a corporate V.P. and also the Corporate Secretary have mutiple degree's several years of gross income in the bank and just turned 40. Two kids live in Anaheim Hills CA. pay $2100/month rent for homes that sell for 800K plus. But no I don't currentlly own a home. I did own 3 homes prior to 2006. But if you think I'm a loser, oh well, so what.

    Some might think a "Loser" is one who must use anger and hostility to get there point across. "Screaming at the top of their lungs when they have nothing to say".

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  9. Lance -- Sound and fury. What do ad campaigns really do? They are designed to make you feel inadequate so that you buy something that you don't need in order to part you from your money. Sorry to seem cynical, but what do you think? That ad campaigns are designed merely to inform the consumer? Do you live in a gum-drop world?

    Disclosure: I sold summer 2005 and sleep on a pile of cash and made ~40% ROI in equities in 2006 (got lucky with one company). So much for "getting further behind".

    PS: If you write "those are the facts", you should probably have written some prior to your statement.

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  10. "Strict code of ethics"????????

    A few Blood thirsty lawyers need to challenge this industry to its BS!
    A few class action lawsuits will do the trick.

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  11. Wow, Lance must be really depressed and bitter about his overpaying for a place in 2005. After claiming he was leaving forever, he just comes here and throws a fact-free tantrum.

    You know, I personally also check out realtor blogs like Urban Trekker in the DC area and read their cheerleading and optimism. Even though I find a lot of their stuff biased, there's also good nuggets of info about what's going on in the way of development and whanot. I don't go on their blog to scream and yell at them, because I'm very happy with my financial decisions.

    I still say either Lance is desperately unhappy with his decisions or he's a bubblehead doing a brilliant satirical parody of a housinghead.

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  12. Lance said...
    “Hilarious! Anyone who can read anything other than an advertising campaign out of this is definitely sour grapes bitter over their own personal inability to buy when everyone else around this IS buying.”
    “……Sorry, but those are the facts……..”

    So “Lance”, your data shows sales are up? I mean, if “everyone” is buying, sales and inventory would indicate such, correct? I’d be happy to peruse any “Facts” that you’d like to post.

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  13. The story of the “housing bubble” and profligate lending is over. The new story is of a total meltdown in the mortgage market which will soon enough spill into the real-estate market. People like Lance and David Lereah are irrelevant; soon enough they will be looking for a new job. It’s a waste of time to argue with them; instead check out the following blog site on mortgage market implosion, “http://mortgageimplode.com/”.

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  14. Where is the panic button? Or where is the “oh sh!@, my rate just reset on my 1.25% intro exotic no-doc subprime loan” button? They should also include a direct link to a bankruptcy attorney and tooth fairy button. The NAR is chasing a market that is going down. Not only do they have a ridiculous amount of new paying agents, they want to make sure they keep their syndicate running. This is tantamount to lobbying in Washington. If the market was so hot with so many homes flying off the streets, why would you even need to market so aggressively?

    No where do they discuss that HSBC just warned about the United States subprime market or that New Century Financial just took it in the shorts because they will have to buy back more bad loans than expected. Maybe they should have a link for this too no?

    Hard to believe that it is only February and the market is stalling out like a old Ford Pinto begging for the scrap yard.

    Dr. Housing Bubble

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  15. The 2007 Local Economy Challenge
    Forecasters Did Well in '06, Predict Another Year of Steady Growth
    Forecasters Did Well in '06, Predict Another Year of Steady Growth


    By Neil Irwin
    Washington Post Staff Writer
    Monday, February 12, 2007; Page D01


    www.washingtonpost.com/wp-dyn/content/article/2007/02/11/AR2007021101232.html

    Ouch! Looks like the bubble's burst will have to be pushed back yet one more year! But I'm sure the wait will be worth it. All those BHs waiting it out and all the Corporate Secretaries/VPs out there playing the market with the family's home will just hold off one more year for that brass ring. Sounds like a killer "investment" strategy to me! I guess I must be dumb for thinking it's not prudent to be gambling with the roof over your head. I'm sure all these "hares" out there looking to wait out a great deal will do much better than us "tortoises" who just believe do the best you can under current conditions. After all what is just one more year to wait for the bargain of a lifetime?

