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#81
April 13th 05, 04:48 AM
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"The Wogster" wrote in message
.. . Prices in the valley still that high, I thought real estate there would have collapsed, when all the IT jobs moved to Kowloon and Bangalore..... Rents have collapsed, but houses/condos continued to increase in price for several years, at double-digit percentages. The housing market has just started to soften in the past month or so, but the fall in prices is only expected to be 20% or so. My house has only gone up 70% in "value" in the past six years. What's funny is to hear people complain that they're going to "lose money" now that the prices are softening. So they could have sold for 2x what they paid, and now they'll be able to sell for only 1.8x what the paid, and somehow they equate this to a loss of 20%. As the Economist recently pointed out, there are some areas where it makes much more sense to be renting, and Northern California is one of those places, since a burst in the bubble is inevitable. 
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#82
April 13th 05, 02:32 PM
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Steven M. Scharf wrote:
"The Wogster" wrote in message .. . Prices in the valley still that high, I thought real estate there would have collapsed, when all the IT jobs moved to Kowloon and Bangalore..... Rents have collapsed, but houses/condos continued to increase in price for several years, at double-digit percentages. The housing market has just started to soften in the past month or so, but the fall in prices is only expected to be 20% or so. My house has only gone up 70% in "value" in the past six years. What's funny is to hear people complain that they're going to "lose money" now that the prices are softening. So they could have sold for 2x what they paid, and now they'll be able to sell for only 1.8x what the paid, and somehow they equate this to a loss of 20%. That is funny.... It's a house, not a stock, people forget that they got to live there, virtually for free..... As the Economist recently pointed out, there are some areas where it makes much more sense to be renting, and Northern California is one of those places, since a burst in the bubble is inevitable. Expect that when it does that there will be a lot of walk-a-ways. When you have a $300,000 mortgage on a $100,000 house, it makes more sense to move back to Cow Patty, North Dakota, and let the bank have the California house, which they will sell off. You can easily sue one walk-a-way but you can't sue 5 million of them, especially when they are all out of state. W
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#83
April 13th 05, 04:11 PM
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"The Wogster" wrote in message
.. . As the Economist recently pointed out, there are some areas where it makes much more sense to be renting, and Northern California is one of those places, since a burst in the bubble is inevitable. Expect that when it does that there will be a lot of walk-a-ways. Yes, this will happen, but the changes that the Republicans have pushed through in the bankruptcy laws may limit this somewhat. It's only the people that have purchased houses in the past two years or so, with very little down payment, and perhaps with an ARM or balloon mortgage, and few other assets that will benefit by walking away. Many of these people had to get PMI, so the mortgage lender isn't going to lose out, though the PMI insurance company will. There are other repercussions of the bubble bursting as well. Property tax revenue will plunge, resulting in less money for schools. Eventually California is going to have to address the biggest issue affecting its revenue stream, and the biggest inequity in taxation, proposition 13. Warren Buffet brought it up to governator, but politician are terrified to bring up the issue. Whenever the rent for a property is 1/3 what the mortgage payment would be for the same property (with a 20% down payment), you know that something's gotta give. This is the time for people that are cashing out of bay area real estate, and moving on, to do so--quickly.
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#84
April 13th 05, 07:14 PM
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Steven M. Scharf wrote:
"The Wogster" wrote in message .. . As the Economist recently pointed out, there are some areas where it makes much more sense to be renting, and Northern California is one of those places, since a burst in the bubble is inevitable. Expect that when it does that there will be a lot of walk-a-ways. Yes, this will happen, but the changes that the Republicans have pushed through in the bankruptcy laws may limit this somewhat. It's only the people that have purchased houses in the past two years or so, with very little down payment, and perhaps with an ARM or balloon mortgage, and few other assets that will benefit by walking away. Many of these people had to get PMI, so the mortgage lender isn't going to lose out, though the PMI insurance company will. This happened in Alberta, Canada in the 1980's, in the 1970's the petroleum industry thinking that Arab oil was going to disappear, and Eastern Canada would freeze it's fat butt off, hired like crazy for the oil sands project. When the Arabs got over their issues and turned the pipes back on, the petroleum industry almost completely bailed -- due to the cost of extracting oil from sand, A house that cost $450,000 one day was worth $45,000 the next. So all those workers from Ontario, with no job and a $350,000 mortgage, simply dropped the keys into the mail to the bank, and went back to Ontario. It nearly bankrupted the CMHC which was the mortgage insurer of choice, funny thing is, many of those people since, have bought houses in Ontario with mortgages at the same banks, insured by the same CMHC! The only things that saved the CMHC was the fact it's a crown corporation (technically a corporation "owned" by the government), so the government could in fact bail it out, and secondly it's national in scope, and when it loses money in one area, it makes it up in another. There are other repercussions of the bubble bursting as well. Property tax revenue will plunge, resulting in less money for schools. Eventually California is going to have to address the biggest issue affecting its revenue stream, and the biggest inequity in taxation, proposition 13. Warren Buffet brought it up to governator, but politician are terrified to bring up the issue. Here in Ontario Canada, it used to be really weird, a provincial government department was responsible for determining property values for municipal taxes. The city could set whatever rate they wanted, but the province set the values. The problem was the province used a formula, say 2.5% per year. So a house built in 1946 and assessed at $2750 was valued in 1995 at $9,200. A brand new house in 1995 was assessed at it's selling price of $150,000. Which meant an old house in downtown Toronto was paying tax based on a value of $9,200, even though you couldn't buy it for less then $175,000. The government then went to real values, but it had to be implemented over time, imaging a mill rate of 4%, one year you paid $368 and the next the bill was for $7,000! The province monkeyed with the whole process for years, I think they still are monkeying with it. Then they discovered downloading, the Feds would tell the provinces they were now responsible for looking after the cost of certain programs, the provinces promptly downloaded on the municipalities, whatever they didn't want to pay for. Typically you would download the most expensive program you could. The municipalities got into it too, they downloaded onto the taxpayer. So for example where you could go to the Moose Nostril pool for free one year, and park in the pool lot, they would charge $5 a day the next year, and $1/hour for parking at the pool parking area..... Of course the provinces saw that this was working for the municipalities, so they got into it to. W Whenever the rent for a property is 1/3 what the mortgage payment would be for the same property (with a 20% down payment), you know that something's gotta give. This is the time for people that are cashing out of bay area real estate, and moving on, to do so--quickly.
