IHB Featured Properties - Do you know some about them?

NEW -> Contingent Buyer Assistance Program
PURPLEHAZE_IHB

PURPLEHAZE_IHB

New member
Hello All,

Over time there have been a lot of properties posted here on IHB and there are some that you and I might have visited or known more about through a friend. I thought it might be interesting to spill more of the dirty secrets about some of these erstwhile buying prices.



Let me start with 9 Utah and 21 Carriage. The property at 9 Utah was in fact owned by a family friend of ours who sold this property and left California. It is a 2,240 sq feet home whose value increased 140 percent by the time the property was sold. I was talking to my friends and they were quite amazed at how the property is currently REO and how the person who bought the house from them had taken out HELOC on the property and destroyed its value.



21 Carriage - This house is owned by a couple who do modest jobs and simply could not have afforded the house. I did tour this house some time ago and realized during my tour based on the kind of jobs the couple do that their income would not be more than 60-70 k. This house has more than $800k in loans and again equity has been very conveniently extracted out of it.



These experiences remind you of the depth of the problem. They also confirm our worst fears about what kind of people are living in some of these homes. Would you still be surprised if the prices dropped 40 percent from now? I would not be. After all it is now socially acceptable to blame the tanking market and abandon your financial responsibilities aka mortgage payments. For all those eager to buy homes in the next few months, you might be just another fool on the block buying at WTF prices. As a society we have failed to correct our greed and to recognize and punish the greed of others by refusing to buy at WTF prices. So I am saying buyers in today's market have a responsibility - a responsibility to not buy at prices that makes housing less affordable to those who have a good credit and have so far been ignored and punished by the housing boom fueled by greed.
 
<p>I think the bottom will be 1999 esque prices - a era before travertine floors and marble countertops and Viking appliances, with prices on overimproved properties reflecting -0- additional dollar value.</p>

<p>Does 15 qualify as "a few months"?</p>
 
Even people with good credit were screwing up their mortgages. Just wait until 2009-2010 when prime loans are going down the drain as well.





You need to elaborate on your description of reasonable homebuyers.
 
I think that a reasonable homebuyer is somebody who has saved at least 10 percent downpayment. Someone whose income is at least 25-30% of the purchase value of the homes he is buying and has made an informed decision to buy based on the future liability arising out of mortgage payments, maintenance costs, insurance costs and contingencies.
 
Income of 25-30% of purchase value won't be happening for a while - at least not for your average person. Median salaries have declined in the last 5 years when controlled for inflation. Add a negative savings rate and your liabilities just went up as well.
 
What you gonna do? Maybe people like me are priced out forever. I will never want to pay WTF for a small piece of land even though it is in California and I refuse to pretend to be rich. I guess i fail the pre-requisites of CA residency - the big and glamorous life style that maybe 10 percent of the Hollywood types can afford.



I think that people who bought at the peak and were told by the realtors to buy now or be priced out forever did not realize that they had already been priced out forever and were buying something that was way over-rated and would consume a huge surplus over what they could reasonably rent a similar sized place for.
 
You must log in or register to reply here.
Back
Top