More Homeowners Upside Down

As housing prices continue to fall in the Washington area, recent home buyers who wish to sell often find themselves 'upside down' on their mortgage. Via the Washington Post:

Jeffrey Taylor and his wife bought their dream home in Purcellville for $538,000 last August. Now they have to sell it because they are getting divorced and neither one can afford the mortgage alone.

The most they could get for it was $430,000. After paying all the real estate commissions and taxes, they will still owe the bank $118,000.

"Five months later, I lose $100,000," Taylor, a high school teacher, said. "I don't think I can take $100,000 into the stock market and lose it faster."

Their dream home quickly became a nightmare. They found themselves significantly upside down on their home. In Loudoun county prices have fallen farther then other DC area locations as it is a far outer suburb. These far outer suburbs (exurban) locations are will continue to be hit particular hard by the declining housing market. Just watch Queen Creek, Arizona.

For Sale Signs in Dupont Circle

For Sale Signs in Dupont Circle (1600 block of 16th Street NW)

Excerpt from Lereah's Book March 2005

" I believe that in years to come historians will see the beginning of the twenty-first century as the "golden age" of real estate. And I want to persuade you to take advantage of this historic opportunity. "

["Are You Missing the Real Estate Boom? Why Home Values and Other Real Estate Investments will Climb Through the End of the Decade-And How To Profit From Them" March 2005, p4]

Rowhouse in Washington, DC

Rowhouse in Washington, DC

NAR Advocates Affordable Housing... HaHa!

The National Association of Realtors is advocating for affordable housing solutions:

"Is the first choice for consumers buying a home, Realtors® are in a unique position to advocate for effective solutions to today’s housing needs. By participating in Housing America 2007, Realtors® are strengthening their commitment to building communities by working to solve the critical issues associated with housing affordability.”"

This is laughable. The National Association of Realtors was cheering the housing boom and higher prices during 2001 - 2006 period.

Buyer Won't Settle at Crescent Condo In Downtown Silver Spring

Buyer won't settle at Crescent Condo In downtown Silver Spring. Check out this posting on Craigslist:

Can someone pls recommend a real estate atty. The Crescent Condo in Silver Spring people are telling me that I'm in breach of contract because I didn't go to settlement. But the reason I didn't go to settlement is because their own people told me not to when the appraisal came in 60k under the contract price. They lied. I need help to terminate contract and get deposit back. Can anyone help?

Maybe Lance will buy this condo?

Bubble Sphere Roundup

The Mortgage Lender Implode-O-Meter is now up to 50. The subprime mortgage market continues to decline. Will it spread up the chain to the Alt-A level? Yes Sir!

Las Vegas ain't hot anymore. Pick your poison: houses or at the casino? Housing Doom reporting on declining home values there.

The Baltimore Housing Blog has been hacked. Their new site is here. Great blog, keep up the excellent work. :-)

Patrick advocates against a subprime bailout. He asks "Why should everyone who was responsible and did not borrow too much for a house be asked to bail out the gamblers who did?"

David Lereah's New Book is Released

David Lereah has done it again. He has written yet another book titled 'All Real Estate is Local: Why Understanding the Housing Trends in Your Area Is Essential to Building Wealth.' The book was just released on April 3rd, 2007. It should have been released two days earlier.




From the Publisher:

Book Description

When real estate booms nationally, there are hundreds of cities and regions that lag behind. Similarly, when the market slows or flattens, countless states and neighborhoods begin to boom. As Lereah makes clear, the most important factor in buying or selling a home is the local market conditions. Lereah shows readers how to:

• Evaluate the values of homes in one's own town or county
• Determine whether property values in your targeted neighborhood are on the rise
• Assess the market conditions in locations when buying a vacation or second home
• Learn how to identify markets that are overvalued or fully valued, and those that promise to appreciate more quickly in the future
• Understand the local economic developments that can affect oneÂ’s investment in the future

There are countless books offering advice on making money in real estate. This is the first one to explain why knowing the ins and outs of your local region is essential to deciding when, and where, to buy.

-------------------------------

Mr. Lereah tells half truths and manipulates facts and figures. He cannot be trusted as he is a paid shill. Don't buy his book. Figure out ways to mock his book!

Inventory in Northern Virginia Increasing

The number of available listings in Northern Virginia has increased 13.4% in the past month, from 13,081 on March 3rd to 14,837 as of April 3rd. (Source: VirginiaMLS.com)

Subprime Mortgage Meltdown

The subprime mortagge market is in meltdown mode. Today, New Century, who in 2Q 2006 was the third largest subprime lender file for bankrupcty. Responding to the subprime mess, David Lereah declared "It's problematic, but not catastrophic." Bloomberg reported:

Sales of bonds backed by subprime mortgages are tumbling as investors and bankers, concerned about rising delinquency rates, pull back from what had been one of Wall Street's fastest growing businesses.

About $79.3 billion of securities backed mainly by loans to people with poor credit or high amounts of debt were issued this year, down 37 percent from $125 billion in the same period last year, according to a March 30 Citigroup Inc. report.

The subprime meltdown is already being felt across the nation. Once the spring / summer buying season has flopped, and we head into fall, the market will undergo a sharper decline.

P.S. The national foreclosure rate is about to increase dramatically as a big wave of ARMs reset and the economy falters.