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Friday, July 18, 2008
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54 comments:
Over the last couple weeks our real estate pumpers seem to have more or less disappeared.
Does anyone have a guess what they are thinking now? I mean after years of bad predictions and bad advice do you think they are being honest with themselves about their errors or are they still trying to find new ways to deny what is happening?
I knew that lance would never actually admit he was wrong but do you think he has admitted it to himself?
Back on the market with a $86,000 price bump. Will this thing ever sell? I'll tell you, I used to live a couple blocks from the house and every time I saw it, I thought that it typified how crazy buyers got at the top of the market. At least you could be at the 7-Eleven in under 10 seconds.
http://tinyurl.com/69ngee
Leroy,
They're likely gone because the financial system is a mess and we're now unequivocally headed into a recession, due to the housing slump. They can no longer deride notions of price/income ratios, price/rent ratios, or debt/income ratios. The internet is full of narcissists, and anonymity compounds the problem. But they may be back, once they move the goalposts sufficiently to argue that they predicted the current situation all along.
What bothers me about the pumpers is that they validate a market psychology that is ultimately destructive to us all. It took many suckers less than 4 years to forget the lessons of the NASDAQ bubble. I'm actually compiling a list of housing pumper articles from 2004-2006, which I'll post here. People need to be reminded, again and again, of what it's like to be in a bubble, and what kind of nonsense one should expect to hear.
leroy: I noticed that, too, but was afraid to bring it up, lest they come back. I wonder if they were all the same individual?
I wondered about that myself, especially in the case of KH and Lance, who both seemed to have very similar sorts of misconceptions about economics.
Not only that, but on several occasions lance let slip he knew more about kh than had been revealed on this board. (Such as when lance started claiming KH was a real estate investing expert back when KH was still trying to pretend to be a homeowner worried about her tax assessments.)
I think in the case of some of the older trolls like "VA_Investor" they really were different people.
I suspect terminator might also be right though, given a little while some of the more belligerent ones like lance will probably be back. He obviously has no problem lying about his own track record and predictions so there is little reason to think he would have a problem returning and claiming he was right all along.
It is just interesting to me that they all disappeared almost at once. Either the June data was finally too much to deny or maybe they really were the same person the whole time.
The search of "real estate pumpers" is conspiracy theory stuff. It's an attempt to personalize the anger, frustration. This is in every market. Pumpers are weight loss pill sellers. It's looking for someone to blame when everybody is to blame, as this blog has well documented. And to now suggest that people should start admitting that they were "wrong" (and I'm not going to suggest anyone is wrong) is a modern day purge, mob justice, and a little presumptuous. What is, is. We all read the same articles, we all see the same data, we are all seeing the same things, and right now, friends, the housing market is only one of the mega worries in this credit debacle.
And may I add, some of the people mentioned were among the sharpest posters on this list. They mixed it up kept it interesting. How dull now that everyone agrees with everything, and the out-of-line are now put in the bad category. well screw that.
Leroy, I believe Lance has eloped with Ann Page of 1495 Evans Farm Dr. in McLean, and they are living happily ever after waiting for her $2M+ buyer.
so there is little reason to think he would have a problem returning and claiming he was right all along.
He'll tell you to buy now you bitter renter! ;)
Either the June data was finally too much to deny or maybe they really were the same person the whole time. Its a common tactic on the internet. Cest la vie. Heck, its been a common tactic even before the internet.
What's the banking perception in DC right now? Out west, people are moving their money to get it under the $100k limit. (Mostly due to the $500 million+ lost at Indymac. They're requiring birth certificates and SS cards for the additional names (excluding children if the appropriate documentation was shown at account open).
FYI, the 'pumpers' will be back. We're now entering the period of greatest price declines. Maybe not now as in July, but once the kids are back in school, there goes the pressure to buy.
Got Popcorn?
Neil
I moved my money around last summer to get it under the $100k limit, and only one of the banks that passed my test is in the DC metro (United). There's at least one here that's fairly big (for the reason) that isn't in great shape.
"for the reason" = "for the region"
Yeah I was also wondering where Lance has been lately - figured he was busy out buying/scooping up investment properties, since it's a "great time to buy !!"
Moved our money around to 3 seperate banks - diversify, diversify.
Yes Neil, prices are downhill from now thru next winter. But it's still way too early to look to purchase here. Maybe in 2-3 more years...
