tag:blogger.com,1999:blog-13164186.post8018192655982361217..comments2024-01-27T19:26:32.604-05:00Comments on Bubble Meter: Mr. Yun's September 2005 Prediction is Way OffDavidhttp://www.blogger.com/profile/11169148764438565562noreply@blogger.comBlogger38125tag:blogger.com,1999:blog-13164186.post-28522333246804397192007-12-07T18:13:00.000-05:002007-12-07T18:13:00.000-05:00"As long as you didn't buy in a bubble, that would..."As long as you didn't buy in a bubble, that would be a correct statement. <BR/><BR/>But seeing as sellers are still deluded in bubbleland and dreaming of huge profits they aren't entitled to, ain't no benefit to buying now. <BR/><BR/>Thanks for playing lance-a-lot-like"<BR/><BR/><BR/>Wow, somebody is angry about something. I just sold a condo at a very nice profit. Now go cry.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-2341773990176078242007-12-06T07:37:00.000-05:002007-12-06T07:37:00.000-05:00"But while houses may have a calculable average va...<I>"But while houses may have a calculable average value, many of them were bought 5, 10, 20, 30 years ago, and people making less money than you are making the payments comfortably. That's one of the benefits of owning longterm."</I><BR/><BR/>Excellent point. <BR/><BR/>2 of my neighbors own their places outright, one is retired on a fixed income, the other is a high-tech, high-wage professional. <BR/><BR/>The retiree bought in 1974 and paid it off on schedule. The other bought in 1985 and noticed that the $60,000 in their <B>checking</B> account would pay off their house, so they just did it.taghttps://www.blogger.com/profile/17590019556200898159noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-213691854736656542007-12-05T22:36:00.000-05:002007-12-05T22:36:00.000-05:00"people making less money than you are making the ..."people making less money than you are making the payments comfortably. That's one of the benefits of owning longterm."<BR/><BR/>As long as you didn't buy in a bubble, that would be a correct statement. <BR/><BR/>But seeing as sellers are still deluded in bubbleland and dreaming of huge profits they aren't entitled to, ain't no benefit to buying now. <BR/><BR/>Thanks for playing lance-a-lot-likeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-39520874740484082572007-12-05T21:33:00.000-05:002007-12-05T21:33:00.000-05:00"begetting interest in your community is just prop..."begetting interest in your community is just propaganda bull. "<BR/><BR/>What did you expect from lance?<BR/><BR/>According to him prices are going to be moving up again very very soon. (he said that this spring)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-46408921845447812302007-12-05T21:21:00.000-05:002007-12-05T21:21:00.000-05:00ANON said:"No. This would work if every house chan...ANON said:<BR/>"No. This would work if every house changed hands every year - people with above average means would get above average houses. But while houses may have a calculable average value, many of them were bought 5, 10, 20, 30 years ago, and people making less money than you are making the payments comfortably. That's one of the benefits of owning longterm."<BR/><BR/>Additionally, looking at where one's income falls on the distribution scale doesn't take into account people's relative wealth. There are many retired couple out there who have very limited income but lots in the way of savings with which to purchase a house. Ditto "move-up buyers" using their equity to get lower (or no) payments.Lancehttps://www.blogger.com/profile/12216089306021385355noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-54301656398111008432007-12-05T20:40:00.000-05:002007-12-05T20:40:00.000-05:00"since my household income is 50K more than the av..."since my household income is 50K more than the average salary in MD then I should be able to get a better house than average... Does this make sense?"<BR/><BR/>No. This would work if every house changed hands every year - people with above average means would get above average houses. But while houses may have a calculable average value, many of them were bought 5, 10, 20, 30 years ago, and people making less money than you are making the payments comfortably. That's one of the benefits of owning longterm.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-49051417734688875542007-12-05T19:18:00.000-05:002007-12-05T19:18:00.000-05:00Anon said:"Im not buying a house until I find a ni...Anon said:<BR/>"Im not buying a house until I find a nice house at 26% of my salary and since my household income is 50K more than the average salary in MD then I <B>should</B> be able to get a better house than average... Does this make sense?"