From NJBIZ:
This Housing Slump Is for Real but Overblown
NJBIZ: How have home prices in New Jersey behaved in this slowdown?
Otteau: Home prices in the state declined in 2006 by 6 percent to 12 percent, depending on the location. They stabilized in the first quarter of 2007, which means they stopped declining. As to what will happen going forward, it hinges on whether the spring selling season has been delayed—whether the increase in sales is yet to occur or we will miss it altogether. It normally begins in March. In the past month-and-a-half, sales have been increasing, but are less than would be typical for a spring market. So we are seeing a weak spring market.
NJBIZ: Which are the strongest and weakest housing markets in the state?
Otteau: The markets where we expect to see some upward price movements are on the direct-rail corridors to Manhattan. The reason for that is the Manhattan housing market did not experience a correction this time, the weakening that the rest of the country did. It stayed strong and that is pushing demand out along the rail corridors for buyers who cannot afford Manhattan prices.
Where that is strongest is in the Gold Coast markets of Hoboken and Jersey City in Hudson County, where home sales this year are up year-to-date by 20 percent. We are also seeing that trend along the Midtown Direct line in Bergen County, in Essex County, in Montclair and along the Route 78 corridor from Millburn and Summit out into Madison, Chatham and New Providence.
NJBIZ: How is the crisis in the sub-prime lending market affecting New Jersey’s real estate industry?
Otteau: At this point the impact is mostly psychological. It has introduced an additional layer of concern in the minds of homebuyers who are already worried about where housing prices are heading. So, in that sense, it has removed all sense of urgency to buy now, and is causing buyers to take a wait-and-see approach.
NJBIZ: Is this concern warranted?
Otteau: Some concern is warranted, but the level of concern is being exaggerated by the distortion of the facts. (Currently) in New Jersey, the inventory of homes for sale is equivalent to 7.3 months of supply, as compared with 5.6 months a year ago. Today we have 65,000 houses for sale in New Jersey. One year ago that was at 55,000 houses. The peak occurred in August last year when there were 68,000 homes for sale. Those numbers indicate that the market is weaker than it was a year ago because there is more unsold inventory. So that is real.
NJBIZ: You say in your latest newsletter that the magnitude of foreclosures is overstated. What is the correct picture?
Otteau: The accounting of foreclosures includes both homes in delinquency as well as actual foreclosures. And that’s generally not understood. Basically there are three stages of the foreclosure process. The first one is delinquency, when a borrower falls behind in mortgage payments, usually for about three [successive] months. At that point the home is counted as being in the foreclosure process, although it is probably more than a year away from foreclosure.
The second phase is when the bank issues a notice of foreclosure indicating its intention to foreclose if the payments are not brought current. The third step is the actual foreclosure, where the property goes through a sheriff’s sale. In New Jersey, out of a total of about 5,000 homes per month that are currently counted in the foreclosure process, only 200 a month are actually being foreclosed on.
NJBIZ: If 200 homes each month are being foreclosed, are the other 4,800 homes emerging from delinquency?
Otteau: They are either emerging out of delinquency or are still in the foreclosure pipeline. We are approaching the record foreclosure levels from the recession of 1989-91, which averaged about 300 homes per month. What’s alarming here is we are approaching recession-like foreclosures without a recession. The risk is if the economy were to go into recession in the next two years, we could expect the foreclosure rate to double. If companies start cutting jobs and laying off employees, it would be more than the housing market could bear.
NJBIZ: You’ve said that fears of a housing slump could become a self-fulfilling prophecy. That sounds alarming.
Otteau: It is frightening. The rule in real estate is that if buyers believe it to be a bad market, it will become that. This is the first time in history that it is happening to the entire housing market, when we have record low interest rates and an economy that is still expanding and creating new jobs. At least we are not in the situation where we are losing jobs and people are losing employment.
Sorry for splitting the thread…
jb
From Reuters:
Fed official says don’t choke off subprime lending
Steps to address lending problems that led to a jump in U.S. mortgage delinquencies should curb abusive practices but not choke off all loans to borrowers with weak credit, a Federal Reserve official said on Monday.
“Mortgage market problems need to be addressed in a way that addresses unfair and abusive practices while preserving incentives for responsible subprime lenders,” said Sandra Braunstein, director of the Fed’s division of consumer and community affairs, in the text of a speech.
Braunstein was speaking before a House of Representatives government oversight panel hearing in Cleveland. A text of her speech was made available to reporters in Washington.