I for one am very surprised that the “pumpers” aren’t out in full force. There’s still plenty of denial out there, especially when one points to the root cause (I believe its housing) of our current economic situation. I still have co-workers expecting housing to turn around in a few months. These are the same folks that will declare “problem solved” if/when gas hits $3.90. I expected the pumpers out and about declaring “problem solved” with the Freddie/Fannie bailout.
Sure, we all “read the same articles, we all see the same data”, but the pumpers would not/will not discuss these articles or data with any logic or reason. How could someone look at incomes, foreclosures, inventory, lenders failing, bail outs, toxic mortgages, etc..etc.. and come to the conclusion that everything is hunky-dory? I am willing to concede that each one of these things by itself is little cause for alarm, take one or two out of the equation and it’s back to everyone living in a half-a-million dollar houses. But taken as a whole, looking at the big picture, ya gotta admit, it just doesn’t smell right.
chicagotribune.com
Market stability depends on more truth-telling
Gail MarksJarvis
July 20, 2008
It's not over.
Despite midweek relief for financial stocks, Oppenheimer & Co. analyst Meredith Whitney says the financial markets won't be able to stabilize until there is more truth-telling.
Rather than trickling out write-downs and sour news, Whitney says banks need to "get real" about their "true asset values."
She thinks they are still embracing an overly cheerful outlook and valuing their mortgage-related assets too high. As a declining housing market takes its toll on their mortgages, she expects "bank stocks to head lower."
It looks like home prices could fall 33 percent from their peak if the futures market is reflecting the future correctly. The futures, based on the Case-Shiller housing index, already show home prices down 15 percent. But Whitney, who has been ahead of many of her peers in detecting financial troubles, thinks homes will fall even more than 33 percent before they bottom.
That's because a dangerous spiral is now fully in force—pulling at the strength of banks, housing, and the economy as a whole. Critical in the picture is the fact that almost a $3 trillion part of the housing funding system has all but disappeared. It's called securitization, or the process Wall Street previously used to buy mortgages from banks, bundle the loan payments into bonds and sell the bonds to investors.
The bonds were popular with investors until the housing bubble burst in 2007. Then investors discovered Wall Street had done a shoddy job—bundling together loans that couldn't be repaid. As a result, the bonds have plunged in value, and investors won't buy new ones.
Without that $3 trillion funding system available for mortgages, home buyers and banks are deprived of funds that they need. Whitney notes that the old system dwarfs what banks can do on their own. The securitization market provided close to 85 percent of U.S. mortgages over the past decade.
"Its absence means a commensurate absence of available funding," said Whitney. "Since 70 percent of U.S. homes are mortgaged, a shutdown in such a crucial part of the lending market has enormous consequences."
Vicious cycle
The consequences show up in a dangerous cycle: People who want to buy homes can't buy them because there isn't enough funding for loans. A consequent lack of demand for homes has caused home prices to fall. That has left homeowners unable to refinance unaffordable mortgages because homes are worth less than mortgages. Banks then end up with more troubled loans than even the gloomiest analysts expected, and the banks don't have money available for new loans. In a recent study by the Federal Reserve, researchers found about 60 percent of banks have cut back on some lending.
Whitney is not the only observer to realize that the loss of securitization is starving the system of necessary mortgage money and leaving banks without an exit from their problems. Last spring, Treasury Undersecretary David McCormick and Federal Deposit Insurance Corp. Chairwoman Sheila Bair said in interviews that they thought the housing market would need a healthy securitization market again so housing could recover. They thought that with time investors would buy the bonds again.
Transparency, faster data
But investors are still reluctant. The issue is so serious that the Federal Reserve sought insight into the problem at a Chicago conference on the credit crunch recently.
A panelist, Drexel University finance professor Joseph Mason, said that in the interest of repairing the housing and financial systems, it would be essential to restore the securitization system. Instead of keeping information about mortgages in bonds confidential, Wall Street would have to disclose information continually to investors so they would feel confident about buying the bonds. The industry refers to this as "transparency."
At the CDOs, Credit Derivatives and Structured Credit Products conference in New York in March, Richard Field, founder of Needham, Mass.-based TYI LLC, provided a similar antidote to the securitization problem. He explained a system that would tell investors daily how many mortgage payments were being made on time. Current information is available monthly—a sequence too slow in a market in which housing is declining so quickly.
Mason thinks Wall Street has been reluctant to adopt changes because profits would be limited in a more transparent system.
Under the urging of Treasury Secretary Henry Paulson, the American Securitization Forum unveiled recommendations last week for more disclosure in mortgage-related securities. Field said the forum simply repackaged old approaches that have not made potential investors confident. Janet Tavakoli, a Chicago structured finance expert, said the proposal was inadequate and tainted by "horrific conflicts of interest."
