Home ownership will soon be at 2000 levels, too...

Agree!

The great "wealth boom" of GW and the neoCONs has been exposed. Stock market has done nothing in 10 years, home prices are dropping everyday and wages are down from where they were in 2000. Only the top 99.99% have done well under this corrupt administration.

 Buying property is still a good way to make money.  The problem is that many buyers look for quick increases in their investment. Time is the key.  Over a period of ten to twenty years property will make money. True in the past and true now.

 Roy - thanks for the comic relief!

 "growing sales for discounted homes fresh out of foreclosure"

False...Yes there are sales in the foreclosure market but the rate of sales to the rate of incoming foreclosures is declining due to restricted financing and a smaller pool of willing wise buyers plus the "Prey" foreclosed owners are out of the buying pool for 3 years. The main worry is that the amount of foreclosed homes coming into the market is not the same rate of foreclosures coming in to the lenders. The lenders regulate the amount coming to market to keep a "flood" effect from hurting the market more, And the amount of ARM resets is going to rise every month for at least 1-2 yrs as the ARM`s today are only coming from the 2005-6 loans, The big ones in the "Prime Predator Period" 2006-7 will not come due until 2009-10.  

 Roy Funny

 I agree with Roy.  I was around for a depressed real estate market in the early 90's that was on the downside of a slight boom.   Bought some property that had lost considerable value. Sold some in a few years and did OK.  Held some and did well on rental income.  The formula for making money on real estate is very simple.  The market is getting closer to that point.  But then I only know what has worked for me.  The only time I did poorly was when I sold a great property after having it for less than two years.  It's a very different market now but for investors with some cash it's looking better every month.

 So, anyone still predicting the market will stabilize at 2004 levels?

" Based on history, values will come back and that now is a good time to buy " - Just as good of advice today as it was 4 months ago!!!  How far behing would you be today if you had bought 4 months ago?

"It's a very different market now but for investors with some cash it's looking better every month." and it will look VERY good 24 months from now, Why buy a unit that was sold for 339k in dec 2007, came on the market yesterday for 149k and had 3 units with in 2 blocks that were foreclosures with a asking price of 129k and have been on the market for 83 and 126 days each. There will be flood of homes in that area coming on the market within a 9-18 month period and as there was a flood of purchases there in the end of 2006 early 2007, those units will not come on to the market at a higher price than the unsold units there already,

"they are not making anymore land"

There's plenty of open land in this valley - and there always will be - but real estate prices even fell in San Diego, where there really is no more land for developing. Any new buildings there are of the vertical variety.

All lies and all of which are American Dreams!

All of which are American Gambles. Any investment is a gamble, whether it's a Pick Six, a house for your family, or one to flip for a profit so you can act like a big shot. There's an old saying: If you want a guarantee, go to Midas.

 hold on to it and it will, historically home prices do go up over time. Though I doubt they will raise as fast as they did from 1999 -  2005. Normally I believe houses increased in value roughly at the rate of 3% per year.

But if you have lost 20-30% in the first few months after you buy a unit, you are upside down before you start, and to catch up it takes much longer than the usual 7 years of ownership just to get even...

".. and all of which are American Dreams"

That is a line from a song.

 Buy Now Repost.

* By 2009 prices have come down 20%. (Ignore anyone who lives in Bakersfield World where prices never go down).

* At this point you start seeing some neighbors moving in paying 4/5 of what you did. It's a little annoying, but not terribly.

* By 2012 real prices have come down a total of 35% and now are flat, matching inflation with maybe very tiny gains here and there.

* So you're 7 years into your ownership. The average time spent by most Americans in a home. You only put 20% down, so you're at best just around break even or a small loss if you sell today. You decide, "hey we can afford our mortgage payments, so we're not losing anything".