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  16. Mortgage defaults: Latest woe for housing
    Borrowers with less than stellar credit could find mortgages out of reach - the last thing the struggling real estate market needs.

    http://money.cnn.com/2007/02/12/news/economy/subprime_realestate/index.htm?cnn=yes

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  17. Lance said...
    “Ouch! Looks like the bubble's burst will have to be pushed back yet one more year! But I'm sure the wait will be worth it.”

    www.washingtonpost.com/wp-dyn/content/article/2007/02/11/AR2007021101232.html

    From the link you provided “Lance”.

    - They expect the unemployment rate to tick up slightly in Maryland and Virginia and the median price of houses to tick down.-

    -Most of our experts foresee a continued slide in residential real estate. The consensus view is that the median price of a single-family home, which fell about $10,000, to $431,900, last year, will drop to $429,000 by the third quarter this year. And they expect builders to take out fewer permits for new housing.-

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  18. Lance,

    are you for real? Let me get this straight.

    1. Your definition of "the tortoise" - those who DON'T use judgement/common sense/simple math and simply buy now b/c it's a gamble to do otherwise?

    2. Your definition of "the hare" - those who are currently spending LESS on housing than the owning equivalent, saving money, and waiting for affordability to improve and un-economic buyers to go away (armed with 100% LTV Sub-Prime loans).

    Who cares about punctuation/grammar, but do you proof-read your own copy for content? You're a joke, dude!

    LOL. I guess I'm just a hare, waiting for all the tortoises to explode.

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  19. From the article that LANCE HIMSELF mentioned and linked to:

    "Most of our experts foresee a continued slide in residential real estate. The consensus view is that the median price of a single-family home, which fell about $10,000, to $431,900, last year, will drop to $429,000 by the third quarter this year. And they expect builders to take out fewer permits for new housing.

    "There's no getting around the fact that housing is slowing," said James Dinegar, chief executive of the Greater Washington Board of Trade."

    So, in an effort to tell us that house prices aren't falling, Lance links to an article that says that house prices fell, as the experts predicted, and will continue to fall.

    Lance's desperation is pathetic.

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  20. Oh, and here's more from the article:

    "Not all the panelists' predictions for 2006 were on target. They wrongly predicted that house prices would continue their rise."

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  21. Lance said....After all what is just one more year to wait for the bargain of a lifetime?


    this is the only smart thing i've read in any of your posts.

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  22. Did you even read the article you linked to lance?

    They are predicting housing prices will drop again in 2007. They aren't predicting huge drops... but they aren't exactly predicting bidding wars in May either like you did.

    So much for the "it is always a good time to buy" line you have been preaching for the last year as prices fell all over this region.

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  23. Gosh, I've never seen so many non-thinking people in one place! You think median price falling from "$431,900, last year, to $429,000" next year means we're getting the "gloom and doom" David predicted? If you can't understand why a slip of median price of 0.67% (i.e. that's LESS THAN 1%) is meaningless when median prices in DC went up over 24% in the 1 year from 2005 to 2006 alone, then I can begin to understand why you are so helpless in the face of lowering your housing costs over the long term. In sum, a predicted drop in prices of less than 1% is not a bubble bursting ... and if you do't believe you can do better than 0.67% on your own through your own efforts, then you are a pitiful lot, at best.

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  24. anon said:
    "predicting bidding wars in May either like you did."

    who predicted bidding wars in May? It certainly wasn't me. The question is and always has been the question of "the premise there is a housing price bubble". As you read for yourself today, there wasn't one last year and there won't be one next year. Does the truth hurt so badly you must try to deflect it by shifting the argument?

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  25. (Sigh) . . . The new lance just isn't as good as the old lance. While I have serious disagreements with the old lance every once and a while he would make a good point and every once and a while you could come to an agreement.

    The new lance is soo full of emotion, at least the old one would try and reason things (even if the logic was flawed). Maybe I haven't read the blog for long enough but I don't remember o.l. calling people losers and just being very rude to the posters here. Maybe lance has turned the corner and become a better lance, just like the housing market.