Concerns look overblown to me:
http://graphics.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Nothing much to worry about, more “appreciation” on the way soon.
I sure hope that the amnesty law passes so the illegals can buy up some of these houses and keep the market from crashing.
definitely much sober assessment published till date in NJ MSM.
#4: they can afford $500k starter capes but I can’t with a college education, perfect credit, no car payments, and no debt..and on a dual income? Maybe I should switch career paths…
Unrealtor #3
LOL! Nothing to see here… move along.
tbw, #4
They don’t have the same spending habits that you do. If live in 10 deep in a 2 bedroom apartment and all 2 jobs and don’t have where to stash their cash. there is nothing unusual for 3 brothers married to buy a one family house. This is what you are dealing with.
Steps to address lending problems that led to a jump in U.S. mortgage delinquencies should curb abusive practices but not choke off all loans to borrowers with weak credit
1)Eliminate no-docs loans. These are either used by borrows to
a. lie about their income level to borrow more than they can afford to repay or;
b.are used by a borrowers who want to hide income from the IRS, but want to buy a home that their tax return would indicate they couldn’t afford.
2)Require borrowers to have sufficient income to make the payments and not just the teaser payments in the beginning (this will require #1)
3)Let the free market do the rest.
I have to disagree with that article.
1. On my street in Pompton plains there have been 4 houses on the same block for sale for nearly a year. Nothing that I see is Selling!
2. Visiting a client of mine was telling me he personally knows people who have bought a house and can only afford to furnish one or two rooms. He says alot of them are in forclosers.( He doesnt even work in the business) I think its alot worse than this article states. Its bad now and it is going to get worse.
Interesting take on housing as an investment…
http://news.yahoo.com/s/fool/20070518/bs_fool_fool/117951154741;_ylt=AotXK5diTh7F2QGAEn4TF.ayBhIF
#8: and that is illegal housing and that can be reported to the municipality as it creates a fire hazard and strain on the tax payer.
I could use some advice here
My wife’s parents are getting divorced. They are talking about selling us their house (3br, 2ba, Bergen County, Excellent Condition). Similar homes are asking between $430 – $450, but aren’t really moving. They would sell it to us for $300k, with an agreement that we would split any profits when we eventually sell (Although I’m not convinced there will be any profit by the time we sell, but I don’t expect to be upside down either).
We would probably want to stay for about 7 years, although we wouldn’t need to move. The town has good schools and the house is big enough for a family of 4.
Any thoughts?
Also, would there be tax implications to buying this house for 30% less than fair market value?
I’m going to Vegas this fall. If I don’t win should the government bail me out?
http://housingpanic.blogspot.com/2007/05/housingpanic-stupid-question-of-day_21.html
Mortgage lenders get creative
Rising competition is forcing mortgage sellers to generate new products to win customers.
Following the subprime mortgage market collapse, new loans are down, and lenders are turning back to safer – but less profitable – offerings. But with tougher competition and a shrinking market they’re getting a little more creative.
With as many as 2.4 million subprime mortgage loans in trouble, the percentage of all mortgage loans labeled as subprime – made to borrowers with FICO credit scores of under 620 – has declined by about 50 percent from its peak, according to the National Association of Mortgage Brokers.
More at: http://money.cnn.com/2007/05/21/real_estate/new_mortgage_products/index.htm?cnn=yes
The guy from Otteau is dead wrong on inventory, I wish there was only 65K houses on the market, the current inventory in NJ is 95K or about 12 months. Check Realtor.com if you don’t believe me.
#13 – there should be no tax implications
#13 rent: Not to be too personal, but aren’t your in laws a little old to be getting divorced; its kind of sad.
From Forbes:
Bank Groups Issue Mortgage Reform Ideas
Banking industry trade groups Monday endorsed mortgage reform principles as the troubled market for high-risk home loans worsens and Congress ponders whether to intervene.
The statement from five industry groups says lenders are already stepping up efforts to assist borrowers who face default or foreclosure and emphasizes that lenders are voluntarily tightening loan standards.
Any legislation or new regulations should focus on lenders only being permitted to issue high-risk, home loans – if they “reasonably believe” at the time the loan is made that borrowers have the ability to repay, the statement said.
Mortgage terms should be “clearly disclosed” to consumers, and estimates of monthly payments that could quickly jump in later years should be made clearer, the groups said.
The statement came from Financial Services Roundtable, American Bankers Association, Mortgage Bankers Association, Consumer Bankers Association and America’s Community Bankers.
