The US Housing market is in deep shit

[chinthee]

Existing Home Sales Drop for Seventh Straight Month

The mounting glut of unsold homes might be a bigger concern for economists. The housing inventory in March increased 1%, to 4.06 million homes available for sale. That represented a 9.9-month supply at the current sales pace (up from 9.6 months in February), the report said. In March last year, before the credit crunch gripped the nation, the market had 7.5 months of inventory.

"Given both that the inventory overhang increased a bit and that recessionary job losses could lead to more foreclosures, the outlook is not good at all," said Anirvan Banerji, director of research for the Economic Cycle Research Institute. "It's likely that we'll see many more months of price declines."

"House prices are dropping in more places and dropping at an accelerating rate," said Global Insight economist Patrick Newport. "If you buy a house today, there's a good chance it will be worth less a year from today The economy is losing jobs. And credit is tight. You add those things together, and the home-selling season this year is going to be another bad one."

Existing Home Sales Drop for Seventh Straight Month - Yahoo! News

Crap, what happened to the American Dream?

[Texpat]

Great news. I moved to Thailand in 06 and saw the baht appreciate nearly 25% in two years.

The value of land here (which I bought in 03-04 has appreciated much more than that. I could sell my place, with the land, and probably break even. (sadly homes don't appreciate here like they do elsewhere).

I might suck up a juicy foreclosed place in Florida or South Carolina for 60-70 cents on the dollar and just get outta here.

Or I might not. Sinking a few million baht into this place might not have been such a bad idea.

Makin' lemonade.

[Spin]

Crap, what happened to the American Dream?

It turned intop a nightmare for a few years, thats all.

If its any consolation, things are no better in the UK. No lenders lending.

[barbaro]

I saw this happening, the housing market going down in August of 2006.

It was obvious then.

I started a thread about it, then.

It'll be fun to watch.

[chinthee]

^Milkman, this is not fun to watch. Many of our families are affected.

[Texpat]

So what moves did you make?

I've repeated on several threads I saw it coming as well -- refused to buy a house and finally moved away. (as now rentals there are MORE expensive than during the housing boom.) Supply/demand.

Please enlighten us as to what portfolio changes you made to insulate yourself from the obvious, forebearing risk.

[barbaro]

^Milkman, this is not fun to watch. Many of our families are affected.

Mine, too. Serious.

They invested in certain areas.

Oh, well.

Anyone who did not see this train crash coming is and was, an ignorant fool.

I started 2 threads on this: one in 2005, and another in August, 2006.

[barbaro]

Crap, what happened to the American Dream?

Contrary to popular belief,

the "American Dream" was never to take on a mortgage (buy a house).

It's the poor man's way to feel like he/she has something. And it's a lie.


Look at the Schiller Index since 1890 to today in, 2008.


Mort = death

Gage = pledge

Mortgage = deathpledge.

A French word.

[Texpat]

That's absolute bullshit.

I have five brothers and sisters scattered across the country.

They're between 36 and 48 and ALL own their homes, outright.

If some poor stupid fcuks can't make the right decisions and continually take mortgage loans to support their lifestyles, they'll forever be slaves to the bank.

Those that have a work ethic do what they must and get their house paid for. Don't make excuses for the weak and stupid. The American dream will always elude them.

[barbaro]

That's absolute bullshit.

I have five brothers and sisters scattered across the country.

They're between 36 and 48 and ALL own their homes, outright.

If some poor stupid fcuks can't make the right decisions and continually take mortgage loans to support their lifestyles, they'll forever be slaves to the bank.

Those that have a work ethic do what they must and get their house paid for. Don't make excuses for the weak and stupid. The American dream will always elude them.

Tex,

I do agree with you. I agree 100%.

I should be more clear in meaning, that the "American dream" of buying a home is constantly reported about in the media in the USA. And yes, the people that took ARMs, teaser rates, when they could not afford the adjustments were, ignorant. A lot of people are upside down right now, and the used their home equity as an ATM machine.