    Sigh . . . at least the old lance could reason somewhat . . . .

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  26. The NAR Spin Doctors are out in force here in Connecticut- saying locally there is lots of traffic. Funny, in checking the NAR Realtor.com site- I see the same properties that have been hanging around since last Autumn.

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  27. at some point we are all gonna find out that Lance is/was a troll.

    thre is no way any normal person can be this bullish on RE at this point in the cycle.

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  28. From today’s (Feb 13) Wall Street Journal:

    Freemont General Corp., a sizable subprime mortgage lender, has stopped providing "piggyback" second mortgages that are frequently used by financially stretched borrowers seeking to finance 100% of a home's price, according to emails received this week by mortgage brokers.

    Such second mortgages typically cover the final 20% of the home's cost, supplementing a first mortgage that covers 80%. Investors have grown increasingly wary of buying such loans from lenders amid a surge in defaults by recent subprime borrowers. The holder of the second-lien mortgage can hope to collect proceeds from the sale of collateral only if the holder of the first mortgage is fully repaid. In many foreclosure cases, second mortgages must be written off.

    Reduced availability of these piggyback loans and other mortgages designed to help people stretch to afford homes is likely to eliminate some potential home buyers this year, housing industry watchers have warned. Lenders are rapidly tightening up on their credit standards in the face of pressure from regulators and wariness among investors who buy mortgage securities.


    It looks like there is not an endless supply of easy money, as the people who actually put their money where there mouths are seem to be saying “No mas, por favor.”

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  29. This is for you Lance! There is no housing bubble. Prices have NOT increased in the past few years. It is All in our heads. People just like to overpay for homes like buying a $400 dollar shirt cause it has a designer label. There is no bubble Lance you just rich and can afford paying $900,000. Why didn't you pay one cool million instead or a million and a half. You are so rich lance. Why don't you move out of DC? You know DC is high on the list when it comes to terrorism.

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  30. Shane,

    newsflash! the person posting as Lance is really VA INVESTOR! that is why the posts make no sense at all. every so often Lance did come up with good facts...

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  31. caveat said:
    "Freemont General Corp., a sizable subprime mortgage lender," ... the emphasis is mine. Subprime loans (i.e., loans at much higher than normal interest rates to high risk, low credit score, borrowers) are but a tiny tiny portion of all loans made. The way you present this, you make it sound like all "piggyback" second mortgages are subprime ones. Subprime mortgages make up less than one percent of all mortgages. Yes, there are probably more subprime piggyback second mortgages than there are primary mortgages, but you're still talking a miniscule proportion of all piggyback second mortgages. At first I thought your quoting the subprime default stats was simply a misunderstanding on your part of what was a subprime loan. But now, after I've explained what it is and refereneced wikipedia's explanation(http://en.wikipedia.org/wiki/Sub-prime_lending), I must come to the conclusion that you are being deceitful. Why?

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  32. shane said:
    "The new lance is soo full of emotion, at least the old one would try and reason things (even if the logic was flawed)."

    That's right, I got tired of nicely stating my point and being countered by emotion-filled, nasty responses. I thought a taste of their own medicine might help the immature bubbleheads.

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  33. The fremont thing is bad news for the housing market. Many other lenders will follow suit. This will remove a lot of buyers from the market, well, who should not be buyers anyway. Just imagine, Lance wouldnt have been able to buy his place he is in now! All this means is that prices will come down farther and faster.

    On the topic of Lance, or the Lances of the world. The picture that lance is missing is that many of the Bh's were looking for someone to logically tell them that buying is a good idea and giving a factual argument why it was smart. That is how many of us found the bubble sites. We wanted guidance and answers to why someone making 50K a year can buy a 600k home and a couple making 200k couldnt. We found it. The lance's of the world risked it all not using any financial conservatism either trying to become rich quick or getting sucked into the "buy now or be priced out forever" koolaid. We also realize that Lance has not ever given one factual or logic based argument on why anyone would buy using a risky loan, or buy in a falling market.

    So, we are still on our quest for any housing head to provide us some small slice of logic or facts on why now would be a good time to buy a home so we can all make a purchase and feel confident with that financial decision.

