U.S. housing prices will plummet another 10% -20% within 60 days

reply to post by burdman30ott6


Burdman30ott6, I agree almost 100% with you. I'm lucky enough to live in an area where values didn't start overheating until the very end of the bubble. I believe that I'm in pretty good shape personally even if I take a 30% hit to value.

I think Texas will be alright due to how hard it was hit in the S&L crisis two decades ago it didn't quite get crazy there, and with the concentration of the Oil Complex there might even not notice. California, Florida, Nevada, Arizona, and some other places are downright screwed though.

If I weren't in a home I'd be saving now for one I really like in a couple of years. I really don't blame someone for walking away right now if upside down in an adjustable or pay option .

Banks are in a "wait and see" mode.

The banks want to see what happens when the alt-a adjusts and how much the economy will affect the guys with the prime mortgages. Currently they are trying to rake in as much from the good loans as possible so they will have something for round 2 of the housing mortgage crisis. Additionally, it is becoming more difficult for banks to bundle up these mortgages and sell them off to pensions or foreign entities.

The problem is that when banks don't lend, the whole market stops. There are willing and able home buyers out there but whats the use if banks do not want to or cannot lend to them?

I think it is time to hold our breath for the alt-a adjustments. Depending on how that goes, we can be seeing our way out of the crisis or we can be seeing a huge financial shock and an extreme economic deflation. I am not hopeful.

Originally posted by burdman30ott6
... more and more people will decide to just walk away as they see that they still owe their mortgage company $250,000 on a house that is now market valued at $200,000.

Only a damn fool would continue to subject themselves to that type of nonsensible "investment." So forclosures will continue until the market stabilizes and home values begin to rise again.

I think that is part of the reason that they are predicting 5.5 million more foreclosures within the next 18 months.

Originally posted by wutone
The problem is that when banks don't lend, the whole market stops.

25% - 33% of the economy in Arizona comes from building, selling or renovating residential and commercial buildings.

What do you think is happening here?

A good amount of the 1st round of real estate investors have already walked away and the rest are thinking about it I'm sure.


[edit on 22-8-2008 by In nothing we trust]

Well I'm in one of those "hard hit areas" outside D.C. in a city called Manassas Park. Illegal aliens decided this would be a good place to live and came in by the thousands during the boom converting the town into a trashed out flop den for all their buddies with the support of the local city govt. Values are down 40-50% so far and still dropping as all the construction and landscaping jobs dried up and the Hispanics are just moving away and abandoning their homes in the middle of the night. You wake up one morning and you notice a house is empty that had people in it the day before. Gangs are rampant in the area and trash is everywhere. We got hit hard. The city still values the homes at 2006 levels for taxes though and I told them next year I don't pay if the values aren't adjusted to reality, and if they even think about raising the tax rate then I will put on a big show at the council meeting and toss the council the keys to my home. We already pay the highest real estate tax of any other municipality in Virginia and for what? The pleasure of being a sanctuary city for illegal aliens and having more foreclosures per block than any other place in the state. Nuts to that. Things do seem to be getting a little better though as I don't just see Hispanics moving in now, which in this particular area almost always means illegal aliens or supporters of illegal aliens. Blacks, Whites and a trickle of Asians ARE buying homes again here since the prices have gotten so much lower than the surrounding areas, but I am seeing a lot of investors buy these cheap homes and then rent them out to bad element with 10 to a home that cause a lot of neighborhood disturbances.

I am on the rules committee for my association and we are about to start a widespread and sweeping enforcement routine here to weed out the offenders of any rules. Got a POS house that you aren't upkeeping and are ignoring our letters? Your car gets towed if it is anywhere in the community. Behind on your condo dues? Car gets towed. I plan on vigorously enforcing the rules starting Sept. 1. If I see so much as a torn blind in a window then they get a letter to repair within 2 weeks or they get fined and if they don't pay then they get towed. Growing a set of claws is the only way to deal with troublemakers in your neighborhood if you have an association.

Nobody else will even run in the election this November to replace these clowns because things are so bad now thanks to their incompetence and corruption. I was going to run for council myself but honestly I just don't want my name associated with this mess when this city loses its charter viability next year when they can no longer massively inflate the assessments without open citizen revolt. I will most likely walk away this time next year if things get as worse as I think they will. Some times I kinda think that being laid off would be the best thing for me since I would get unemployment, would be able to get paid for each year of service, collect all my vacation and sick leave and all of my retirement in one huge check and then live scot-free for 6-12 months in this place after I stopped making payments but then not having a job in this economy is a scary thought and moving in with my Dad at my age is a thought worse than death.

The U.S. government was involved in creating the mortgage mess as early as 2001

How many of these deals are there?

A handful of people, in key positions, can create Chaos Out Of Order.

CHAO AB ORDO

Wall Street Journal - July 21, 2008

It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court.

The unusual situation, which is still bedeviling bank regulators, stems from the 2001 seizure by federal officials of Superior Bank FSB.

... a separate portfolio of Superior subprime loans that the FDIC sold to Bank of America Corp ... has been troubled. As of April, investors had suffered "realized losses" ... after foreclosures on 511 of the 3,964 loans ... The vast majority of the loans were originated when the FDIC was running the bank, the data show.

www.dailyherald.com...

[edit on 24-8-2008 by In nothing we trust]