<BR/><BR/>Whenever I have to use the word <I>should</I> in asking myself if I am making a good decision, I have to wonder if I'm not letting a little "wishful thinking" get in the way of logic ... Yes, things <I>should</I> be a certain a way ... Just like everything always <I>should</I> be fair. But is it?Lancehttps://www.blogger.com/profile/12216089306021385355noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-11692899129740868442007-12-05T14:38:00.000-05:002007-12-05T14:38:00.000-05:00I just want to say that the argument about home ow...I just want to say that the argument about home ownership begetting interest in your community is just propaganda bull. I know renters who are very involved in their community. I think it is a function of one's own desire to be involved. I've known plenty of hermits who owned their houses and never got involved in the community that they lived in for many, many years even in a small town. Maybe if one has kids, they might be more interested in the education system and things that revolve around that, but to say owning a house is the key to community involvement is just unsubstantiated. Perhaps as an owner you would be more interested in zoning laws and property tax issues, but other than that, a renter could be just as involved. It's a cute little propaganda slogan for realtors like Century 21but I just don't buy it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-49299864332043210962007-12-05T07:38:00.000-05:002007-12-05T07:38:00.000-05:00I went to get pre approved for a loan in September...I went to get pre approved for a loan in September just to see what I could get. I told the bank rep I didnt want to spend more than $2,500 a month total for a mortgage. She said I could get $350,000 but with how much I make I could get much more money. I said im not comfortable with paying any more.. The moral of the story is, previous to the bubble people spent/were given by banks 26% (I need to check but this is close) of their salary on housing costs a month. Now banks give up to 45%. Im not buying a house until I find a nice house at 26% of my salary and since my household income is 50K more than the average salary in MD then I should be able to get a better house than average... Does this make sense?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-61774296987709751632007-12-04T23:27:00.000-05:002007-12-04T23:27:00.000-05:00Hahahaha. Click here for a humorous explanation of...Hahahaha. Click <A HREF="http://gregmankiw.blogspot.com/2007/12/subprime-problem.html" REL="nofollow">here</A> for a humorous explanation of the subprime mortgage problem.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-65447092971236805342007-12-04T11:51:00.000-05:002007-12-04T11:51:00.000-05:00Another drop in prices, now down to $379,900, from...Another drop in prices, now down to $379,900, from an all time peak of $500,000.<BR/><BR/>http://www.housingtracker.net/askingprices/DC/Washington-Arlington-Alexandria/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-86065195879095456722007-12-04T11:50:00.000-05:002007-12-04T11:50:00.000-05:00This just in:Deflationary Credit Downturn Is Under...This just in:<BR/><BR/><B>Deflationary Credit Downturn Is Underway</B><BR/><BR/>In the U.S., credit flowing to American companies is drying up at a pace not seen in decades. This idea was discussed in Lenders Rapidly Tighten Credit. The same thing is happening in the UK there are Pleas for rate cut as interbank loans dive:<BR/><BR/>The sterling interbank market has collapsed at the fastest rate in modern history, prompting pleas for immediate rate cuts from a chorus of top British economists.<BR/><BR/>http://www.minyanville.com/articles/index/a/15091Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-59918126441166687892007-12-03T15:59:00.000-05:002007-12-03T15:59:00.000-05:00Anonymous said... ""I would be interested to see i...Anonymous said... <BR/>""I would be interested to see if the most desirable areas to live also have a high rate of owner-occupied property."<BR/><BR/>I was at Nieman Marcus yesterday, two different people, both clearly filthy rich, were talking about how nice their new apartments are ... "<BR/><BR/>Anon 7:24 ... "filthy rich" does not equal "taking care of where one lives and giving back to the community in which one resides". Owners with a vested interest to do that because, well, they have a vested interest in it ... irrespective of how little or how much money they make at their jobs. <BR/><BR/>It's kind of the converse to "I rent and don't have to take care of my place ... something breaks and I just get it fixed (i.e., no incentive to see it doesn't break in the first place.) Or the "If I'm renting I can pick up and leave whenever I want!"Lancehttps://www.blogger.com/profile/12216089306021385355noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-84849865460902206002007-12-03T13:39:00.000-05:002007-12-03T13:39:00.000-05:00This just in on why the proposed gov't bailout won...This just in on why the proposed gov't bailout won't work:<BR/><BR/><I>National Mortgage News. “The big event in Washington is the Office of Thrift Supervision summit on the mortgage mess…officially, OTS is calling it National Housing Forum. The there is plenty of talk in the media about Treasury unveiling a big plan where servicers will ‘reset’ subprime ARMs.”