Housing market's gonna crash

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  • Tony M
    Tony M Posts: 11,059
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    Milito wrote: »
    Jstas wrote: »
    There's a few bubbles in the works.

    That instantaneous devaluation and subsequent loss of mortgage income is what led to the crash in 2007.

    The crash in 2007 was also the result of a certain President and political party in the early 90's thinking everyone should be able to buy a home even though they didn't have the income to afford one. They passed legislation requiring banks to make questionable loans to people who really couldn't afford the houses they were buying.

    My wife worked for a financial company and they got sued by the Feds because they weren't making those kind of loans and were then forced to make them.

    I worked with a guy who bought a new one. Within a year or 1 1/2, him and his family broke apart and they had to give the home to the bank. They didn't plan well enough for the house payments and all the bills and taxes that go along with ownership. Plus new furniture and new baby costs on top of that? Plus a new car to go along with the dream.

    It was obvious to me. I knew his wife's parents were there to help but it just got too much for all of them. Sad.

    People were telling us by the 10's to build a new bigger house in one of the new subdivisions. NOPE. We were dead set on not having a morgage payment for many years to come. :p We're still here too.
    Most people just listen to music and watch movies. I EXPERIENCE them.
  • mhardy6647
    mhardy6647 Posts: 33,272
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    Jstas wrote: »
    mhardy6647 wrote: »
    Be interesting to see the trend line for the NJ foreclosures from, say, 2000 to present.

    You know what? I've seen that statistic and I think I know where I can get it but it'll have to wait until after summer camp week.

    But it was not a good trend and I can point to each spike and tell you what crap fiscal policy out of Trenton caused it.

    Cool.
    I would look myself (and I still might) but I am pretty lazy.
    The state of MA is very good about making data like that readily available in meta-analyzable form -- well, at least for school district funding, budgets, and per-pupil spending (the kind of stuff I cared about when I was on a school board there).

    Just wondering, of course whether NJ cleaves to, or tends to lead, lag, or to correlate poorly, with broader US trends in that parameter (foreclosures).


  • SIHAB
    SIHAB Posts: 4,573
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    anonymouse wrote: »
    Milito wrote: »
    Jstas wrote: »
    There's a few bubbles in the works.

    That instantaneous devaluation and subsequent loss of mortgage income is what led to the crash in 2007.

    The crash in 2007 was also the result of a certain President and political party in the early 90's thinking everyone should be able to buy a home even though they didn't have the income to afford one. They passed legislation requiring banks to make questionable loans to people who really couldn't afford the houses they were buying.

    My wife worked for a financial company and they got sued by the Feds because they weren't making those kind of loans and were then forced to make them.

    Yes I am sure it was only colored people who took out loans they could not repay.

    What the. I think you need to re-read the post. Maybe you could ask the
    moderator to delete yours.

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  • Tony M
    Tony M Posts: 11,059
    edited July 2022
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    SIHAB wrote: »
    anonymouse wrote: »
    Milito wrote: »
    Jstas wrote: »
    There's a few bubbles in the works.

    That instantaneous devaluation and subsequent loss of mortgage income is what led to the crash in 2007.

    The crash in 2007 was also the result of a certain President and political party in the early 90's thinking everyone should be able to buy a home even though they didn't have the income to afford one. They passed legislation requiring banks to make questionable loans to people who really couldn't afford the houses they were buying.

    My wife worked for a financial company and they got sued by the Feds because they weren't making those kind of loans and were then forced to make them.

    Yes I am sure it was only colored people who took out loans they could not repay.

    What the. I think you need to re-read the post. Maybe you could ask the
    moderator to delete yours.

    My co-worker who jumped on the easy house buying rules was white, ex-marine and a hard worker too. ;) I think ANYBODY that had a job for a while was eligible and rarely refused a home loan.

    I also faintly remember their monthly house payment went up gradually over that year or 1 1/2 years too. :'(
    Most people just listen to music and watch movies. I EXPERIENCE them.
  • txcoastal1
    txcoastal1 Posts: 13,145
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    The con on the home sales back then was the short term ARM loans that were given out for the buyers down payment. This usually stretched and took the buyer into "over budget" ...

    If they got behind those ARM notes had a hefty balloon note payoff ...pop the bubble
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  • invalid
    invalid Posts: 1,303
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    I guess there is no personal responsibility, or common sense nowadays, I would think people would know if they could afford a home loan or not, even if the lender says you are approved.
  • txcoastal1
    txcoastal1 Posts: 13,145
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    Correct ..."Keeping up with the Jones'"

    Plus that heart felt feeling of family and a nice home, while they waived the carrot in front over your nose...with that piece of paper "approved"
    2-channel: Modwright KWI-200 Integrated, Dynaudio C1-II Signatures
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  • mhardy6647
    mhardy6647 Posts: 33,272
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    invalid wrote: »
    I guess there is no personal responsibility, or common sense nowadays, I would think people would know if they could afford a home loan or not, even if the lender says you are approved.