Some (not all) private mortgage lenders were dishonest as well. But the stories I've read, and the interviews I've read from the people that took out these loans, many with false information, reveals that something is wrong with a lot of people, IMO.

[Texpat]

something is wrong with a lot of people

Yes, they're less intelligent than others and will pay out the ass for it in the end.

They want something for nothing and are too thick to understand the world doesn't work that way.

If some people aren't smart enough to read the fine print, they should stay home with mommy and daddy. If they're taking a mortgage they can't afford, they're on increasingly thin ice. Fundamental, basic mortgage calculators are available everywhere. Input your income, subtract your expenses and viola, you get a reasonable amount you can afford on a mortgage.

It doesn't require a $200-an-hour accountant to figure this shit out. These dimwits featured on the news channels who claim they didn't know what they were getting into should be jailed for being so stupid.

Predatory lending is a euphamism for sticking-it-to-retards. Buying a house is one of the most important purchases many people will ever make. How can people honestly give it so little thought?

Yep, stupid.

[barbaro]

something is wrong with a lot of people

Yes, they're less intelligent than others and will pay out the ass for it in the end.

They want something for nothing and are too thick to understand the world doesn't work that way.

If some people aren't smart enough to read the fine print, they should stay home with mommy and daddy. If they're taking a mortgage they can't afford, they're on increasingly thin ice. Fundamental, basic mortgage calculators are available everywhere. Input your income, subtract your expenses and viola, you get a reasonable amount you can afford on a mortgage.

It doesn't require a $200-an-hour accountant to figure this shit out. These dimwits featured on the news channels who claim they didn't know what they were getting into should be jailed for being so stupid.

Predatory lending is a euphamism for sticking-it-to-retards. Buying a house is one of the most important purchases many people will ever make. How can people honestly give it so little thought?

Yep, stupid.

This is the quote of this thread. Perfectly summed up.

My dad gave me a little amortization booklet when I was 20 or 21.

You hit this right on the head. I have no sympathy for these folks and they should not be given a dime, have their mortgages re-adjusted, nor given any lee-way.

[raycarey]

These dimwits featured on the news channels who claim they didn't know what they were getting into should be jailed for being so stupid.

so if this is the rationale, then the police shouldn't investigate crimes that happen to people who show poor judgment....those who didn't lock their doors, or were walking in 'bad' parts of town at night. and what about the old folks who get conned out of their retirement funds by tin men or guys working in boiler rooms?

of course these people showed poor judgment, but that doesn't discount the fact that many were swindled by predatory lenders.

[Jet Gorgon]

^ It's happened forever, Ray. A fool and his money are soon parted.
I found being back in the Western world, I have to look much closer at the mountain of 2-point print at the bottom of any contract.
Everybody wanted to get rich quick and have it easy in housing -- the builders, the lenders, the borrowers. Hey, the loans are so cheap we can buy three homes, Honey -- rent two to pay our mortgages, we're on easy street.
Saw a news clip where one lady couldn't keep up with her higher mortgage payments so she borrowed from a paycheck lender, not once but a few times. Their rates are even more exorbitant. She said she didn't understand the lending policies and rates. Hey, it's not McDonald's.

[raycarey]

errr....great. thanks for sharing. but you haven't addressed the point of my post.

here's a tip.....employing the driventowin debate strategy is tiresome....and rarely successful.

[barbaro]

^ It's happened forever, Ray. A fool and his money are soon parted.

This rings so true. In almost all aspects of life.

I found being back in the Western world, I have to look much closer at the mountain of 2-point print at the bottom of any contract.
Everybody wanted to get rich quick and have it easy in housing -- the builders, the lenders, the borrowers. Hey, the loans are so cheap we can buy three homes, Honey -- rent two to pay our mortgages, we're on easy street.
Saw a news clip where one lady couldn't keep up with her higher mortgage payments so she borrowed from a paycheck lender, not once but a few times. Their rates are even more exorbitant. She said she didn't understand the lending policies and rates. Hey, it's not McDonald's.