Meanwhile, banks are left with troubled mortgages and mortgage-related securities on their books. As they raise capital, Whitney said "it is going to plug holes" rather than fund additional lending.
Each bank has its own expectations for the housing price declines, and Whitney says they are underestimating the declines. Wachovia Bank, for example, is expecting the most modest decline—12.9 percent—while Bank of America is estimating 30 percent and Citigroup 20 percent.
http://tinyurl.com/5lbgg5
The Bigger Problem Is...
It's not just Wachovia. Banks, Whitney says, are still too optimistic about the severity of the drop in home prices. She says Wachovia, the worst of the bunch, is still operating on the assumption that home prices will drop just 12.9 percent because that's what Office of Federal Housing Enterprise Oversight data are telling them.
The problem is that almost nobody is using OFHEO numbers as a benchmark. Data from the Case-Shiller index show prices could fall by a third from peak to trough (they're off 15 percent already). Whitney says Bank of America, JPMorgan Chase, and Citigroup look as if they're expecting less severe declines as well.
The result? Investors will keep selling until the banks "get real" about the value of the assets on their books.
Meanwhile, Standard & Poor's cut its outlook for the S&P 500 Financials even after the pain of the past few weeks because "we believe additional erosion in credit quality, particularly among regional banks and thrifts, will likely continue to exert downward pressure on the sector." That translates to a 31 percent drop in operating earnings for 2008.
http://tinyurl.com/62r24y
Sorry, changing my public persona (because I'm going to talk about something very personal). But I've posted occasionally here before.
With regard to the FDIC insurance stuff (particularly with regard to Harriet's question a few days ago about who would keep over $100K in one bank, particularly IndyMac...
My wife's youngest brother has cerebral palsy. He's very high functioning on a certain level; has a bachelors, is finishing up a masters. The guy works ten times as hard as I do to move a couple of inches. But he's over thirty, and he may never be able to hold down a traditional job. Not that he doesn't try; it's just that there aren't a lot of places that would even consider him for a job, and the one place he was able to find employment was forced to terminate him after a short time. The family has set up and my wife manages a trust for him. It's nice; from my perspective, he can spend the rest of his life going to school if he wants to, and if he gets a job, great, and if he doesn't, that's okay too.
So, this is a guy with profound insecurities about...everything. The one thing we've been able to do to reassure him is to set up this trust. It's his, it's irrevocable, and he can do any damn thing he wants to with it. We've chosen a large, reputable bank. So he shouldn't have to worry at all.
Except the trust, which totals well over $100K -- as you might imagine, the idea here is put enough money in there to care for him should his medical condition worsen -- is not insured above $100K. If the big bank goes belly up, this would be catastrophic for him and for all of us who have made significant sacrifices to fund the trust. We can't split the trust up into smaller chunks and spread it around to various banks (because of the nature of this trust).
We're dithering. Is there a "safer" bank? Can we trust the self-assessments being made by the banks? (Um, no). Can we trust the evaluations made by the Fed as to the health of the banks? (Um, hell no).
So, I am guessing that at least a few of the people who really took a hit at IndyMac had a trust there. I think about my brother-in-law, and watch his struggles, and I weep for them.
With regard to the kooks who have gone away for a bit, my take is that they're all Lance, and Lance is on vacation...
OMG...Jon Stewart on the economy...
http://www.comedycentral.com/videos/index.jhtml?videoId=176740
Too funny...
Freddie Mac CEO paid almost $20M last year
Richard Syron could take home another $20 million in stock awards this year.
http://tinyurl.com/5ooxsy
Nouriel Roubini interview:
http://tinyurl.com/5rfa89
Jumbo's may be subject to the Fed's new subprime rules:
The concern is that jumbo mortgages for people with excellent credit could be treated as subprime, which was not the Fed's intention.
The definition of "jumbo" already is complicated. Last year, a jumbo loan was a mortgage for more than $417,000. Now that upper limit has been raised, temporarily, in some markets. In the most expensive places, such as Los Angeles, a jumbo loan is a mortgage for more than $729,750.
Last August, the secondary market for jumbo mortgages melted down when investors suddenly realized that they hadn't understood the risks inherent in the jumbo loans they owned.
. . . .
The Fed will use Freddie Mac's weekly mortgage rate survey as a benchmark. Any first-lien mortgage rate that exceeds the comparable Freddie Mac rate by more than 1.5 percentage points would be deemed higher cost. By that standard, many jumbo loans would be higher cost.