<BR/><BR/>“One mortgage executive told us that the big problem is payment-option ARMs where the consumer has a rate of 3%. A rate that low cannot be artificially maintained by servicers. In other words, if Treasury thinks a servicer (or end investor) will roll over a 3% rate, the government is dreaming.”<BR/><BR/>“One industry veteran — requesting his name not be used — raised another issue: ‘OK, so you keep the rate the same for the subprime borrower. Then the prime borrower who has been current all along and who also has an ARM says, ‘Hey me too. Keep my rate the same.’”<BR/><BR/>“This industry vet said Treasury has to either come up with a plan where all ARM rates are frozen or none are. ‘Think about the lawsuits,’ he said.”</I><BR/><BR/>http://data.nationalmortgagenews.com/columns/hearing/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-51351834452927742772007-12-03T11:40:00.000-05:002007-12-03T11:40:00.000-05:00People who own homes have a vested interest in the...<I>People who own homes have a vested interest in their community. They care more about what goes on b/c they are tied to an area -- this is on purpose. The federal gov't provdes the mortgage interest deduction for this very reason. Homeowners like other homeowners b/c it provides stability w/in the community. That is something that renting cannot buy.</I><BR/><BR/>Right, but what happens when a large number get foreclosed and their houses sit empty and crackheads break in and squatter in the houses? That can't be good for an owner occupied community can it?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-16025437561830063302007-12-03T10:24:00.000-05:002007-12-03T10:24:00.000-05:00"I would be interested to see if the most desirabl..."I would be interested to see if the most desirable areas to live also have a high rate of owner-occupied property."<BR/><BR/>I was at Nieman Marcus yesterday, two different people, both clearly filthy rich, were talking about how nice their new apartments are...that's the thing about DC, lost of rich people, but very transient, not a lot of them stay for more than a few years = no buy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-26230356098629869702007-12-03T09:58:00.000-05:002007-12-03T09:58:00.000-05:00hi lance!hi lance!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-55927271000711443482007-12-02T20:29:00.000-05:002007-12-02T20:29:00.000-05:00People who own homes have a vested interest in the...People who own homes have a vested interest in their community. They care more about what goes on b/c they are tied to an area -- this is on purpose. The federal gov't provdes the mortgage interest deduction for this very reason. Homeowners like other homeowners b/c it provides stability w/in the community. That is something that renting cannot buy.<BR/><BR/>I would be interested to see if the most desirable areas to live also have a high rate of owner-occupied property.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-35707015588164276292007-12-02T18:48:00.000-05:002007-12-02T18:48:00.000-05:00Hey, Sen. Clinton is talking about freezing forecl...Hey, Sen. Clinton is talking about freezing foreclosures! Woo hoo! Free rent for everyone. :) Ok, this will bankrupt the states of Florida and Wisconsin. Which other ones? <BR/><BR/>http://online.wsj.com/article/SB119663648146011092.html?mod=googlenews_wsj<BR/><BR/><BR/>And what about pension plans? This will bankrupt quite a few. Ouch. <BR/>401k's? Hurt. <BR/><BR/>This screams get your money out of the dollar and wait for the dust to settle. Another Smoot-Hawley act. :( But if there is one thing politicians do well, its over-react and make the problem worse. <BR/><BR/>Or does anyone really think this won't end the CMBS market? Think about how many jobs that erases. Ugh... Not many homes will trade sans mortgages. Talk about geographic lock. This won't prop up the market, it will make it so no one will risk their money lending on real estate. <BR/><BR/>Got popcorn?<BR/>Neilwannabuyhttps://www.blogger.com/profile/04297458705683991405noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-36715092613480896202007-12-02T01:38:00.000-05:002007-12-02T01:38:00.000-05:00Looks like all the doomsdayers waiting for all of ...<I>Looks like all the doomsdayers waiting for all of the subprimes to re-adjust may just be out of luck...and waiting on the sidelines for a "cheap" home forever!</I><BR/><BR/>Well, if you actually read the article it states the following:<BR/><BR/>"Those involved in the deal said alliance members were aware that some homeowners, no matter how much aid they receive, might never be able to afford their homes. They also do not want to help real estate speculators. The aim would be to reach homeowners who, with lower interest rates, could keep up their monthly payments."