* But then you start realizing something. You have a lot less money than your neighbors all do, even though you make the same or even a bit more than them. Your kids go to school with the children of parents who are just like you except one thing: they don't pay as much of their monthly nut to their house. Instead, they buy their kids nicer clothes, safer cars, better educations, more culturally stimulating vacations, nicer colleges, and better futures. Meanwhile, you paid your bank a lot of extra interest, and you paid the previous owners a lot of extra gains. All those people are busy buying nice college educations for their kids too.

* You retire, owning your home, preaching to your kids how somehow your life's decisions were more "righteous" and "moral" than all these other terrible people who looked out for their own well being. It never dawns on you that perhaps you were the selfish one, putting your own impatient emotional need for a house above the future betterment of your family

 I have never lost money in real estate.  I also never bought a primary residence with the expectation of making money on it.  If I bought rental property it had to have a positive cash  flow including maintenance and vacancies or it wasn't worth it.  The people that still have the "flipping" mentality are going to get burned.  I don't like to deal with renters anymore but I would advise a young person to save what they could now and in a couple of years buy all the good properties you can.  If rates stay low a positive cash flow will be possible again.  Like sf said, hold on to it. 

 Anglo1, if you bought now you would lose but you you mentioned those forgotten words " save" and " couple of years" those are words of "profit".

 I wouldn't buy now as I said, in a couple of years, maybe. The words mentioned were not forgotten they go together with sacrifice and working harder and smarter.  Difficult decisions such as losing a cell phone, premium cable TV and going to  a dial up or lose the Internet and go to a library, actually cook food yourself.  Buy used cars and pitch the credit cards.  I know these sound impossible to some but it can be done.  Priorities just need to be aligned with your goals.  Again it takes time, years and that thinking is unheard of today.

 To me that is the American Dream Murph. Buying a home you can afford and want to live in and pay it off. Not trade up every two years hoping the market never tanks. 

Four years of equity gone?  That may be true but, I bet if you bough 4 years ago you are not upside down, unless you refinanced.  You have also had a place to live for 4 years, wrote the interest, taxes and insurance off.  So how bad is it really.

The ones that got hurt are the ones that bought what they could not afford and planned to dump it quick as soon as the price went up.  Roy is right about the long haul.  I have rentals that I have owned for years.  Until the recent boom they were never worth more than they were bought for.  We are talking one of them for 21 years.  They now have equity.  In fact the price has doubled.  Never planned on getting rich off of them, just to enjoy the income in later years.

I bought my primary residence 4 years and 4 months ago.  I put approximately $75K cash into upgrades.  I would realize a small loss if I sold.  In the meantime I have a house that has almost everything I want and a small mortgage payment.  Who cares what it is worth if I don't plan on selling.

Real estate is a long haul investment not for the get rick quick.

 There are now approximately 30,000 homes underwater in Bakersfield! Good luck suckers.

There will be no bottom until we wash all of these people out. They were sucked in by the lies from the REIC (commision clowns). Prices still have a way to go before we bottom out, soon we will have close to 40,000 homes underwater. That is more homes underwater than during Hurricane Katrina!

 "That may be true but, I bet if you bough 4 years ago you are not upside down"

"I bought my primary residence 4 years and 4 months ago.  .  I would realize a small loss if I sold."

LMFAO!!

Does that even make sense??

 I predicted this stage a long time ago.

We washed out the easy money johhny come too lately crowd first.

Then, we washed out the purchasers who "just wanted a place to live".

Now we are at the stage where we will start to take out the "real estate investors". Don't worry you too will be washed upon the shore like all the rest.

 Bakersfieldbubble - what does not make sense about my statement?.  Do you not understand that I am not upside down?  And I paid a fair price with a large down?  Yes, my house was once worth $38K but I did not lose money because I did not sell.  Maybe it was the primary residence part that got you.  Sounds like you hate real estate investors.   I own more than one house and maybe it is hard to follow that I am not upside down on those either.  Guess what.  No mortgages.  Not everyone in Bakersfield is enjoying (like you) watching the other people go down.  I personally know people that virtually have no place to go.  Not to mention that their credit is ruined.  I don't think we should dwell on others miseries because "you" predicted this situation.  