According to the Fed, higher cost = subprime
http://tinyurl.com/5wukzy
The Chicago Trib story would have interesting maybe three years ago. Which probably explains why "pumpers" are still important here.
Correct me I'm wrong:
-- Anyone who raised counter arguments on where prices might go was beaten off this list in attacks that have included insulting elements.
-- If anyone dares entertain a counter theory, they're hit with dogma about that "it's all about fundamentals," which only works to kill nuanced discussions.
-- The endless search for the bad guy(s) or just somebody to blame.
Don't misread me here, if anyone is still reading. The economy is going from bad to worse. Check. Housing prices will continue to decline. Check. We're only in the beginning stages of the credit bubble fallout as credit cards, car loads, etc. are increasingly defaulted on. Check.
But what I'm saying is: If someone wants to have nuanced discussion on this list about finer points, say what might happen in a particular neighborhood, or the impact of gas prices, etc., they are likely to be hit with dogma, possibly insulted (even if they aren't posting anymore), and people seem to go out the way to shut the discussion down. That's my point.
I think the discussion on this list can be, at times, remarkably intelligent and insightful. It's obvious that many people worked at crafting their posts.
But in my mind, to belittle people who aren't now posting is simply bad form.
The people I was referring to did nothing to contribute to the discussion here. I have had some nice discussions with people both more and less bullish/bearish than I am on this board, but the people I referred to earlier as "real estate pumpers" had zero interest whatsoever in a discussion in any normal sense.
Rather than try to better understand what is taking place they were here to promote their agenda even to the point of giving people simply terrible advice or trying to guilt/insult/prod them into buying.
Focusing on lance for a moment, by the end he was lying almost continually and was unwilling to aknowledge even his most obvious mistakes. (such as his "90% of the area is stagnant or climbing" claim or the various times he has announced that "the bottom has passed" over the last couple years.)
Sorry, but if you aren't even enough of an adult to admit when you are wrong even when it is obvious to everyone involved then you shouldn't expect anyone to miss you when you finally do run off.
Lance spent the last two years telling "bitter renters" how they were going to be priced out forever, how they weren't adults or "real citizens" until they bought, or how anyone that didn't "find a way" to buy was just a loser and not cut out for DC.
So yeah, I think it is amusing that he appears to have finally just disappeared without a word.
kob said...
“But what I'm saying is: If someone wants to have nuanced discussion on this list about finer points, say what might happen in a particular neighborhood, or the impact of gas prices, etc., they are likely to be hit with dogma, possibly insulted (even if they aren't posting anymore), and people seem to go out the way to shut the discussion down. That's my point.
I think the discussion on this list can be, at times, remarkably intelligent and insightful. It's obvious that many people worked at crafting their posts.
But in my mind, to belittle people who aren't now posting is simply bad form.”
Sure kob, lets discuss the reason bank/lender stock goes up when they post a billion+ loss. Lets talk about banks “getting real" about their "true asset values" and how many more billions will be/might be lost.
Lets talk about foreclosures, inventory, days on market, the number of toxic mortgages issued and other market research.
Alas, we can never get that far without one of the “pumpers” declaring that these are not market fundamentals and mean “Absolutely nothing”.
I have challenged one of these pumpers many times. I cringe to think that someone new to the blogs may take one of their posts as gospel if no one questioned them. Even more, some of the rants these pumpers go on about is actually good fodder for the newcomers. You can be assured that if you’ve heard a long winded diatribe from one of these pumpers, you can bet that when you go to an open house you’ll hear the same from a realtor.
I have learned quite a few things here on the blogs. Some things that just a few years ago would blow my mind. At this point, anything going on that might be deceptive by anything/anyone in the REI does not surprise me.
Two things I would like to have happen:
I’ve noticed that there are few, very few, folks in the REI that will talk openly about shady real estate practices. I find it laughable that some in the REI easily get “offened” when lumped in with the bad apples. These folks need to open the curtain, show the public how things are manipulated and help clean up the industry. I think the REI would be better for it and those do-gooders would receive more business than they could shake a stick at.
The lack of, or easy to access data is appalling. In just about every other industry, the books are open. When you go to make a purchase, you can do just a little research and make a pretty informed decision. Sure, some corporations cook the books, but in time, many get caught and are dealt with accordingly (especially if reported/investigated by the MSM). It boggles my mind how the REI openly cooks the books, the MSM reports it, and everyone goes on their merry way as if nothing happened. If the REI is to be treated like a “real” industry, for starters, they need an open, full access (read only) MLS. Thank you franklymls.com for some sort of useable MLS search engine.