Any legislation or new regulations should focus on lenders only being permitted to issue high-risk, home loans – if they “reasonably believe” at the time the loan is made that borrowers have the ability to repay, the statement said.
Sounds very wishy-washy (maybe fishy is a better word) to me..
jb
#21 JB So prior to this new and improved standard, they did not believe that the borrower could reasonably be expected to have the ability toi repay?
From Bloomberg:
NetBank Agrees to Sell Assets at a Loss to EverBank
NetBank Inc., the self-described “pioneer” Internet bank based in Atlanta, agreed to sell some assets at a discount to EverBank Financial Corp. after federal regulators expressed doubts about the company’s fiscal health. The shares lost as much as half their value.
NetBank will sell loans it was holding as investments, all of the assets and liabilities of its small-business equipment- leasing and financing unit, $2.5 billion in deposits, and the NetBank brand, the company said in a statement. The sale will result in a loss of $60 million to $70 million, it said.
Regulators have grown “increasingly concerned” about NetBank’s capital level and losses and advised the company’s management to “find an alternative immediately” to cover its deposit obligations, the statement said. NetBank blamed increased competition for mortgages, and a cash crunch in retail banking caused in part by higher borrowing costs. After a year of “extreme financial pressure,” NetBank said it’s evaluating strategic alternatives for the remaining assets.
“The company isn’t done, but it’s close,” said Christopher Marinac, an analyst at FIG Partners LLC in Atlanta, who is dropping coverage of NetBank as of today. “It’s a very unfortunate casualty of the mortgage market because the deposits at this company have been rock solid for the last three years.”
…
Shares of NetBank, founded in 1996, sold for more than $78 in 1999 adjusted for splits during the height of the Internet boom. They dropped to 91 cents today as of 1:06 p.m. New York time, down 84 cents, in Nasdaq Stock Market trading.
#13 rent: Not to be too personal, but aren’t your in laws a little old to be getting divorced; its kind of sad.
It is very sad. My wife is devastated, especially with the new baby and the realization that she will never know her grandparents as being together. The holidays, first birthday etc. will likely be pretty rough. We may actually turn down the offer just because it might feel to awkward moving into their old home, even if it is a good deal. I also don’t want to take any money out of their pocket during such a vulnerable time. They seem like they really want us to have the place though.
Divorce is more common than you may think at that age. Kids leave home and get married and all of the sudden it’s just the 2 of you. Without the kids occupying your attention, you really start getting on each other’s nerves. Also, whereas you might have suppressed problems in the past for the sake of the kids and keeping the family together, putting up with a unhappy situation for the sake if the kids is no longer a driver to keeping you together.
From NJ.com:
Court: Meadowlands must provide affordable housing
A state appeals court today ruled that, like towns, state agencies have a constitutional obligation to provide affordable housing where they are responsible for planning and zoning.
The ruling is against the New Jersey Meadowlands Commission, which wants to add 56,000 jobs to the Meadowlands without, critics argued, providing affordable housing for new workers. The decision is in response to an appeal brought by the New Jersey Builders Association and the non-profit Fair Share Housing Center.
A three-judge panel found the Meadowlands Commission “frustrates legislative policy and violates the state constitution.” It also found state agencies with a role in housing have a constitutional obligation to take “affirmative steps to ensure adequate affordable housing.”
The Meadowlands Commission argued it did not have an obligation to plan and zone for affordable housing in the 14-town district it covers. Rejecting that argument, the court found when “the state entrusts one of its agencies with complete control over the planning and zoning for affordable housing of a vast amount of land, approximately 21,000 acres, that agency is not free to “exercise its authority without taking affirmative steps to ensure adequate affordable housing.”
“This is a great victory for the hundreds of thousands of families who can’t afford New Jersey’s expensive housing market,” said Kevin D. Walsh, the attorney who argued the appeal for the Fair Share Housing Center. “Housing that is being built in the Meadowlands is close to jobs and transportation. If police officers, janitors, waitresses, and secretaries can work in the many office parks and malls being built in the Meadowlands, they should be able to live there with their families. This has been the law in New Jersey since 1975 and it shouldn’t have taken a lawsuit to make the Meadowlands Commission meet its clear legal obligations.”
#24 I guess so, but then the kids may start to realize that your being “happily married” was a farce for a long time, maybe even from the begining.
This would cause “ths kids” to become very cynical, I would think.
I guess it comes down to which is better, a friendly divorce earlier on (if possible), or staying together for years for the kids sake only to get divorced later on.
Either way a sad situation.
Good luck to you and your wife.
