| where is the housing market really going??? |
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elpasogtr
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| where is the housing market really going??? |
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I have a friend that is a mortgage agent and he says the market is doomed. He says that almost no one can get or afford a loan. the only loans that are being given are for very small mortgages. Most people require up to 20% down, need 3-6 months of capital. Yeah this is the way it should be but lets be honest 95% of americans will never be in this financial situation. He says that when ever you hear some bs line about house values going up that is just the local realtor/ mortgage association trying to trick people into thinking it is a good time or safe to buy again. what is gonna happen with interest rates ect. I think it will be harder and harder to sell your house. It may also be harder to buy a new one. Will property values fall. Will they hold their value just becasue of the devaluation of the dollar.
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Tue Jan 26, 2010 11:01 pm |
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oldguy
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quote:
Will they hold their value just becasue of the devaluation of the dollar.
The land, and most of the materials, and all of the labor that results in a house is from local sources, only a little comes from outside of the country. So the devaluation of the dollar doesn't affect it. (When the dollar devaluates relative to world currencies, the price of foreign goods goes up.)
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only loans that are being given are for very small mortgages.
Most lenders won't go below $100,000 now - I hadn't heard that they avoided large loans.
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Yeah this is the way it should be but lets be honest 95% of americans will never be in this financial situation.
I would guess that closer to 50% are already in that situation. Twenty-five years ago the constraints were as you describe - 20% Down, etc - and way over 50% of the people were home owners.
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Tue Jan 26, 2010 11:45 pm |
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elpasogtr
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what about the fact that less people will be able to afford their mortgages. especially if the price of consumer goods increase, taxation increases and interest rates on those mortgages increase. Unemployent is high and may continue to increase forcing more and more people out of their mortgages. This is probally where we are heading. Please correct me if im wrong. Please!!!!!
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Wed Jan 27, 2010 12:01 am |
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C9Consulting
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I believe like with everything in capitalism...the mortgage market will come back, slowly, but it will come back in the next few years.
Think of it this way if the DOW in its hey dey was at 14k. And the real estate market was just as high. Now look at the prices and watch how they go hand in hand with each other back to the top. If I had the money, I would be buying up properties like I was the banker in Monopoly.
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Wed Jan 27, 2010 12:05 am |
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oldguy
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what about the fact that less people will be able to afford their mortgages. especially if the price of consumer goods increase, taxation increases and interest rates on those mortgages increase. Unemployent is high and may continue to increase forcing more and more people out of their mortgages.
Well, we have done all of the things on your list several times since 1960 during the time that I have been an investor, wage earner, landlord. And many of us have prospered in spite of your list of worries.
You can use most of these trends to your advantage - eg, right now mortgagae rates are at a 50-yr low, so I refi my houses and get fixed rate 30-yr loans on my houses. With stocks - buy low, sell high - I don't actually recommend selling, I buy and keep forever. The 'reversion to the mean' theory has served well for 75 yrs, you just need to have the patience to wait.
As for taxation - during the 1970's when my marginal rate was close to 70% (Jimmy Carter?), I bought rental houses and mortgaged them to the limit - that way my houses showed very little taxable income, it was all being converted to unrealized capital appreciation. And houses doubled in value at that time so the appreciation was large.
As for the price of consumer goods rising, we had hyperinflation in the 1980's - 14%/yr I think, people would grab their paycheck and run down and make a DP on a new car before the prices went up each month. But employers rushed to match the hyperinflation and retain their workers, ie they gave 7% or 8% raises twice a year plus Retention Bonuses. So inflation isn't all bad - you need to learn to use it, not defy it.
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Wed Jan 27, 2010 6:41 pm |
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Raptor
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20% down is good, it shows one can save. Try buying a rental home you'll need 40% to 50%. Banks normally like to see a 50% debt ratio for business operation, maybe less from established business.
Old Guy, are you willing to let us know what debt ratio you must stay below?
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Thu Jan 28, 2010 4:43 am |
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sebi123
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what about the fact that less people will be able to afford their mortgages. especially if the price of consumer goods increase, taxation increases and interest rates on those mortgages increase. Unemployent is high and may continue to increase forcing more and more people out of their mortgages. This is probally where we are heading. Mega movies online free|Watch Hot movies onlinePlease correct me if im wrong. Please!!!!!
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Thu Feb 18, 2010 1:12 pm |
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