To me the most telling thing about the real estate industry is the way it accepts lying as a standard business practice.
How many times have we seen houses relisted in an attempt to make them look like new listings? You go to one real estate site after another and see houses you know have been on the market for a year or more with "days on the market" showing "10."
There is no other reason to do this besides attempting to deceive potential buyers, but it is a standard business practice for large numbers of realtors. (I can only guess but we aren't talking about a few "bad apples.")
Why is this sort of behavior accepted?
I can't count the number of times I have gone to an open house over the last couple years and been told how "the market has really been picking up lately," or how "prices are starting to pick up again" or any of the other standard lines.
Being a salesman is one thing, being a liar is another.
There is a casual disregard for the customer's interests that is stunning to me. Everyone involved wants to see a sale.
Fake,
Have you asked the bank to look at CDARS (certificate of deposit account registry service)? The depositer place the funds in one bank, which farms the money out to various other banks so you get the FDIC insurance for the whole amount (they keep the amount at any one bank at under $100,000). You will probably pay an interest rate penalty since you can't shop for the highest rate, but it will give full FDIC protection on CDs (since it's a long term trust, I'm assuming most of the money does not have to be liquid so it can be in CDs).
See http://www.cdars.com/index.php. You can find which local banks are participating.
The Fed will use Freddie Mac's weekly mortgage rate survey as a benchmark. Any first-lien mortgage rate that exceeds the comparable Freddie Mac rate by more than 1.5 percentage points would be deemed higher cost. By that standard, many jumbo loans would be higher cost.
According to the Fed, higher cost = subprime
ROTFL Actually, for many of those Jumbos, they were, in effect, subprime. I'm certain with 25%+ down, they could get an excellent rate. I happen to agree with the economists who say the $800k to $4.5M range will be the hardest hit.
The lack of, or easy to access data is appalling. In just about every other industry, the books are open.
Excellent point Robert. Put the data out there. If any other business sped up data release in good times and slowed it during the bad times, they would get a knock on the door!
I wonder how many years of taunts, 'bitter renter', 'Adults own,' etc. comments we bears have gone through? We've developed a thick skin. Was that the REIC's intention?
Sales data should be computerized and available within minutes of a sale closing. If the funds do not transfer than the sale didn't happen then. I know too many people where if their properties drop another 20% they're ruined. 30+ years of work, investing, and growth would be gone. How the heck could this have been policy? Oh well... it was.
I see August is the last strong sales month of the year for the DC area. Its going to be interesting to see how people spin things through the winter.
Got Popcorn?
Neil
Thanks very much keithk. I will pass that along to my wife.
Fake,
Thanks for that story.
Just to clear up something very minor, the blog post here called "Diversify" was intended to question the wisdom of putting your entire retirement hopes into your company's stock, i.e. Fannie Mae or Worldcom.
Banks are a little different in that they concern a larger group. Some think that the $100K limit is far too low.
On another note, on a whim I stopped by an open house today. It was owned by a high-level but laid-off construction executive for a big builder (who now needs to move to get a new job). It was nice, but priced overboard -- the most expensive in the neighborhood.
In some respects, I almost (note almost) feel sorry for the lances of the world. My goodness, talk about looking down the barrel of a gun right now. Your house is deflating at 12-15% YOY, you still have a massive mortgage, it will most likely reset in the next 2-3 years if it's an Neg/Op/Arm, or as in lances case ~6 years. Inflation in everyday goods is ramping up 5% now-with the PPI (what's coming down the road) at 10%+. You can't sell without massive losses, you can't keep the mortgage for too much longer, the economy is going in the toilet so your job is or will be at risk. If you have a job wages aren't going up. It would be quite heart wrenching if it weren't for a couple of factors.
#1) The smug, egotistical, I have a house that went up xxx%, holier than thou BS.
#2) Advising anyone who didn't get into debt up to their eyeballs that you will be priced out forever.
#3) B/c of their greed (along with bankers, fed, etc) we have got some really hard times coming.
I am reminded of the fable of the grasshopper and the ants. The grasshopper derided the ants for working so hard to store for the winter while he played the fiddle. Winter came and he was the one starving.
If you bought or took out a mortgage more than 2-3x your income, in my book you get everything coming to you. That's the school of hard knocks and life's lessons coming full force.