Just wanted a place to live?  Talk about what does that mean.

 Thanks Murph.  Is he always like this.  Gosh I would hate to see the world from his side. 

 vwilroy...Years ago I worked with a gal who had some money in the stock market..I dunno..mutual funds or something, stable investments.  The market took a big hit and she ran around saying how much money she had lost that day.  I asked "did you sell", and she said no.  So I asked, "how did you lose money?"   She left it alone, rode it out, and was fine.

Stock market advisors say the same thing about investing as we said about real estate... that it should be for the long haul.  The flipping that went on in the last few years is almost like a pyramid scam...only the first ones made the big bucks.

I understand what you're saying even if Bubble doesn't.  In the future, when your kids sell your estate, there will be no money lost.  Right now, it's only on paper and not out of your pocket..some just don't get that.

 ad hominem attack by Murphy - Typical!

Tell me when and where I have been wrong the last several years? NEVER!

This is the most recent list of people who listened to the parrots here - things didn't quite work out for them as you guys have laid out in your no lose scenarios:

 http://fidelitykern.com/  (click on the Kern NOD list)

 I may be missing something here, but I don't understand how "this housing thing" has made people homeless.  Where were they living BEFORE they purchased homes that they couldn't afford?  Were they homeless then?  Most likely, they, like me, were renters.  Why not go back to being a renter?

I want nothing more than to own my own home, but the way real estate values shot up immediately after my divorce, that dream immediately became out of reach.   I recently had a realtor tell me that I should buy a home.  When I told her I couldn't afford it, she said "But a $250,000 mortgage is only about $1600 a month!"  ONLY?? Good heavens!  $1600 is considerably more than half of what I take home each month!  And then there are property taxes and insurance on top of that. 

Problem is, too many people, when confronted with realtors like the one I encountered, became convinced that they really could afford those $400,000 properties.  Then the banks further convinced them, and they jumped in with both feet, and without reading the fine print, or doing the math.  How is that the bank's fault?  Or the realtor's fault?  Or the government's fault?  Granted, those banks never should have loaned the money, but the homebuyers were more, or at least equally, at fault.

At the risk of sounding hard-hearted, I'm hoping the real estate values do plummet to 2000 levels.  Then, I, and other "just plain folks" like me, will be able to afford homes.

 pamg - post of the day!

 NancyII - good to see someone gets it

Pamg - Homless is easy, how many houses are sitting empty?  Where did most of the occupents go?  Apartments.  Supply of law on demand will fill the apartments up real fast.  When they are full where do you do? 

Bakersfielbubble - don't be so nasty and critical.  Try to find something good in every situation and you will be amazed how many good things come back to you

vwilroy - you have not been following all of my comments over years. So you are a litle behind - I am doing great! better than 99% of the people in this town, this is about letting people know the commision clowns are out there to screw them over!

 Who knows, maybe thiis is a lesson that needs to be learned every 65 years or so.   When you buy a large purchase without putting anything into it yourself, you're willing to lose a lot of someone elses money. 

There are sad stories everywhere of people who bought more house than they could afford, signed for a crummy ARM loan, took equity out of their house when the market was hot, and now pay more each month than their house is worth.

The old saw is true that the X-generation wanted everything immediately.  They didn't want to buy a starter house and move their way up.  They wanted their parents standard of living as soon as they got their first credit card.

Now the rest of us will foot the bill for this mistake.   And the government will make sure that  mortgage companies do the least amount of suffering.

 Bakersfieldbubble - I will try to catch up.  I sold real estate a long long time ago for about 6 months.  It was amazing how other agents reacted when  I told clients they could not afford to buy the house they wanted. 