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  34. "So, we are still on our quest for any housing head to provide us some small slice of logic or facts on why now would be a good time to buy a home so we can all make a purchase and feel confident with that financial decision."

    I'm not a housing head, but I can make the case. If you keep a sharp eye out on listings, and compare asking prices to rents for similar places in similar areas, you will find a few reasonably good deals, given today's interest rates. Even if interest rates rise and the value of your house stays flat for awhile or even falls, you'll still save money over renting over the long-term (since you locked in at a low rate), or have a cash-flow positive property to rent out if you move in a few years.

    Most houses in DC are overpriced, and we're going to see movements downward in medians and averages and other such statistical aggregates. But if you look for the really good deals, you'll find them. They'll be a small percentage of the total, but they do and will exist.

    At the end of the day, you just have to do the math.

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  35. So, we are still on our quest for any housing head to provide us some small slice of logic or facts on why now would be a good time to buy a home so we can all make a purchase and feel confident with that financial decision.

    Here you go: Why it's different this time - Part 2.

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  36. Lance:

    Subprime mortgages make up less than one percent of all mortgages.

    Kass:

    http://www.thestreet.com/_tscs/newsanalysis/investing/10337747.html

    Subpar Subprime a Growing Problem

    However, the problem runs deeper than 5 1/2 years ago because nearly 15% of the mortgages made in 2006 were subprime. That is almost triple the penetration of subprime compared to 2000-01.

    Should I believe Kass or should I believe... Oh wait Lance is not real.

    I must admit I liked the old Lance character. This one sounds like Lance and VA mixed into one. The senile bullshit of Lance mixed with the ignorant arrogance of VA. Both fictional probably, but hey it keeps the blog's ratings up. :)

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  37. The Real Bob said...
    “On the topic of Lance, or the Lances of the world. The picture that lance is missing is that many of the Bh's were looking for someone to logically tell them that buying is a good idea and giving a factual argument why it was smart. That is how many of us found the bubble sites.”

    “So, we are still on our quest for any housing head to provide us some small slice of logic or facts on why now would be a good time to buy a home so we can all make a purchase and feel confident with that financial decision.”


    Hear, Hear!

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  38. Anonymous said...
    “every so often Lance did come up with good facts...”

    Sorry anon, I could not disagree more. I’ve been posting on this site for quite some time and “Lance” has yet to orate upon any argument supported by facts. I’ve asked for links, data, information; even the ingredients for a can of tomato soup.


    I’m still waiting.

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  39. "It looks like there is not an endless supply of easy money, as the people who actually put their money where there mouths are seem to be saying “No mas, por favor.”"

    This is what will ultimately pop the bubble. The bubble is really primarily a product of loosened lending standards in the first place, as the free money dries up the bubble will continue to pop.

    As for "lance" pointing out that this was a sub-prime lender... yes... it was, but try to use your head for a moment.

    Who is going to offer a lone on 20% of the value of a house in a declining market. If that loan defaults for any reason It is that 20% loan that is going to be left without any collateral. Who the heck loans six figure sums without collateral?

    The credit tightening is being seen first in the subprimes, but it is a general trend.

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  40. http://money.cnn.com/2007/01/24/news/economy/benner_affluent.fortune/?postversion=2007012513

    I found this article interesting because it speaks to what people in "the know" understand about real estate. It's just not the best investment out there.

    From the article: "Millionaires reduced their exposure to real estate to 8 percent from 13 percent; and international investments increased to 10 percent from 8 percent."

    What is interesting is NOT that millionaires reduced their real estate exposure recently---it is that in 2005 (peak of the market) the average portfolio had just 13% dedicated to real estate. Compare that to the average homeowner's "exposure" to the real estate market. For most people their home represents what - 50%, 80% of their net worth?

    That is why it does matter when you buy.

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  41. "15% of the mortgages made in 2006 "

    I am glad someone pointed that out. Lance was dreaming about some less then 1% statistic that doesn't exist.

    Robert said, "Sorry anon, I could not disagree more. I’ve been posting on this site for quite some time and “Lance” has yet to orate upon any argument supported by facts. I’ve asked for links, data, information; even the ingredients for a can of tomato soup."

