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

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

www.scrippsnews.com

... a new government ban will terminate virtually all seller-funded down payment assistance programs in the United States.

Oct. 1 is the last day when homebuyers will be able to use seller-funded down payment assistance with any mortgage backed by the FHA.

The ban is part of the Housing and Economic Recovery Act of 2008, which President Bush signed into law July 30.

more than 33 percent of loans backed by the agency last year included such assistance, according to FHA data

(visit the link for the full news article)

Over 100,000 people a year, since 1999, have utililized the down payment assistance programs. Essentially this will remove 100,000 buyers from the real estate marketplace effctive almost immediatly.

Less buyers in a market already flooded with inventory means that we are about to see some dramatic price declines in American real estate.

Just in time for the election it appears.

www.scrippsnews.com
(visit the link for the full news article)

[edit on 21-8-2008 by In nothing we trust]

It's nice to see prices adjusting for the better, for people on the sidelines waiting this out. I can't wait until houses around the Boston area to see prices pre1998. I'm also curious to see when the Tax Assessors will adjust the rate per thousand, houses aren't worth the value they once were.

Originally posted by Prometheus3
I'm also curious to see when the Tax Assessors will adjust the rate per thousand, houses aren't worth the value they once were.

Just replace the roof, pay the property taxes and the HOA fines for weeds and you could be the proud owner of an overpriced depreciating asset.

More bank failures and higher unemployment figures are on the way.

[edit on 21-8-2008 by In nothing we trust]

Just replace the roof, pay the property taxes and the HOA fines for weeds and you could be the proud owner of an overpriced depreciating asset.

That's funny you write that, my parents live in Central Florida and they were almost fined for not having a tree on their front lawn, After replacing that same tree three times from nasty storms ! lol.... And their taxes keep on going up and the value is still going down...

"Welcome To America"

Here is the truth about owning a home and the effect of devaluation.


The value of a house is what a house is worth. I am not talking about N dollars. I am talking about the utility of the property and it's human worth.
Consider value to mean the derivable benefit of house.

I am saying that the house is worth the exact same value in the variable N dollars as it ever was.

The variable N dollars applicable to the value of your home fluctuates. But always equals House. 500,000 = house or 250,000 = house next month.
House = House always, and the value of the house is constant, not factoring in depreciation.

The money changes, not the house.

And for that matter the dollar devalues, so the debt actually becomes smaller. So there is no better time to own. You will pay that mortgage off with highly devaluated dollars. Just as long as you do not loose the property.

Why do you think McCain owns so many propertys now?

[edit on 21-8-2008 by Cyberbian]

Sweet!!! Ive been in an apartment for the longest time (10 years) and im single and make nice bucks (about 90K per year-in the south) so it sounds like it really is a buyers market right now. I think im finally going to buy!!!

Good .. Its about damn time housing prices reflected reality. For most Americans buying a house just isn't practical because they cost too damn much.

LoL. Im just glad my Mom Sold the Ranch a few years ago at the height of this artificial housing market boom. In todays market she wouldn't be able to get 1/2 what she got 5 years ago.

To be honest i have little sympathy for people who will loose their homes.
If they were stupid enough to put themselves in the situation they are in it is their fault.

Granted..... A lot of these people were preyed upon by predatory lenders, It still doesn't excuse them though from their responsibility.

What it comes down to is this... If you don't have the money DON'T BUY IT !

Too many people in this country act like credit is a great thing etc.... Credit is for idiots.

princeofpeace Wait for about another year and 1/2 or so. At that time prices will have dropped a lot further.

And also.. Right now . You can do some research online and find houses for under 100k.. Hell i have seen some for under 50k. Sure they are no mansions. But they are houses and livable.


I have never owned a Credit card.. I own my own place free and clear and i am only 32..... If i can do it anyone can. Credit is for Suckers.



[edit on 21-8-2008 by wolfmanjack]

Yes, I would wait at least 2-4 years before I would buy anything. People need to also realize, the value of your home should be worth no more than the annual household income for that area. However, there are areas of desire, for that is what it's worth to you..

Originally posted by Cyberbian
You will pay that mortgage off with highly devaluated dollars. Just as long as you do not loose the property.

Well thats just it isn't it. Cashflow is king.

Housing values drop



Gold goes up.

Why do you think McCain owns so many propertys now?

