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jig
join:2001-01-05
Hacienda Heights, CA
| reply to dogma
Re: California; More Leaving, Less Coming
the investor insight thing doesn't seem to work with firefox.
other than that, i don't buy it. there might have been some people who bailed, but there's been some talk about jobs opening up, hirings going on. it'll be interesting to see what happens if the defense contracts evaporate with the iraq conflict, but in actuality the police state is so ingrained at the moment, i don't see sales dropping off in that market for at least another 10 years.
i think there are a bunch of us with cash waiting for the housing market to drop a bit... probably too many. that by itself will keep the market buoyant. job cuts don't seem to be imminent, so the fools with super huge mortgage payments won't be defaulting as much as you'd hope.
i'm still thinking that houses in the 400-700k range will be able to sell, but there is a house on our street that's been on the market for a bit. i haven't found out what they're asking (it's probably too much), but it hasn't been too long...
anyway, 40% might be what the 2mill and above will drop, i doubt anything below 1.5 will drop nearly that much. and i'm not sure where the information about there being an exodus from CA is coming from, but i think that's in error. i would, however, like to see some decent numbers about incoming illegals/poor immigrants. i was getting the feeling that those numbers were dropping as well.
aside: that vast majority of out of state students i went to college with stayed in CA. unless that trend has changed, i don't see the arizona retirees beating those numbers.
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A man compounded of law and gospel is able to cheat a whole country with his religion and then destroy them under color of law. -Ben Franklin | |
dogma
Premium
join:2002-08-15
Boulder City, NV
| said by jig  :...jobs opening up, hirings going on. ...i think there are a bunch of us with cash waiting for the housing market to drop a bit... ...the fools with super huge mortgage payments won't be defaulting as much as you'd hope. ...40% might be what the 2mill and above will drop, i doubt anything below 1.5 will drop ...i don't see the arizona retirees beating those numbers. Depends on what kind of jobs will be coming online. The $12 - $20/Hr variety will not support today's average home mortgage, even with hocus-pocus loan packages.
The "fools" don't have super huge mortgage payments now, but as those negative-amortizing interest-only-teaser-rate-no-doc-stated-income loans reset, like aztecnology suggested, things may become rather ugly. Especially with the new BK laws, which are equivalent to debtors jail, without the bars. A 40% decline may be conservative.
The wildcard in this deck may be newer, even more bizarre loan programs of NegAm-IntOnly 50-60 Year re-fi programs that bail these "fools" out. But they will never own, or accrue equity in the property...so it will be like perpetual renting with the ability to remodel. (Mortgage lenders are learning from the credit card companies that it's much more profitable to keep consumer-bots in everlasting-debt)
said by Bloominite :Maybe CA will see a turnaround and again become as nice a place to live as it used to be, but I don't see it happening. The infrastructure is busting at the seams, social services are overburdened and the people best suited to correct and fund the much needed improvements are bailing out in droves. I would tend to agree. It's more of a brain drain. | |
dogma
Premium
join:2002-08-15
Boulder City, NV
| reply to jig
Found this article in the L.A. Times yesterday:
»www.latimes.com/business/la-fi-o···ll.story
Basically, voodoo economics on Meth smoked in a well seasoned crack pipe...otherwise known as "pay option" mortgage loans. Here one can get a $300K no-down loan (or even worse, a re-fi or HeLOC) for about $1000/Mo. You have the "option" of paying an absolute minimum...for a while. Of course in 4 years, the payment automatically jumps to almost $3000/Mo. And more than likely, the $300K principal would then be $350K.
Think only an idiot would go for such a scam? Think again;
said by L.A. Times :
In the first eight months of 2006, even as the real estate market began to weaken amid fears of a downturn, the appeal increased again. Nearly 1 in 3 California loan applicants are now choosing them. The state boasts about 580,000 active pay option mortgages, about half the U.S. total.
The article features this 56-year old guy (I imagine there are at least 2 million Californians in this same situation) that lives in Corona who blew almost $200K in re-fi's over the years...and now it's time to pay the piper. If he sold his house today, he would need to bring about $35K to the closing, which he doesn't have, and then he would be homeless, without a dime to his name.
Of course, he blames it on 9/11 and his loan broker. | |
aztecnology
O Rly?
Premium
join:2003-02-12
Murrieta, CA
 ·Verizon FIOS
| said by dogma :Of course, he blames it on 9/11 and his loan broker. Don't forget his acumen with dotcom stocks and his brilliant move into equities...  | |
jinjimbob
Troy Mcclure
join:2001-11-13
| reply to dogma
said by dogma :Found this article in the L.A. Times yesterday: » www.latimes.com/business/la-fi-o···ll.storyBasically, voodoo economics on Meth smoked in a well seasoned crack pipe...otherwise known as "pay option" mortgage loans. Here one can get a $300K no-down loan (or even worse, a re-fi or HeLOC) for about $1000/Mo. You have the "option" of paying an absolute minimum...for a while. Of course in 4 years, the payment automatically jumps to almost $3000/Mo. And more than likely, the $300K principal would then be $350K. Think only an idiot would go for such a scam? Think again; said by L.A. Times :
In the first eight months of 2006, even as the real estate market began to weaken amid fears of a downturn, the appeal increased again. Nearly 1 in 3 California loan applicants are now choosing them. The state boasts about 580,000 active pay option mortgages, about half the U.S. total.
The article features this 56-year old guy (I imagine there are at least 2 million Californians in this same situation) that lives in Corona who blew almost $200K in re-fi's over the years...and now it's time to pay the piper. If he sold his house today, he would need to bring about $35K to the closing, which he doesn't have, and then he would be homeless, without a dime to his name. Of course, he blames it on 9/11 and his loan broker. Wow, that guy was an idiot with his head in the clouds.
"Comparable homes in his neighborhood fetch more than $400,000. With fresh paint and a few repairs, Hertzberg could probably sell his place for $275,000 more than he paid.
He would see little of that, however, because he's already seen so much. Over the years he has taken out $190,000 in cash through refinancings.
Hertzberg's home equity paid off his credit cards, financed trips around the world that allowed him to indulge his passion for photography, bought a $32,000 Toyota Avalon and enabled some lousy investments." | |
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