 U.S. Housing Starts Slide to Lowest Level in 17 Years

April 16 (Bloomberg) -- Housing starts in the U.S. dropped more than twice as much as forecast in March to a 17-year low, signaling that declining construction will keep eroding economic growth this year. Foreclosures are pushing down property values by adding to the glut of unsold homes, prompting buyers to hold out for better bargains and undermining new construction.

Home construction is probably going to continue to fall right through this year,'' Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina, said in a Bloomberg Television interview. ``While we see a bottoming in sales in 2008, we really don't see an improvement until later 2009, early 2010.''

As property values tumble and adjustable-rate mortgages reset, more Americans are walking away from their homes. Foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier, Irvine, California-based RealtyTrac Inc., a seller of default data, said April 14 in a statement.

JPMorgan Chase & Co., the third-biggest U.S. bank, said today that profit fell 50 percent in the first quarter after $5.1 billion of writedowns and provisions linked to subprime mortgages, bad home-equity loans and financing for leveraged buyouts. The company set aside $1.1 billion for future home- equity loan defaults, almost three times as much as in the fourth quarter.

http://www.bloomberg.com/ap...

We're not at the bottom of the slide yet.

Are California Mortgages "No Recourse"? Talk to an Attorney

On Trulia.com, the Real Estate Search Engine, a reader asks if mortgage loans in California are "No Recourse," meaning that once the borrower turns over the house, he or she owes the lender nothing more.

Hemet Real Estate Broker Christopher Walker answers:
 

California does not provide recourse for "purchase money" loans with only rare exceptions. Purchase money is when you are taking a loan at the time of purchase. If you have re-financed your home, taken out a HELOC or other loan after the time of purchase, your lender may have the ability to collect from you even after foreclosure. It is imparative that you seek the advice of a competent real estate attorney immediately.

 Simple Chart of financial doom coming

 Now is the time to Buy...I`m waiting until fall 2012.....Just walk away..save ..buy it back in 3 years for pennies on the dollar?... I`m just saving and cashing in ,Fall 2012.....

 "Market value" means the amount that a seller "could expect" to obtain for property or goods sold on the open market. Make sure you understand that without the word "could" before "expect", it would change the whole meaning of the term; in fact many sellers and realtors seem to interpret "market value" that way.

When a house sells, the published amount or comp value is not necessarily what the buyer paid for the house as I have already explained. On top of this, the buyer could have (most likely if bought after 2001) overpaid for the house. Many buyers who fall into this category believe that what they paid is "market value", some will even proclaim that they are selling "below market value", which is kind of silly if you think about it. Why would someone want to sell something for less than they can actually get? If they "could expect" to get a certain amount for their house, why in hell would they choose to ask for less? Simple, one word, "propaganda"; they want you to believe that you are getting a great deal so they can unload it fast. As sad and crazy as it seems, there are some people who are being taken by this.

"Market value" can only exist if the buyer who buys the property makes a rational offer on a house based on the fundamentals. This would be an amount that would appeal to many other rational buyers. The only way for that to happen is for easy money to disappear and for interest rates to return to normal; thus taking the irrational buyers out of the market.

Now that lenders are losing money as a result of irrational lending, many are tightening their lending standards and are cutting a significant amount of irrational buyers out of the market. When the remaining buyers realize how much prices are falling and how much inventory is rising due to the abundance of foreclosures, they will be less inclined to act irrational. When this all plays out, prices will return back to the mean where the true meaning of the term "market value" hides.

 Alt-A loans waiting to destruct the housing market, If you have no idea what that is, here is a handy you tube vid that you can watch to see what the future is going to bring, The sub-prime crisis is mild compared to what is coming, you can not bury your head in the sand and deny that the future is going to hit harder than the crisis today, if you do not watch this you are the only one to blame for your future financial ruin, it`s up to you.. the data doesn`t lie.. Bad moon arisin !!!

http://www.youtube.com/watc...