Before you say I'm a cruel SOB, I donate at least 10% to charity . . . but charity doesn't mean you get to live in my place for free or at the taxpayers expense.
Watched this house as a regular sale, then a short sale, now bank-owned:
12003 SNAPSHOT Ct
NOKESVILLE, VA 20181
Price: $407,900
PW6806449
Mar 31, 2005 $476,670
Jul 11, 2005 $720,000
Jul 07, 2008 $459,000
So someone made HOW much money after owning it for three months?
And now the bank is swallowing HOW much of a loss?
It's on a really strange culdesac and backs to a huge shopping center and major road. But it's almost 6,000 sqft.
Kob-- I am one of the people that took a lot of abuse a few years ago from Lance and others on David's blog. I pretty much gave up after one psycho suggested that 'bubbleheads' children should be raped and murdered. (No, I am NOT joking!) Like Robert, I did my best to remain polite and level-headed and stick to the facts-- but the boosters ignored it all in favor of fear-mongering, smugness and condescension. Among the tamer comments made to me were that I was crazy not to have bought again immediately after selling in 2005, that I would never be able to buy again, and that being 'working class' (my husband's in construction) I couldn't really expect to be able to be able to own a house anyway.
I'm very grateful to Harriet for being able to maintain a blog where the boosters were balanced by many other, saner elements-- including some who agreed with Lance in many respects, but were able to defend their positions with facts rather than fear.
I'm also grateful to Leroy for quoting Lance's previous comments whenever he attempted to rewrite history and to Robert and many others who carried on long after I'd tossed in the towel.
The site told me to retype this - so sorry if this is a dupe.
Leroy and Sarah, well-said.
Harriet mentioned an overpriced open house she attended. Me too. Owner has crossed over from dreams to delusions. Bought the 70s house in late 2000 for < Arl. Co. assessed value. The ONLY way people were doing that at that time was if the house was an unpopular style (this is) and/or it had less than the average updates/poor condition (this apparently was). He now wants $300K MORE than Arl. Co. 2008 assessed value, despite not a SINGLE advertised update since he bought it in his entire glossy brochure or MLS listing, although it appeared to me he may have replaced one HVAC unit. The whole house appeared tired, worn, and out of date, unlike nearly all of those in his comparable price category. Original kitchen and windows, hardwood floors a mess, original or 80s updated baths, neglected landscaping, etc.
The agent looked bored silly, as there were few visitors at the open house when I was there and before per the sign-in sheet. Maybe she (or whoever has the listing) should have checked out comparables AND read this and other websites before agreeing to list it at this price.
Leroy said:
"I knew that lance would never actually admit he was wrong but do you think he has admitted it to himself?"
Leroy, everything I predicted has occured, and I am sitting prettier than ever because I've positioned myself to benefit from these occurances ... and you haven't.
It's harder than ever to get financing now. I already have financing.
Interest rates have gone up. But I have a very low fixed rate that will remain at that low fixed rate for 27 more years.
Inflation is hitting hard, real hard. But again, my interest expense is one that won't be going up. It'll stay at that 5% till year 30 ... even if inflation pushes up new mortgage rates to the double digits like it did the last time around we went through this normal cycle.
I'm in my home ... have been for 3 years now. You're still waiting.
Now, who is the one fooling themselves?
Leroy said:
Not only that, but on several occasions lance let slip he knew more about kh than had been revealed on this board. (Such as when lance started claiming KH was a real estate investing expert back when KH was still trying to pretend to be a homeowner worried about her tax assessments.)
I didn't let anything "slip". It just was clear to me (but obviously not to you) that KH had to be a reincarnation of Va_Investor. No, it wasn't that KH agreed with what Va_Investor said ... afterall KH agreed with me ... as did anyone with a grain of sense. It was that KH used the same examples in their arguments as did Va_Investor. There were even a couple of times when those examples were just about verbatim. Additionally, I'd once kinda accidentally come across a posting from Va_Investor where they'd also posted their name ... and the initials were KH ... so, even if some of the givens (such as where the 2 lived) didn't match, I think it was clear that they were still the same poster. Of course, that took some deduction which you've sworn up and down that I don't have ...
And yes, KOB is right. This blog is looking a little tired with all the backslapping and signing to the choir that's going on. But frankly, I really don't want to be wasting much more time on it. What I said was going to happen, happened. And it's too late for anyone to benefit from my advice now.
*singing to the choir
Lance said...
It's harder than ever to get financing now.
Interesting point Lance. Will this help increase or decrease the number of potential buyers?