    I agree 100%. I have been posting here a while and lance and never posted anything factual. Well unless you consider his rant about saudi princes and lawyers buying up everything in site.

    ANON 6:38 AM, you are right on the money. I have said this before. The most wealthy real estate investor ever sold all of his interest in US real estate in 2004, buffet. When asked why, he said "I got rich by selling too early". Its amazing that more people just don't look at what the rich are doing and take that into account. They have unlimted resources and most the time no more then the average joe.

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  42. Anon 6:38 said:
    "I found this article interesting because it speaks to what people in "the know" understand about real estate. It's just not the best investment out there."

    That's right ... and that's precisely why it is a good time to buy if you are a consumer of real estate (vs. an investor in real estate.) Look at it this way. When is the best time to buy a car? When the automakers are fat and happy ... or when they are finding their profit margins lean and they have to deal. Can you see why as a prospective home owner it is important that you remember you are a consumer (i.e., looking at making an expense) and not an investor.

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  43. Lance should have said:

    "I am sorry when I said Subprime mortgages make less than 1% of the total mortgages. I am sorry to have said, it is a good time to buy anywhere anytime anyhow. But since you guys have beaten me down with my own bullshit, I will modify my stance to say 'It is a good time to buy now because Lenders are now Fat and Happy'. Sorry for the confusion. I am an idiot.

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  44. Anon,

    Subprime mortgages as a percentage of all outstanding mortgages is miniscule whether that percentage is 1% or 5% ... and not going to bring about the gloom and doom predicted by BHs ... in case you missed the point of my post. Actually, I don't think you did ... but you are instead just trying to "change the subject" since you can't logically counter what I said in regards to subprime mortgage deliquencies not causing gloom and doom. Additionally, it also sounds like you don't understand that the government encouraged subprime lending (i.e., lending to people with bad credit histories) as a public policy that serves to ensure that more people are able to be homeowners ... even if circumstances have forced them into the "bad credit history" group. Here is a link from the Federal Reserve detailing this public policy should you want to educate yourself: http://www.federalreserve.gov/boarddocs/Speeches/2004/20040521/default.htm Again, though remember that my point was that subprime mortgages are so few that they aren't going to bring gloom and doom even if they all defaulted (which of course won't be the case.) As for the it's a good time to buy anytime, I never said that. I always said there is never a bad time to buy. By that I mean there is never a time that one should "wait it out" because they feel themselves unable to cope with the realities of the current market. Unless one of course is a complete idiot and must rely on things falling into their laps rather than their own hard work and research and shrewd negotiating. Yes, YOU probably should wait it out considering how you have such dificulty understanding even simple things ... And I am sorry that you are so confused, but it really isn't possible to post at your level. Expressing ideas as complex as these at a kindergarten level ... just for you to understand, just isn't in the cards.

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  45. This embarrasses me as a Realtor. I wish they would stop and just stay out of the business of convincing both sides that NOW is the right time for them.

    Idiots. Really. Idiots.

    I wish they didn't have a monopoly, otherwise I'd start a non-REALTOR association.


    Thanks

    Frank - Virginia Realtor
    BLOG.FranklyRealty.com

    As seen in BusinessWeek, WSJ, NY Times.

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  46. David,

    Here's a great gem that I found from David Lierah from May 2002.

    The national median existing-home price was $150,900 during the first quarter, up 8.0 percent from the first quarter of 2001 when the median price was $139,700. The median is the midpoint, which is a typical market price where half of the units sold for more and half sold for less.

    David Lereah, NAR's chief economist, said affordability in most areas remains favorable despite the rise in home prices. "Although low interest rates are the most important factor in housing affordability, the other components -- income and price -- remain in balance," he said.


    Also give a great historical perspective on just how crazy the market was from 2002-2005. Did you know that VA Beach is more expensive now than Long Beach in OC was in 2002? Wow.

    http://www.scienceblog.com/community/older/archives/K/5/pub5706.html

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  47. Lance said "they feel themselves unable to cope with the realities of the current market."