And in addition to being fools there are people are naiive, gullible, and lazy.

Always calculate the scenarios involved in things like this.

Most things in life worth anything don't come easy. If it sounds to easy, or if it sounds to good to be true, it probably is.

[raycarey]

i don't disagree with anything you've written in the above post MM....but at the same time, the govt. has a responsibility to investigate and then prosecute the bankers who conned the borrowers.

[Jet Gorgon]

There's a sucker born everyday, Ray.
There was nothing wrong with the loans given to people who put zero down on a home. The higher mortgage rates and incremental increases were on the contracts. By your reasoning, if I buy anything on credit and default on my payments, I should be able to run to the government to bail me out. That's a crock.

[raycarey]

There was nothing wrong with the loans given to people who put zero down on a home.

of course not.
it's a time honored practice.

By your reasoning, if I buy anything on credit and default on my payments, I should be able to run to the government to bail me out. That's a crock.

actually, that's BSC.

[Spin]

I'm amazed that homebuyers are being called stupid on here. People wanted to buy a home at a time when prices were rising. The plan seemed infallable. You buy the home, the value rises and in you refinance the ARM for another mortgage at the end of the discount rate. I dont see how you can call people who wanna make some money and get on "stupid", thats like calling all Americans stupid because everybody wants to make money and be good consumers.
The only stupid people here are the mortgage lenders, they are the gatekeepers, the folks who should regulate what borrowers can and cannot afford. There should have been calculations to ensure that ARMS could still have been paid by borrowers in the event of a downturn in property prices.
No way is the buyer to blame for this, they are just consumers, doing what they're government wants them to do, which is spend money.
Can somebody tell me what the regulators and the FED were doing about the foolish lending standards at the time? It seems the answer is a big fat nothing, looking the other way.

There was nothing wrong with the loans given to people who put zero down on a home

Disagree, it was the lender who was wrong to lend the money, it was the mortgage broker who was wrong to recommend and shamelessly sell the ARM when the whole process was based on prices continuing to rise.

[Jet Gorgon]

I'm amazed that homebuyers are being called stupid on here. People wanted to buy a home at a time when prices were rising. The plan seemed infallable. You buy the home, the value rises...
Disagree, it was the lender who was wrong to lend the money, it was the mortgage broker who was wrong to recommend and shamelessly sell the ARM when the whole process was based on prices continuing to rise.

That's why most people invest, Spin. You expct the value and prices to rise. Everyone got greedy and people bought when prices were high. If you have a product and demand rises for it, you make more to sell. Not really different in finance. Then the bottom fell out of the US housing market, credit got tighter. Few could sell at a reasonable never mind higher price, and many could not pay their mortgages, either because they couldn't really afford it in the first place or they lost their job. But, the mortgage contracts all had disclaimers saying rates might/would change. Of course it's not fair. But life never is.

[raycarey]

The only stupid people here are the mortgage lenders, they are the gatekeepers, the folks who should regulate what borrowers can and cannot afford. There should have been calculations to ensure that ARMS could still have been paid by borrowers in the event of a downturn in property prices.

according to some, this was not necessary....these lenders were following normal lending practices.

it was the lender who was wrong to lend the money, it was the mortgage broker who was wrong to recommend and shamelessly sell the ARM when the whole process was based on prices continuing to rise.

and the reason they did it is because they had no risk...they knew they were passing it on...all around the world.

the hypercapitalists socialized risk at the very same time they've privatized reward.

[raycarey]

There was nothing wrong with the loans given to people who put zero down on a home.

i'd like to read more about your reasoning behind this gem.

[Jet Gorgon]

^ The terms were set, Ray. Just like any financial agreement. You play, you pay.

[Texpat]

Simple business law. Contracts are legally binding. Even if they're unethical -- but not illegal. Country governed by law, Ray. Not self-appointed do-gooders whose only purpose is to protect the numbskulls who can't think for themselves. Thank goodness.

These fools signed contracts.