"everything I predicted has occured"
lol,
Lay off the delusion pills lance, I don't know what else to tell you.
Do you honestly believe we do anything but laugh to ourselves when you make statements like the above?
(I do wonder what the heck you are thinking when you make claims like that.)
We were all here when you claimed the bottom had already passed last year. We were all here the numerous times you claimed there wasn't even a bubble, or that prices wouldn't fall "close in."
Shoot, you STILL haven't proven enough of an adult to admit you were wrong to say that "90%" of the area is stagnant or climbing.
You are the poster child for cluelessness on these blogs lance. You aren't about to rewrite your history so you might as well just run along.
As for KH being VA_Investor... if true that is just pathetic. VA_Investor loved to try to pretend to be this brilliant investor but continually made a fool of herself by not even understanding the most basic principals of the market.
So she cooks up a new name and returns to try to pretend to be some concerned homeowner worried about their tax assessment rising?
I hope for KH's sake that isn't true.
Leroy,
The bottom, and your best opportunities for buying a home, passed you by at least a year ago, if not prior. Anything worth buying will now cost you more. Much more. Especially when you factor in the price of gas for getting to some of these places with lower nominal sales prices way out yonder ... And that's not even factoring in the increased costs due to more expensive --- and difficult to obtain --- financing.
But of course, you already know that ... And that is why you continue to post. It makes you feel better to backslap others deluding themselves similarly that there's still the hope of better bottom-line bargains coming their way. There aren't. They're getting fewer and farther between. And by the time you get back from you convient exile, the situation should be really interesting. Good luck.
Lance said...
It's harder than ever to get financing now.
Interesting point Lance. Will this help increase or decrease the number of potential buyers?
"The bottom, and your best opportunities for buying a home, passed you by at least a year ago, if not prior. Anything worth buying will now cost you more. Much more. Especially when you factor in the price of gas for getting to some of these places with lower nominal sales prices way out yonder ... And that's not even factoring in the increased costs due to more expensive --- and difficult to obtain --- financing."
Oooh, SCARY!
Watch me run out and buy as fast as I can...
lol
You really don't get it do you?
You seem to think you are somehow being clever but to anyone with a clue you are just making a joke of yourself.
You are the intellectual equivalent of a tone deaf singer.
You seem to be convinced you are on key, but the rest of the world finds your act... painful to experience... and you don't even appear capable of understanding why.
... at least this post of yours is a fitting send off, right to the end you would rather make up gibberish and vague threats...
...even as you run away in aknowledgement of the fact that you can no longer even pretend to be anything but utterly discredited.
"Interesting point Lance. Will this help increase or decrease the number of potential buyers?"
I think it is funny that he keeps bringing up rising interest rates as if they were some kind of boogyman. I guess to a credit junky like lance it must be a pretty scary thought, but to someone who actually plans to save before buying, and to pay off what they borrow... rising interest rates are nothing to fear.
Besides, we have all predicted a return to more normal lending standards. If I had a magic button I could push to bring on 8% interest rates and 20% down payments across the country I would push it without a moment's hesitation.
i don't necessary agree with lance and the tone in his posts, but i do worry about obtaining a loan - if 20% down becomes mandatory across the board, then i will not be able to buy for a long time.
Leroy said...
Besides, we have all predicted a return to more normal lending standards. If I had a magic button I could push to bring on 8% interest rates and 20% down payments across the country I would push it without a moment's hesitation.
For real. Ohoooooo, 8% AND a down payment? What’s next, documentation of income?
MM said...
i don't necessary agree with lance and the tone in his posts, but i do worry about obtaining a loan - if 20% down becomes mandatory across the board, then i will not be able to buy for a long time.
Interesting Lance. Will this help increase or decrease the number of potential buyers?
>MM said...
i don't necessary agree with lance and the tone in his posts, but i do worry about obtaining a loan - if 20% down becomes mandatory across the board, then i will not be able to buy for a long time.
Interesting Lance. Will this help increase or decrease the number of potential buyers?<
In the late 1980s, there was a bubble of sorts in housing prices even though a good interest rate was at 9%. So I do think it's an interesting question that probably has a pretty complicated answer to it.
I tell you lance is the contrary indicator. When he is long gone from this place . . . that will be the time to buy. I was starting to get worried recently. He hadn't been around for a while and I was slightly worried that now might be the time to buy.
But nope, he showed up to brighten my day and let me know that the bottom is still out there.