    LOL. Are you kidding me? Cope with the realities? Pot calling the kettle black. You can't even admit that the marekt is falling and looks real bad.. You cant even COPE with the fact that you lost money on your home last year. You can't even cope with the fact that you dont have one single fact to support any claim you make!

    For as old as you are, I figured you would have learned to cope by now.

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  48. Let's get a few things straight:

    1. The closest thing Housingheads have to a point is that buying in an overvalued market may be better than never ever buying.

    1a. Those aren't your only choices.

    2. Housingheads don't understand what "timing the market" means.

    2a. If you choose not to buy even when you could afford to because prices are too high relative to rents, you are NOT trying to time the market. You're just engaging in a good fundamental analysis in deciding between buying and renting.

    2b. If you choose not to buy even when buying is better than renting because you expect prices to fall (more), then you are trying to time the market.

    3. Most people on here are doing 2a.

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  49. Anon 9:55 said:
    "Also give a great historical perspective on just how crazy the market was from 2002-2005. Did you know that VA Beach is more expensive now than Long Beach in OC was in 2002?"

    I don't follow how this supports your assertion that the market was "crazy"? The general assertion from BHs is that easy credit has driven up prices above and beyond what substantive factors would have. If that is the case, then we would expect areas throughout the nation (or the world) to go up in tandem. I.e., IF real factors had caused one local market to rise 3% and another local market to rise 10%, then they both would have gone up roughly the same when you factored in that "easy money" added 100% to the price ... or 103% in total for the first local market and 110% in total for the second local market. But you are saying that Va. Beach is now more expensive than Long Beach. Doesn't that indicate that real growth and not the supposed "easy money" growth is responsible? After all, if it were easy money pushing up prices to the extent heralded by BHs, then BOTH local markets would have risen in price in tandem. But they didn't. Could it be other factors such as that Va. Beach in the last 10 years has been filling up the area north of the "no development" green line that was instituted some 20+ years ago? Land use to be practically limitless and thus "cheap" ... now, there is very limited developable land north of the Green Line ... Don't the laws of supply and demand tell us that that is where the supply curve starts to really go vertical? An additional factor could be the millions of dollars poured into the area due to the war in Iraq ... Va. Beach after all hosts part of the largest complex of military bases in the world. Long Beach has some Navy installations, but most of its business is comercial. In sum, your supporting factor for proving the bubble actually does more the opposite. Sorry to burst your bubble.

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  50. Subprime mortgages as a percentage of all outstanding mortgages is miniscule whether that percentage is 1% or 5%

    umm no. The percentage quoted was 15%. Can you read? FIFTEEN. Big difference between 1, 5 and 15. 1 may be miniscule, but 5 and 15 are not.

    but you are instead just trying to "change the subject"

    Change what subject? Your point was subprime mortgages are miniscule. I pointed out they are not.

    Additionally, it also sounds like you don't understand that the government encouraged subprime lending

    And this is the basic problem. Lack of regulation caused the explosion in creative lending practices. Bernanke was grilled about this in his latest congressional testimony:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aQVFekAn1_ao&refer=home

    As for the it's a good time to buy anytime, I never said that. I always said there is never a bad time to buy.

    That statement is so dumb, I feel pathetic to even respond to that.

    And I am sorry that you are so confused,

    Confused? This coming from someone who made a stupid statement that "subprime mortgages make up less than 1% of all mortgages". Atleast I have my facts straight.

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  51. Anon said:
    "Confused? This coming from someone who made a stupid statement that "subprime mortgages make up less than 1% of all mortgages". Atleast I have my facts straight."

    Sorry, you DON'T have your facts straight. The 15% your are referring to is the percent of mortgage originations last year NOT the percentage of existing mortgages that I was referring to. They are not one in the same for several reasons. First off, as recently as a few years ago, the percentage of originating mortgages that were subprime was much much lower. Secondly, subprime mortgages tend to be a shortterm bridge to help low income minorities get into the housing market. Most refinance to a lower interest loan (i.e., non-subprime loan) within a matter of less than 5 years. We discussed this some months back in case you missed the discussion. I am being generous when I estimate that 5% of existing loans are subprime. It is most likely far less ... Factor in the fact that close to 40% of all primary residences and 80% of all second homes and rental properties are owned free and clear, you are talking about a miniscule proportion of all properties owned by people who own them via sub-prime mortgages. (And yes, I have referenced the sources for these numbers several times in the past and am not going to do so again. You can look through the archives.) Hanging your hat on the economy tanking or prices falling precipitously because of these few subprime mortgages is really quite amusing. It ain't gonna happen. Accept reality. The economy has boomed, more people than ever have become homeowners, and since the amount of land isn't getting any larger, current prices correctly reflect reality. You're living in the past if you think otherwise.