    ... which includes being able to figure out if one can afford the home loan for, say, 3 months if one suddenly finds oneself outta work. :#

  • aprazer402
    aprazer402 Posts: 3,120
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    Next year I'll have been a real estate broker 40 years. Appraiser since 1993. I've seen a lot. In the late 90's, early 2000's I saw thrift lenders making high interest rate loans at 155% LTV using drive-by appraisals.

    It's difficult to predict where things are heading. Common sense wants us to think it has to reverse somewhat. Still seeing multiple offers on the lower priced homes as many of these buyers, requiring financing, are being shut out by investors (either local or national ones) that are cash buyers.

    With all the new appraisal types and requirements (no inspections, doing them virtually with third party provided photos and floor plans) and still full liability, many appraisers are re-thinking their career. Especially the older ones that have been on the verge of retirement for several years.

    I haven't posted much lately. My mother passed away in June, she was 93.

    You guys are great!
  • mhardy6647
    mhardy6647 Posts: 33,272
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    Sorry to hear about your mother, @aprazer402
  • treitz3
    treitz3 Posts: 18,548
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    Sorry to hear about your mother as well. Please accept my sincerest condolences.

    Don't be a stranger though. Some of the things you ran across have cracked me up over the years.

    I don't think sales will slow down too gawd awful much and rent prices will remain high because of those investment companies. In some cities/counties/major metropolitan areas, they already own 10% of the area and rent them out at exorbitant prices. (Read $2.3K a month for something someone could literally buy for 1K a month)

    Tom
    ~ In search of accurate reproduction of music. Real sound is my reference and while perfection may not be attainable? If I chase it, I might just catch excellence. ~
  • treitz3
    treitz3 Posts: 18,548
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    Well, please allow me to comment further on that last post. Rising interest rates will have a substantial effect on sales for private homeowners. The investment companies will just restructure and raise their rents even higher but they will not slow down IMO/IME. They are making way too much bank to stop buying.

    Tom

    ~ In search of accurate reproduction of music. Real sound is my reference and while perfection may not be attainable? If I chase it, I might just catch excellence. ~
  • Milito
    Milito Posts: 1,925
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    anonymouse wrote: »
    Milito wrote: »
    Jstas wrote: »
    There's a few bubbles in the works.

    That instantaneous devaluation and subsequent loss of mortgage income is what led to the crash in 2007.

    The crash in 2007 was also the result of a certain President and political party in the early 90's thinking everyone should be able to buy a home even though they didn't have the income to afford one. They passed legislation requiring banks to make questionable loans to people who really couldn't afford the houses they were buying.

    My wife worked for a financial company and they got sued by the Feds because they weren't making those kind of loans and were then forced to make them.

    Yes I am sure it was only colored people who took out loans they could not repay.

    Nobody said anything about the race of the people buying the houses as people of all races were guilty buying more than they could afford.

    Some people have to bring race into every discussion. Get over it.
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  • Gardenstater
    Gardenstater Posts: 4,242
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    Watch "The Big Short" with Christian Bale. The banksters engaged in predatory lending via subprime mortgages and turned it into a pyramid scheme via credit default swaps. I don't see the fair lending act as being the cause. Just greed. And none of them bastids did any time in jail and most got bailed out and were collecting fat bonuses within short order afterwards.
    George / NJ

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  • Emlyn
    Emlyn Posts: 4,415
    edited July 2022
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    Also see the movie "Margin Call" although I thought The Big Short was more entertaining. Housing was the focus of massive speculation and corruption from bottom to top at the time until some of the speculators decided the music had come to an end, as they put it, and pulled the plug. Not the first time and won't be the last. It's how capitalism has worked for hundreds of years.

    As far as house prices go, in my area there still aren't many places on the market but the asking prices are dropping about 5 to 10 percent from their peak back in the spring but those were inflated by about 30 to 40 percent since the start of the pandemic.
  • Milito
    Milito Posts: 1,925
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    anonymouse wrote: »
    Milito wrote: »
    anonymouse wrote: »
    Milito wrote: »
    Jstas wrote: »
    There's a few bubbles in the works.

    That instantaneous devaluation and subsequent loss of mortgage income is what led to the crash in 2007.