Bull markets crash when the perma-bears decide to go in and likewise bear markets end when the perma-bulls decide it truly is a bear market.
mm,
I hate to say it but there is a very good reason why for decades banks required 20% down . . . to prevent the crap we are going through right now!
You've got 4 options:
1) Save like a miser for your 20%
2) Don't save and hope prices come down enough to help you out.
3) Save for 20% AND have prices come down.
3) Move out of the area.
And I hate to be cruel, but if you can't save 20% for a downpayment . . . YOU HAVE NO BUSINESS BUYING!!!
Not being able to save 20% means one or both of the following.
1) You don't have the financial disciple to save 20%.
2) You don't have the financial wherewithal to save 20%.
Regardless, it means one thing. You are at a MUCH, MUCH greater risk of going into foreclosure should bad things happen.
(hmm, sound familiar to what is happening today).
Think of it this way, if you are not able to buy b/c you don't have 20%, you are actually SAVING yourself in the future from your own mistakes.
lance,
Before you get too coy about your "locked in rates", let us refresh one item: YOU HAVE A 10/30 INTEREST ONLY LOAN. So you've got 7 years until your loan resets (not rate wise-but amortizing). In other words in 7 years you will have to pay back the FULL AMOUNT of your loan in 20 years. Oh and since your aren't paying principle your payments are more like rent to the bank.
You better hope and pray we get some wage inflation.
And before anyone says you can't have inflation without wage inflation . .. . let me clue you in on something, YES YOU CAN. It's called a reduction in the standard of living!
>I hate to say it but there is a very good reason why for decades banks required 20% down . . . to prevent the crap we are going through right now!<
Banks did not require for decades that a buyer have 20%. I bought my first home in the late 1980s with 10%.
Moreover, I really find it odd that so many people seem to be preaching 20% down payment.
I am so glad that there are people on this list that can put together 20% on their own, especially single people. But I don't think most people can come up with that amount of cash and still cover closing, moving and fix-up cost, and have three-to-six months cash reserve.
There is a trend of increasing numbers of people taking loans out of their 401k to help come up with the cash. The downside of this strategy is clear. But that's what people are doing.
I don't think forcing all buyers to come up with 20% fixes the housing market. There is a laundry list of bad policy that contributed to this. Requiring 20% from everyone is a blunt force tool. There is more than one way to address the problem.
kob said...
>MM said...
i don't necessary agree with lance and the tone in his posts, but i do worry about obtaining a loan - if 20% down becomes mandatory across the board, then i will not be able to buy for a long time.
Interesting Lance. Will this help increase or decrease the number of potential buyers?<
In the late 1980s, there was a bubble of sorts in housing prices even though a good interest rate was at 9%. So I do think it's an interesting question that probably has a pretty complicated answer to it.
I think MM was speaking to tighter lending standards, not interest rates. If so, I don’t think the answer is complicated.
kob said...
>I hate to say it but there is a very good reason why for decades banks required 20% down . . . to prevent the crap we are going through right now!<
Banks did not require for decades that a buyer have 20%. I bought my first home in the late 1980s with 10%.
Moreover, I really find it odd that so many people seem to be preaching 20% down payment.
You may have noticed, a few billion dollars have been lost in the mortgage industry. Is 20% down a guarantee? No. Is it possible the lenders may overshoot down payment requirements? Possible.
Call it 5%, 10%, 20%, heck, just call it a down payment. The industry has gone from “does he have a pulse”, to “the buyer has got to have some skin in the game”. Big difference.
"gte811i said...
You've got 4 options:
1) Save like a miser for your 20%
2) Don't save and hope prices come down enough to help you out.
3) Save for 20% AND have prices come down.
3) Move out of the area."
yes, move out of the area is the way to go for me should that happen.
Lance:
It's harder ... to get financing now. ...
Interest rates have gone up. ...
Inflation is hitting hard,...
I'm in my home ...
You left out:
Builders have given up building.
Spec homes are drying up.
Gas prices are compressing cities inward.
The McMansion, exurban lifestyle is energy hungry.
Governments are broke, can't maintain the distant infrastructure, schools, services, roads.
People are still making more people.
Everything Lance said has come true.
Yeah yeah yeah... we get it... you have reached the point where all you can do is insist you weren't wrong no matter how ridiculous it makes you look.
I guess it is that or grow up...
Hey Robert, just stumbled upon your post.
Thanks for your comment on my site.
I am launching a new feature where I will keep track of the PREVIOUS listing's price history. No more relistings that restart the DOMM and reset the "Original price"
Frank
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