Sorry about your in laws Renting. Hubby’s parents divorced after 25 years of marriage and as an adult, it’s a totally bizarre thing because you understand much better what’s involved (as a kid, it’s traumatic, but not having gone through adult relationships, you’re not quite as aware of the implications).
Make sure they understand the implications to their finances of selling to you. I’m like you – I would probably also feel bad. It’s a great deal, and nice to live in your own house, but divorce lawyers are costly, and housing for 2 separate people starting out again after so long is also costly. They may not be thinking straight (although maybe they totally are – even if they have problems, it doesn’t mean they don’t want the best for their kid and grandkids). Good luck.
1. On my street in Pompton plains there have been 4 houses on the same block for sale for nearly a year. Nothing that I see is Selling!
Tim:
I’m from Pequannock, which block are you speaking of? There’s a flurry of homes on Boulevard that have been sitting for months. The one flag lot (next to the elementary school, the house behind the other house) has been on the market for over 2 years now. About a block away, there’s 3 homes for sale, 2 right next to eachother and one right across the streeet.
Selection, selection, selection!
-Richie
From the AP:
S&P Predicts Alt-A RMBS Slowdown
Standard & Poor’s on Monday predicted banks will rein in their sales of bonds backed by pools of so-called “Alt-A” home loans, as investors begin shying away from risky mortgage debt.
Alt-A loans are home loans that do not require the borrower to document his or her income. These loans are generally considered riskier than the safest types of debt, but safer than “subprime” debt, or loans made to people with bad credit.
S&P said it rated $100 billion of Alt-A mortgage-backed bonds during the first quarter, a 4.6 percent slowdown from the fourth quarter. Mortgage-backed bond issuance typically slips in the seasonally-slower first quarter, S&P said.
…
While the credit quality of Alt-A debt remains strong, demand in the capital markets for Alt-A is shrinking, S&P said. Mounting payment defaults among subprime borrowers have scared investors away from mortgage debt carrying any type of risk.
Richie,
Have you seen the spec house across from the high school? Pretty nice house, but been sitting there forever now.
http://www.cnn.com/2007/US/05/09/divorce.billboard.ap/index.html
Life is too short. Get a divorce.
Thanks for all the FREE baloons this weekend flipperheads. I like cutting them off the signs for my kid to enjoy!
Renting (13)-
Run for the hills. A “share of the profits” when you sell? No thanks. Better- if you’re going to do this- to just pay today’s market value.
Run for the hills. A “share of the profits” when you sell? No thanks. Better- if you’re going to do this- to just pay today’s market value.
Why do think this?
I look at it this way. I pay $300k for a place worth $400k (very low end estimate).
– If the market stays flat and I sell for $400k, I pay $50k and walk away with a $50k profit. If I pay fair market value, I walk away with no profit.
– If the value drops to $300k by the time I sell, no profit gets shared. I walk away with my down payment plus any equity built. If I pay fair market value, I lose $100k
– The only time I mathematically wouldn’t make out, is if the place goes over $500k. That is the tipping point where I would be better paying $400k and keeping 100% of the profits. I see this as highly improbable over the next 7 years.
I honestly wouldn’t pay “fair market value” today. I would rather just keep renting. For this very reason, however, I feel bad about buying from them at a discount. I personally think they should sell it and get what they can get.
Am I missing something here?
renting,
Tough situation b/c of two issues are involved: (1) money & (2) emotions. With family that often pretty much is guaranteed to lead to some awkwardness at some point in time. Nobody here can make the decision but some things to think about that only you & your wife can answer together.
Let us say for a moment that instead of divorcing, they were downsizing and offering the same thing to you, would you take it?
What if you don’t take the house they have offered and it languishes on the market and maybe (probably unlikely but still) doesn’t sell at 300k either. How would you feel? Do they have the $$ to deal with it not selling? BTW, are they both thinking of buying smaller places or renting? Also, if you sell for a profit, do you share with both, just your FIL, just your MIL, all that will probably have to be settled in thei divorce/property settlement agreement. Do you want to be involved with “their divorce” until you sell the house? I am not being facetious here, but I think “dr. phil” would say, keeping the house in the family is one way for them to stay “married” and connected in some way.
Do you like their house? If you take it, you may be “stuck” in it for the duration, a possibility to think about.
Good luck to you.
How, exactly, is this deal being structured so that everyone’s share of ownership is protected, taxes are properly distributed and paid upon sale, and you are eligible for deductions you take during your time of ownership ?
jb
From MarketWatch:
Bankers call for subprime lending standards
Banking and financial services trade groups urged federal regulators on Monday to establish a uniform standard for both banks and non-banks that make loans to customers with blemished credit records.