<BR/><BR/>Since the majority of subprime loans went to borrowers with ultra low teaser rates, IO, and neg am, a few percentage points is not going to help them. Also, speculators played a big part. Sorry, but the housing bubble is still going to deflate, despite a few people keeping their homes.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-65504785571800935712007-12-01T22:24:00.000-05:002007-12-01T22:24:00.000-05:00Anonymous said... “Looks like all the doomsdayers ...Anonymous said... <BR/>“Looks like all the doomsdayers waiting for all of the subprimes to re-adjust may just be out of luck...and waiting on the sidelines for a "cheap" home forever!”<BR/><BR/>Wow! Government hand outs! Yea……everything is A OK in the housing industry! Nothing to see here folks…move along! Buynoworforeverbepricedout!Theyarentmakinganymoreland!Nowisaperficttimetobuy!roberthttps://www.blogger.com/profile/10354810363004791622noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-64181282162187588872007-12-01T21:48:00.001-05:002007-12-01T21:48:00.001-05:00This is like the "yell at Lance" blog. Real Lance ...This is like the "yell at Lance" blog. Real Lance or faux Lance. For better or worse. <BR/><BR/>I really really really like the post from 3:01 PM on 11/29. This poster is really getting at the crux of the issue: Depending on market conditions and other assumptions, owning makes more sense than renting, but as this poster clearly points out, that is NOT ALWAYS TRUE. <BR/><BR/>A useful analogy: Do you lease (rent) or buy your car? For a wide variety of reasons, most people buy their cars (and most financial advisors suggest that leasing is a sucker's bet.) But if you change the terms and/or conditions underlying car ownership vs. leasing, it is no longer clear that leasing a car is a bad deal. You may say, "That's crazy, why would you ever lease a car?" But you have to think about the assumptions/conditions underlying that evaluation.<BR/><BR/>So the upshot is, for Lance, Lance-the-imposter, and anyone else out there who stills sings the praises of buying vs. renting, at what point would YOU rent rather than buy? What conditions would make renting more sensible than buying for you? You really need to think about this b/c as 11.29/3:01 points out, the answer is not clearcut. When the market was running up at 20%/year, it was generally an easier decision since that appreciation swamped lots of the other variables. But with a flattening/downturn in the market, you have to THINK about things.<BR/><BR/>And I don't think that buying is obviously better than renting, either in general or given current conditions.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-14203622747345128292007-12-01T21:48:00.000-05:002007-12-01T21:48:00.000-05:00Anonymous said... "I suggest that all homedebtors ...Anonymous said... <BR/>"I suggest that all homedebtors that take the tax payers bail out go to this site <BR/>Subtle Confessions and confess <BR/>their sin of taking our money to pay for your greed. How do you sleep at night!?<BR/><BR/>December 01, 2007 11:25 AM"<BR/><BR/>You gotta luv it! ... This from someone who was hoping to profit over other people's foreclosures!Lancehttps://www.blogger.com/profile/12216089306021385355noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-52930970548241777202007-12-01T19:28:00.000-05:002007-12-01T19:28:00.000-05:00From anon's link: Deal in the Works To Freeze Rate...From anon's link:<BR/><I> Deal in the Works To Freeze Rates on Subprime Loans </I><BR/><BR/>All I can say is the law of unintended consequences. Due to the losses that will result from investing in CMBS... This will tank home prices faster than if they had left it alone. Chuckle.<BR/><BR/>Why? Its guaranteed to bankrupt most of the counties of Florida and probably the state due to their poorly invested fund. Its guaranteed to tighten up the mortgage market. Its also going to send under quite a few of the Connecticut based hedge funds... Its almost as bad as Smoot-Hawley.<BR/>http://en.wikipedia.org/wiki/Smoot-Hawley_Tariff_Act<BR/><BR/>This makes it wiser to wait and park money outside of the dollar. :( <BR/><BR/><BR/>Got popcorn?<BR/>Neilwannabuyhttps://www.blogger.com/profile/04297458705683991405noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-7655057560582686482007-12-01T14:25:00.000-05:002007-12-01T14:25:00.000-05:00I suggest that all homedebtors that take the tax p...I suggest that all homedebtors that take the tax payers bail out go to this site <BR/><A HREF="http://www.subtleconfessions.com" REL="nofollow">Subtle Confession</A>s and confess <BR/>their sin of taking our money to pay for your greed. How do you sleep at night!?Anonymousnoreply@blogger.com