    The crash in 2007 was also the result of a certain President and political party in the early 90's thinking everyone should be able to buy a home even though they didn't have the income to afford one. They passed legislation requiring banks to make questionable loans to people who really couldn't afford the houses they were buying.

    My wife worked for a financial company and they got sued by the Feds because they weren't making those kind of loans and were then forced to make them.

    Yes I am sure it was only colored people who took out loans they could not repay.

    Nobody said anything about the race of the people buying the houses as people of all races were guilty buying more than they could afford.

    Some people have to bring race into every discussion. Get over it.

    @Milito you brought in a certain president and alleged that (fair lending) laws are the problem that caused the financial crisis. Anybody familiar with the fair lending laws knows that those laws address (racial) discrimination. I'm sorry for calling your innuendo, but there is nothing about fair credit laws that forced bad loans. Those laws were all about (racial) discrimination.

    I said also, which means in addition to. I didn't say that was the only problem. There were plenty of other races besides blacks who bought more house than they could afford. Like I said where my wife worked they were told by the Feds to make loans to people who shouldn't have purchased as expensive a house as they did which caused problems later for them.

    Were there some banks and mortgage lenders that played the system, of course and they should have been punished for it.


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  • mrloren
    mrloren Posts: 2,456
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    I'm see more homes on my local market lately not selling.

    When I was a kid my parents told me to turn it down. Now I'm an adult and my kids tell me to turn it down.
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  • pitdogg2
    pitdogg2 Posts: 24,784
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    mrloren wrote: »
    I'm see more homes on my local market lately not selling.

    Not here! The only sign you ever see is the sold sign. If you're not looking at Zillow every 15min you've lost out.
    Its CRAZY!
  • sucks2beme
    sucks2beme Posts: 5,571
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    Easy credit is a trap. And lenders have these bear traps set everywhere.
    Homes, cars, loans, credit cards. I remember not getting my 1st credit card
    until I was 26. It was from Sears with a $600 limit.
    My parents NEVER had credit cards. Now people have pockets full of them.
    They have trained a generation to only look at monthly payments, not the
    bigger picture. Go try buying a car with cash and see how the dealer responds.
    They get a kickback on loans.
    Home buyers now have to have granite counters and stainless appliances.
    Better to pay less and add upgrades when you can afford them.
    Learn to paint your own walls. Or mow your own grass. I must be the only guy in
    the neighborhood still mowing. And a lot of them have teenage kids.
    Put them to work. At least then 10 years down the road they'll understand
    the work that it takes to own a home.
    "The legitimate powers of government extend to such acts only as are injurious to others. But it does me no injury for my neighbour to say there are twenty gods, or no god. It neither picks my pocket nor breaks my leg." --Thomas Jefferson
  • aprazer402
    aprazer402 Posts: 3,120
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    Interesting related article. Mortgage interest rate and appreciation.

    https://appraisalbuzz.com/market-correction-or-seller-panic/
  • tonyb
    tonyb Posts: 32,912
    edited July 2022
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    My father always said if you can't pay cash, you can't afford it. Outside a mortgage obviously. He always paid cash for cars, trips, whatever. It wasn't until his 60's he finally got a CC because he didn't like having to carry that much cash around.

    Different times now, you can't live without debt. Your credit score would reflect that. What a racket huh, you have to go into debt, to prove your worthy of credit, to lift your credit score so you can borrow larger sums of money and go into larger debts. The whole system is by design to keep people in debt.

    Remember, the Banks are too big to fail, your not. They'll get bailed out, you won't.
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  • VR3
    VR3 Posts: 28,232
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    I make thousands every year from credit card points and bonuses, one card alone was close to 1400.

    I haven't carried cash or a debit card since I was in high school.

    Never paid a penny in interest either

    Credit cards and debt in general are like any other tool. A hammer can build a house or knock one down, all depends on its use.

    Banks also have tons of bonuses for new checking and saving customers. I bet in the past two years I have opened and closed accounts at over a dozen banks.

    Use the system, don't let it use you!
    - Not Tom ::::::: Any system can play Diana Krall. Only the best can play Limp Bizkit.
  • Tony M
    Tony M Posts: 11,059
    edited July 2022
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    I played the CC jumping game 35 years ago. No interest for about 15 years. The Companies kept sending 0% for 9 months' offers. We did get a Credit score of 9.5 one bank loan officer told me. Her eyes got huge when the score showed up on her screen. :D
    She said it was one of the best she had ever seen. All we did was charge some expensive things and never missed a payment over the years.

    We still don't pay interest on 99% of our charges since we can now afford to pay the bills when they come in.