Maybe the question that the press should be asking McCain, is 'how much gold does he own'

Originally posted by Prometheus3
People need to also realize, the value of your home should be worth no more than the annual household income for that area.

I would say the amount of your mortgage (Not your home) should be no more than the annual household income for that area. If you lose equity but don't have to pay on it then you only lost pretend value anyways.

If you lose the ability to pay for your mortgage then you lose your house.

[edit on 21-8-2008 by In nothing we trust]

I'm not in disagreement with most of the posts on this thread, but isn't 3xs annual income the historical,sustainable norm?

Sure if you can pay cash for a house then do it, but if you can't a reasonable property, with a reasonable rate is sustainable and you might even get some appreciation when things revert to the norm.

If I had followed innothingwetrust's wisdom proposed in thisthread about health insurance, I'd currently be in about $250,000 in medical debt as opposed to around $2000.


[edit on 21-8-2008 by jefwane]

[edit on 21-8-2008 by jefwane]

Just another example of why America is now a communist country. Congress desires to regulate every possible economic activity. They assume that a bunch of corrupt lawyers in congress know best how to run our own affairs.

This type of centralized economy is what sent the soviet union into bankruptcy. Leave it to the psychotic leftists to try to repeat the same mistake over and over again, thinking this time we'll get socialism done right.

yes it's 3x times the annual income. I just came back to fix it, but you beat me too it. Thanks for the assist!

To tell you the truth and this is just my opinion, I feel the market will turn around when emotions turn around. To many people are on the sidelines, to many people are foreclosing, to many banks are on the brink of collapse and finally the media and local news are running on these emotions. So when people start feeling happier and safer about buying a new home, we will continue to see a decline in value of homes.

I know I feel that way. I'm starting to get excited on the hopes of owning my own home. I make 115k a year and my S.O. makes 90k a year. We both can comfortably own a home in any kind of up or down market but, I was always taught to buy in a down cycle; that goes for anything.

Originally posted by jefwane
... isn't 3xs annual income the historical,sustainable norm?

Sounds reasonable to me.

By lending out so much money to people that couldn't afford it, it seems like the bankers suffored from whole scale amnesia.

Strange that a group of people that control the money supply have little regard for historical trends.

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

reply to post by In nothing we trust


They started drinking their own kool-aid. They knew it was going to end badly and had the hubris to think they could be out before it did. Believe it or not ther is a limit to bigger fools.

(As an aside innothingwetrust, my other comment wasn't meant to be personal, I just think the "say no to health insurance" is bad advice based on personal history a premature birth of a child followed by complications that lead to 6 weeks between 2 hospitals is an expensive proposition for a working person eligible for no public assistance and little private/charitable assistance initially we owed $25,000 after insurance the total bill b4 insurance was well over $200k).

Originally posted by jefwane
(As an aside innothingwetrust, my other comment wasn't meant to be personal, I just think the "say no to health insurance" is bad advice based on personal history a premature birth of a child followed by complications that lead to 6 weeks between 2 hospitals is an expensive proposition for a working person eligible for no public assistance and little private/charitable assistance initially we owed $25,000 after insurance the total bill b4 insurance was well over $200k).

NO offense taken Jef. The health insurance debacle was actually debated in this thread recently.

"It's Like Something Out Of The Third World"
www.abovetopsecret.com...'

Many people disageed with my views. I actually sold health insurance to small business owners for a few months, years ago. When I had prospects tell me that they were thinking of going without health coverage I didn't know how to respond. I thought they were nuts.

If I were selling the stuff now I would use scare tactics like big bill storys (Fear of loss). But I just feel like the entire system is so fuc@ed at this point that we just gotta take it down and start over.

What would I do if my little girl or boy needed a major operation and I didn't have health coverage?

God only knows. Bankruptcy, Medical tourism to India, car wash fundraiser, more drastic measures, who knows.

Just because you have health insurance and pay the premiums, it doesn't mean that they will pay the bill. Think about that.

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

I have some issues with some of the opinions in this thread.

1. This is a buyer's market only, and I stress only, if you have a significant amount of cash on hand for a down payment and have virtually impecable credit. The banks aren't lending right now. Right now is the time to be saving for a house because the prices will continue to drop and mortgage companies will continue to go belly up until this war of attrition is complete. Once housing prices begin to level off and lenders start lending again, THEN you buy.