In a joint statement about responsible subprime lending, groups including the American Bankers Association and the Mortgage Bankers Association said lenders should make only subprime home loans to consumers that can repay them and that terms and features of loans should be disclosed clearly to consumers.
“A national uniform standard should provide fair and consistent application to both bank and non-bank mortgage lenders,” said the statement, which also was signed by America’s Community Bankers, the Consumer Bankers Association, the Financial Services Roundtable and the Roundtable’s Housing Policy Council.
As interest rates have climbed and house prices stopped rising, subprime delinquencies have jumped in the U.S., spurring congressional proposals to aid borrowers and tighten rules on lenders.
Neither recently proposed federal subprime-loan guidance nor nontraditional mortgage guidance apply to non-bank lenders.
Rent (33)-
I don’t like deals like this, because:
1. The average real estate bust in the US- post WWII- is about 47 months. We’re a good 20-24 months into this one. In 7 years, I’d bet you a substantial amount of money we’ll be back on a big upswing. Which leads me to:
2. If you sell during a big upswing, how much of the profit you pay your in-laws will be “excessive” profit? If this house goes up-and-over 500K, how will you feel about having had an equity partner with no skin in the game during your time in the home? If you’re ok with that, and feel the opportunity is worth the eventual downside risk for you, then go right ahead. However, I’ve seen a lot of so-called “simple” deals like this turn into all-out family battle royals.
There’s no shortage of worst-case-scenario planning around this board. All I’m saying is, do some best-case planning, too. This is a boom/bust business, and you should be prepared for extreme things happening.
Because they do.
7 years is a long time, think about what happened to prices from 1999 to 2006. Maybe put a cap on the profit sharing, if the house is worth $425 today, give them up to $500 (conveniently your tipping point). Just in case you end up staying longer and the house doubles to $800K or something.
It’s hard to mix business when you’re dealing with family, so I would make sure everything is clear as day before you agree. Even put it in writing so when they grow old and forget, you can remind them of what you agreed to.
Alternatively, buy today, sell tomorrow for $400K and keep $50K, now that’s a good IRR.
What about $ put into the house? If you install central AC and increase the value of the house, how does that work?
Rent (33)-
And, if you do this, I’d have the in-laws express that 100K discount in the form of some sort of note, with nominal payments until your sale of the home, which would trigger a balloon payment of some sort.
Renting- Any marital property settlement professional (notice how diplomatically I phrased that today) would be all over that deal.
Belly up to the bar, boys, we got us a fee machine.
Thanks for all the advice. At this point I’m leaning toward taking a pass. I just don’t like mixing family & business. Plus, there are too many emotions involved with a home.
This was a really good post by shytown:
“To be clear: the UAW treated Chrysler differently than Ford & GM. Ford and GM were in trouble, so the UAW recognized the risk of their pensions and retiree healthcare benefits being renegotiated. In Daimler, the UAW assumed that they had a deep pocketed and unlimited supply of funds, so they held Daimler up. Little did they realize that they reap what they sow.
Unions? Go ask the people in the following U.S. industries what they think of Unions: steel, airlines, railroads, telecommunications.
You want the real villians?: any company that attempts to shirk its responsibility to provide appropriate healthcare benefits for its workers.
Why? Wellness programs and preventative healthcare is FAR more important and economically efficient than treating the sick and infirmed. People WILL be treated. Either Wal-Mart pays for it, or John Q. Public. Wal-Mart is ripping us off”
SAS
check out this report from Long Island from a guy who seems like a realtor.
see 20th May post
http://www.urbandigs.com/
“Specifically, Suffolk County about 50 minutes east from Manhattan. I was visiting family today, who happen to be selling their house right now, and let me tell you how insane it is in terms of the # of For Sale signs there are. Almost every street off the main street had a ‘OPEN HOUSE THIS WAY’ sign trying to lure passing drivers down the road. I couldn’t even count how many homes I noticed for sale in the area around Commack, Dix Hills, Melville, & Huntington. If this is any indication how it is in markets around the country, we have some serious fundamental issues that need ironing out before any nation wide housing bottom will be found.”
will you feel about having had an equity partner with no skin in the game during your time in the home?
You make some good points and I’m probably going to pass.