    My Mom used to jump around with the phone companies back in the 70s and 80s. They would send her $$$ to switch. :o

    My old mortgage was sold to other mega organizations about 3 or 4 times. Nothing ever changed payment-wise, but they notified us with a letter when it switched hands.

    Most people just listen to music and watch movies. I EXPERIENCE them.
  • invalid
    invalid Posts: 1,303
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    All our goods and services cost a little more because people use credit cards instead of cash, that's why you don't pay any interest if you pay it off every month, your paying on the front side.
  • Gardenstater
    Gardenstater Posts: 4,242
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    For the most part, those who pay cash are subsidizing the credit card payers, with certain exceptions like gas stations where they have two prices. I figure I have to pay with a credit card, because the prices have the credit card payers fees that the merchants have to pay to cc companies baked into the price, so I might as well get the cash back to offset that.
    George / NJ

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  • VR3
    VR3 Posts: 28,232
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    You are talking about a systemic change. In our current environment, things cost the same whether cash or credit. So if I have to pay extra, I may as well receive it back.

    Just like people I know asking for 15 dollars a hour minimum wage. If you don't change the system, it could be a million dollar a hour minimum wage, you will still be broke. Everything will cost more and people will be replaced with self check outs without a systemic change.
    - Not Tom ::::::: Any system can play Diana Krall. Only the best can play Limp Bizkit.
  • mhardy6647
    mhardy6647 Posts: 33,272
    edited July 2022
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    tonyb wrote: »
    ...
    Different times now, you can't live without debt. Your credit score would reflect that. What a racket huh, you have to go into debt, to prove your worthy of credit, to lift your credit score so you can borrow larger sums of money and go into larger debts. The whole system is by design to keep people in debt.
    ...

    Not sure why you say that, or maybe I'm not sure what you mean.
    No debt here. We did finance Mrs. H's last car (first time we ever did so) 'cause the interest rate was considerably less than the rate of inflation. It's been paid off for a couple of years, though. Our credit scores are fine (Discover shows us ours every month, bless their hearts).

  • Milito
    Milito Posts: 1,925
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    We charge everything to get the airline miles. We do however pay them off each month. We have made 4-5 flights to Europe and never paid for an airline ticket in either business class or first class.

    With my bad back I can't sit in coach seats for that long a flight. I tried it flying back from London one year and it just about killed me as my back was killing me when we landed. Never again on a long flight.
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  • heiney9
    heiney9 Posts: 25,105
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    VR3 wrote: »
    I make thousands every year from credit card points and bonuses, one card alone was close to 1400.

    I haven't carried cash or a debit card since I was in high school.

    Never paid a penny in interest either

    Credit cards and debt in general are like any other tool. A hammer can build a house or knock one down, all depends on its use.

    Banks also have tons of bonuses for new checking and saving customers. I bet in the past two years I have opened and closed accounts at over a dozen banks.

    Use the system, don't let it use you!

    Agree, this ^^^. I do have a debit card too, but I use a credit card for many daily purchases and ALL on-line purchases. Rack up the cash bonuses and pay it off every statement. All Paypal purchases are made with 6 months no interest. I have the cash to make the purchase, but why not use someone else's cash for free. I don't make a lot of Paypal purchases in general and when I do they are usually larger purchases, like most of the new office rig.

    The only down side is tracking multiple payments a month, but with electronic billing and on-line payment, it's easy peasy.

    Obviously in my scenario I never "charge" more than I can pay off in a statement cycle. I love the convenience, the purchase tracking and of course the cash back rewards which are generally 3-5%.

    Sorry to John for the derail.....

    H9
    "Appreciation of audio is a completely subjective human experience. Measurements can provide a measure of insight, but are no substitute for human judgment. Why are we looking to reduce a subjective experience to objective criteria anyway? The subtleties of music and audio reproduction are for those who appreciate it. Differentiation by numbers is for those who do not".--Nelson Pass Pass Labs XA25 | EE Avant Pre | EE Mini Max Supreme DAC | MIT Shotgun S1 | Pangea AC14SE MKII | Legend L600 | BlueSound Node 3 - Tubes add soul!
  • sucks2beme
    sucks2beme Posts: 5,571
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    That's the credit card trap. Most people get themselves into trouble
    It's kind of like that great cheap buffet at the casino.
    As long as you stick to the plan you're OK. Most can't.
    The world changed when people stopping being called customers
    and became consumers. Once you can walk through a store and
    can't think of a thing you need, you're on your way to
    getting off the treadmill.
    "The legitimate powers of government extend to such acts only as are injurious to others. But it does me no injury for my neighbour to say there are twenty gods, or no god. It neither picks my pocket nor breaks my leg." --Thomas Jefferson