2. Some folks here are cheering a double edged sword. As home values (synonymous with the market price, regardless of semantics) continue to drop, existing mortgages do NOT drop in amount owed. That means 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. That doesn't even count the interest they will pay if they pay installments through the life of the loan. 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.

3. The property tax question was quite valid. If you think this year has been brutal on state, county, and city budgets thanks to higher fuel and material costs, wait until you see next year. When the county assessors come knocking and one of two things happen:
a) The assessors continue to valuate the properties at their pre-downturn levels to ensure tax bills stay robust
or
b) The assessors drop the values down to current market level and government income generated by property tax comes in millions of dollars below 2008 figures for most major cities & counties.

If option a happens, there will be a massive home owner revolt, lawsuits, refusals to pay, and possible civil unrest in some of the hardest hit neighborhoods. If option b happens, especially in states like Washington & Texas which have no income tax and rely very heavily on property taxes, expect massive widescale budget cuts which will cause layoffs, eliminate all but the most essential social and civic programs, and severely damage the infrastructure as all but the most pressing maintenance will be put on the back burner, including most new construction.

Home values became ridiculously overinflated in the 90's and early part of this decade. That wouldn't have been such a huge deal except that far too many people, companies, & agencies latched onto the gravy train to make a buck without considering the long range implications. Home owners loved it because they believed the sky was the limit on how much of a return they could make on their investment. Companies loved it because they saw an opportunity to beef up their books and amass huge amounts of anticipated future capital from borrowers. The government loved it because all those lovely tax dollars helped fund their fondness for pork & gave them more $100 to wipe their backsides with or light their cigars with.

If we'd take the open market capitalism approach here (which we should, as it is the quickest path back to a robust market) the government would allow the war of attrition to claim whatever lending banks & mortgage companies couldn't keep themselves above water (there would be no bailout), anyone who had no business buying a home in the first place and only got one because of shady dealings and ARMs would lose the home they had no business in, and the local governments would be forced to actually budget and prioritize for a change instead of wasting precious tax dollars on new stadiums, art grants, and other needless crap. In other words, our economy would hit rock bottom quickly instead of this long drawn out process we're seeing right now, and it would have a chance to start its rebound sooner rather than later. Currently all that's been done is to shuffle the ultimate result down the road a little bit and a little bit there, stretching out the pain.

Originally posted by burdman30ott6
anyone who had no business buying a home in the first place and only got one because of shady dealings and ARMs would lose the home they had no business in, and the local governments would be forced to actually budget and prioritize for a change instead of wasting precious tax dollars on new stadiums, art grants, and other needless crap.

In other words, our economy would hit rock bottom quickly instead of this long drawn out process we're seeing right now, and it would have a chance to start its rebound sooner rather than later. Currently all that's been done is to shuffle the ultimate result down the road a little bit and a little bit there, stretching out the pain.

I think they lent out all this money with the intention of foreclosing on millions of homes. This is a pre-meditated economic disaster.

They intend on bringing about revolutionary change in this country. If they get us to revolt and take down the government then they will have achieved thier goal of destroying American sovriegnty. What better way to destroy a government then to have it's own citizens rise up and do it for them.

Please reference this thread.

Int'l bankers attempting to destroy America - NWO - 9/11 - Federal Reserve - Smoking gun
www.abovetopsecret.com...'

reply to post by Prometheus3


I live in overpriced Newton, and am still nauseated at the fact i had

to pay $997k in 2005 for a !@# Townhome, making me a financial

slave to it.

Boston and other metro areas that have minimally dipped in home values

(1-5%) should be next on the hitlist, and I DON'T CARE if the damn

house is worth less than our measly 20% equity in it.

A buddy remarked in 2004 "My dad bought his house in (bos metro town)

in 1955 for $12,000, which was about his yearly salary. Try buying a house

anywhere for your yearly salary..."

WHAT DID THIS STUPID COUNTRY EXPECT WAS GOING TO HAPPEN

TO INSANE HOUSING PRICES?

But, then again, a few people DID make a lot of money during this bubble,

just like the $1 trillion + that went 'poof' with the dot.coms.

My sister bought a $4 million dollar Malibu beach house in need of a

renovation, but her and her real estate finance hubby "can't afford it

due to market conditions..."

This is EVERYWHERE and AFFECTS EVERYONE. Makes me kinda smile

thinking about all those 'poor rich ladies in their maseratis' who

run me over every day in chestnut hill.

peaceout

[edit on 8/22/2008 by drphilxr]