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#85
April 14th 05, 03:24 AM
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"The Wogster" wrote in message
.. . This happened in Alberta, Canada in the 1980's, in the 1970's the petroleum industry thinking that Arab oil was going to disappear, and Eastern Canada would freeze it's fat butt off, hired like crazy for the oil sands project. When the Arabs got over their issues and turned the pipes back on, the petroleum industry almost completely bailed -- due to the cost of extracting oil from sand, A house that cost $450,000 one day was worth $45,000 the next. So all those workers from Ontario, with no job and a $350,000 mortgage, simply dropped the keys into the mail to the bank, and went back to Ontario. Reminds me of the S&L scandal in the U.S. Since the S&Ls were government insured, the weaker ones would offer very high savings rates to attract deposits, and pay the officers of the company very high salaries. When they could no longer pay depositers, they simply folded, and the government had to bail them out. The executives got to keep all the money of course. This part of the Reagan revolution committment to de-regulation. Bush Sr. inherited all the horrible results of the Reagan presidency, the runaway deficits, the bank failures, etc., and actually did an okay job of helping the country recover from the Reagan excesses... but he couldn't talk about it, because Reagan was too sacred for Bush to tell the truth about him.
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#87
April 15th 05, 02:48 PM
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Joshua Putnam wrote:
In article . net, says... It's only the people that have purchased houses in the past two years or so, with very little down payment, and perhaps with an ARM or balloon mortgage, and few other assets that will benefit by walking away. Many of these people had to get PMI, so the mortgage lender isn't going to lose out, though the PMI insurance company will. Unfortunately, it could also hit large numbers of people who got caught up in the cash-out refinance binge a few years ago, and people who have run up home equity lines of credit that will allow 100% loan-to-value without PMI. Even among recent purchasers, many have split mortgages 80/20 to avoid PMI -- you can buy a house with zero-down on an interest- only loan with no PMI, some flexible payment loans even allow negative amortization payments. I don't know how to explain lenders' apetite for risk unless it's simply that they know Things Will Be Different This Time. In Canada, you need mortgage insurance, whenever the total loan is worth more then 80% of the property value. It used to be, you needed at least 5% in cash (certified cheque usually). They changed the rules though, I guess a year ago, if you had other credit available, say an unsecured $20,000 line of credit, you could use some of that to make your down payment. I think they found that people were doing so anyway. If you had a line of credit, you simply wrote a cheque to yourself. Walk across the street to another bank, open an account, and deposit the cheque. Now wait for the cheque to clear, and then write a certified cheque to make your down payment. It really comes down to, what the financial institution thinks your good for, if your pulling in $40,000 a year and your S.O. is pulling in $40,000 a year, then you should be good for a $2,200 a month mortgage payment. They use various calculations to determine what your credit load can be, and as long as what you owe is less then that, and property values hold up, then that has worked for hundreds of years. The more recent problem is two income families, where one loses a job, and can't get new employment, and then housing prices temporarily drop significantly. Something that has happened more then once in the last 30 years in different areas. W
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#88
April 19th 05, 08:19 PM
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On 8 Apr 2005 17:34:05 -0700, "bikeguy11968"
wrote in message . com: Montana Moves to Ban Drinking Behind Wheel Need I say more? that and the whole optional seatbelt thing.. Someone please protect us from the stupidity of others. http://www.eirbyte.com/gcc/info/seat_belts.html Guy -- May contain traces of irony. Contents liable to settle after posting. http://www.chapmancentral.co.uk 85% of helmet statistics are made up, 69% of them at CHS, Puget Sound
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