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  52. Lance,

    VA Beach and Long Beach did go up in tandem. Long Beach is now $550K. DC went from 230K to 450K. Read the damn article before you post. That's the point. Almost every market in the country did go up. The nationwide median home price went from 139K in 2001 to 230K by 2005.

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  53. Lance said...
    who predicted bidding wars in May? It certainly wasn't me.
    February 12, 2007 5:42 PM



    Lance said...
    wannabuy said:
    "To think this really hasn't started. It won't be until May that things get interesting in the RE market. So Yawn."

    I agree. That's just about when a lot of bubbleheads will be coming to the realization that missed the bottom and will be fighting each other to buy at prices higher than current prices. Ouch!
    January 13, 2007 3:39 PM

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  54. Robert, again, please stop saying people have said things they haven't. I didn't say there would be bidding wars in may. Saying the BHs will be out there competing against each other for the same properties by May is not saying there will be bidding wars. You have a real comprehension problem. IMHO that comprehension problem stems from your inability to understand or appreciate others' viewpoints. You see things in black and white. And that which isn't in complete agreement with the "white" that you see must therefore be the "black" that you see. Sorry, but there's a lot of gray out there ... and most arguments that don't fall in line with yours fall in the gray area and not in your pre-conceived notions that make up the black area. When quoting others to "prove" your point, you only serve to greatly embarass yourself since it is clear to all others that you did not understand what was said. So, go on,keep embarrassing yourself by putting words into my mouth and the mouths of others.

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  55. Lance said...
    “I didn't say there would be bidding wars in may. Saying the BHs will be out there competing against each other for the same properties by May is not saying there will be bidding wars.”

    No, You said:
    fighting each other to buy at prices higher than current prices. Ouch!
    January 13, 2007 3:39 PM

    “You have a real comprehension problem. IMHO that comprehension problem stems from your inability to understand or appreciate others' viewpoints.”

    I understand you just fine “Lance”. And you are appreciated. You fill a much needed niche of this blog. Any newcomer will have studied your comments and will recognize the BS the REI feeds them as such.

    “When quoting others to "prove" your point, you only serve to greatly embarass yourself since it is clear to all others that you did not understand what was said. So, go on,keep embarrassing yourself by putting words into my mouth and the mouths of others.

    You’re right “Lance”, you did not call for bidding wars. You called for BH’s coming to fisticuffs in the streets for housing.








    I would have stuck with bidding wars.

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  56. Sorry, you DON'T have your facts straight. The 15% your are referring to is the percent of mortgage originations last year NOT the percentage of existing mortgages that I was referring to.

    Yes, Mr. Chameleon. This is what I was referring to. This was in reference to what you said:

    "Subprime loans (i.e., loans at much higher than normal interest rates to high risk, low credit score, borrowers) are but a tiny tiny portion of all loans made"

    Any logical person knew what you were talking about. So now you dance about the subject.

    The point is subprime loans were abnormally high in 2006, 2005 and 2004. Traditionally they have been around 5% in a sane environment. My point is that the abnormally high number of subprime loans and other creative loans are the actual cause of the run up in prices in the last three years. Also, if you would care to learn about history, real estate corrections in prices are almost always accompanied by problems in the subprime market. This is the FIRST indicator to look at, and in real estate bear markets almost always translates to problems in the prime market as well.

    But since you dance around the issue and want to be quoted for correctness, this is what you said:

    "Subprime mortgages make up less than one percent of all mortgages."

    So tell us. Point us to accurate data that says subprime mortgages make up less than one percent of all mortgages.

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