However, from a purely academic point of view, they really do have skin in the game. They are going to forgo $100k in potential profits. Essentially, what we would be doing is selling them a call option for $100k for 50% of the house with a strike price of $300k. Of course, we would be the ones exercising the option on their behalf.
Maybe put a cap on the profit sharing, if the house is worth $425 today, give them up to $500 (conveniently your tipping point).
Cap might not be a bad idea. However, it seems fair that if they are essentially giving us $100k in equity, they should have some upside potential to the deal.
if the house is worth $425 today, give them up to $500 (conveniently your tipping point).
Upon further review, the tipping point is actually higher than that. Buying the house for $400k (an extras $100k) would require spending $30k over 7 year in interest (after tax deductions) to carry the additional debt. This pushes the break-even closer to $560k. This also doesn’t account for discounting, which would push the tipping point higher.
7 years is a long time, think about what happened to prices from 1999 to 2006.
I doubt we’ll ever see that again in our lifetimes.
It’s a good point though. Essentially, I would be taking a risk. Given that I’m a housing bear though and I believe that prices will fall, this might be a unique opportunity to hedge my downside risk. The cost of this hedge is giving up some upside potential. However, based on historic precedent, I think that prices will fall for another 2 years (but still overpriced) followed by years of stagnation.
Again, looking at this academically, if prices fall, I’ve successfully hedged some of my my downside risk by taking the $100k. If prices rise, I win by virtue of the fact that I’m a homeowner. I just give up some of the upside.
What about $ put into the house? If you install central AC and increase the value of the house, how does that work?
Good point. This would have to be considered.
As someone who once made a deal with my mother to buy her family house, I say definitely give it a pass. As you’ve said, you’re nervous about mixing business with family, and your posts have made it clear that everyone’s too emotional now to be making sound financial decisions. (Except, perhaps, to remember not to mix business with family.)
That said, and one thing that no one’s mentioned, before your inlaws sell you this house, they’re going to have to get it appraised, both as part of working out their financial separation and as part of doing their taxes. This appraisal will then be treated as the true value of the house, and if they sell it to you for, say, a hundred thousand less than that, I believe there might be some kind of gift tax involved.
Just to clarify: if the inlaws sold the house on the open market, there wouldn’t need to be an appraisal, because the arm’s-length transaction would set the value.
Overblown?
This turtle head is just peeking out… it is going to take a couple of more years on the throne to get finished!
#37 Clot: I really do not think NJ is going to be on a big upswing 7 years from now. Of course 7 years is a long way out. But when you look at everything going on in NJ, in its totality, I just do not see it.
I see a once great and proud state, in a perpetual state of decline
#43 – I have my townhouse on the market and it is terrible. I am in Central Jersey, it is the SAME way. There are 5 townhouses for sale on my block. 3 just in my unit (8 THs). It looks so STUPID, one For sale sign after the other. We are pulling our TH off the market at the end of the week, we listed at $339,000 in March (we knew was to high) lowered twice down to $325,000. We have crazy taxes of $6100, (reassessed in 2005, Mo$#@r F%^@#rs) and we “might” get an offer the week for $285,000!!! We are just sick and completely stressed out. So we decided to throw in the towel until these other people sell.
The other townhouses are listing from $319 – 344…..
My blood pressure can’t take it, fortunately we were able to back out of the house purchase last month, Thank God we had followed our gut and said “I don’t think we are going to sell that fast. Maybe we should wait….”
Now we say, you know this place isn’t so bad.
…preserving incentives for responsible subprime lenders…
Isn’t this an oxymoron? How is it “responsible” to issue mortgages to people with poor credit? Or am I missing something?
#49 Maybe you should take the 285k
As evidence, HSBC reports that people with more than $250,000 in household income, who constitute the top 1.5% of U.S. households, report facing many obstacles when it comes to saving. Indeed when HSBC asked what prevents them from saving more, the top answer was the need to pay everyday bills, with 34% of respondents of those who earn more than $250,000 concurring.
The savings rate in the United States dipped to zero in 2005 and has even fallen into negative territory, the first time since the Great Depression.
Financial advisers recommend that people keep three to six months or more of income in a savings account, depending on their financial circumstance. But when people don’t save, and overspend in addition, a precarious financial circumstance evolves where even the slightest snafu in expenses can send them into defaults and bankruptcy.
Over the past two years, default rates on debt payments and bankruptcy rates have soared. Most recently, mortgage foreclosures have skyrocketed.
Funny, this guy is totally wrong about essex where prices have shed 30-50K since last year.
Hey Richie,
Your nearly my neighbor, those are the exact houses I was talking about.