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Price Declines Inevitable for Many States Due to Backlog

By golfplan18   Follow   Thu, 12 Jul 2012, 7:10am   3,209 views   40 comments
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http://www.dsnews.com/articles/foreclosure-backlog-will-lead-to-price-declines-longer-recovery-agency-2012-07-11

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1. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

   1   7:41am Thu 12 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   youwalkaway.com is not a representative sample. They talk about % of their clients who have yet to receive a foreclosure notice, but how many clients do they actually have? Except for Florida and Nevada, the delinquency rate looks quite manageable. In California for example, even if every single delinquent home owner was foreclosed on tomorrow, we'd see 1 house in 30 dumped into the market. This is hardly the big bad shadow inventory we keep hearing about and represents about 1 single additional house per neighborhood.

2. Call it Crazy Follow Befriend 229 threads 2,777 comments

   2   7:52am Thu 12 Jul 2012   Share   Quote   Permalink   Like (3)   Dislike (1)   iwog says This is hardly the big bad shadow inventory we keep hearing about and represents about 1 single additional house per neighborhood. I believe the percentage is a lot bigger. How do you really get TRUE numbers on the amount of people who have stopped paying and are just waiting for the notice from the bank?? Do you really think the banks will release the actual numbers of non-performing loans they have currently on the books? Based on my informal "drive arounds" between the shadow houses that are just sitting empty and the others that are on the market but underwater, the ones that were on the market and were removed, it's a lot more than 1 in every neighborhood!!

3. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

   3   7:58am Thu 12 Jul 2012   Share   Quote   Permalink   Like   Dislike (2)   Protected   Call it Crazy says I believe the percentage is a lot bigger. How do you really get TRUE numbers on the amount of people who have stopped paying and are just waiting for the notice from the bank?? If you don't believe the numbers the banks are reporting, what numbers do you believe instead? The situation is simply not as bleak and dire as you are reporting. The numbers have continued to improve for almost 3 years now without the bottom falling out of the housing market. At this rate, we'll be back to the historical norm in 2 years.

4. Call it Crazy Follow Befriend 229 threads 2,777 comments

   4   8:06am Thu 12 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike (1)   iwog says If you don't believe the numbers the banks are reporting, what numbers do you believe instead? If you really believe the banks data, I feel sorry for you :( I believe real life reality of what I see on the ground, not charts pulled out of "questionable data". I pull my data from what I see physically, then pull county records, sales data and MLS listings and if need be, history from zillow to get a complete picture.....

5. HEY YOU Follow Befriend (4) 330 threads 917 comments

   5   8:57am Thu 12 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   If I owned a house, I'd move it to a state that has the longest time from default to foreclosure. LOL

6. Oxygen Follow Befriend 14 threads 158 comments Brooklyn, NY

   6   9:57pm Thu 12 Jul 2012   Share   Quote   Permalink   Like   Dislike   i may have to agree with iwog. it's their clients; it's not a representative sample.

7. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

   7   10:00pm Thu 12 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   Call it Crazy says I believe real life reality of what I see on the ground, not charts pulled out of "questionable data". I pull my data from what I see physically, then pull county records, sales data and MLS listings and if need be, history from zillow to get a complete picture..... I see. So you trust your feelings over actual data. You personally can accumulate millions of data points and build a realistic picture of the market. So how do you personally determine if an empty house is a bank REO or if it's just waiting on a remodel? (answer: You don't) People were bled with leches for hundreds of years using such anecdotal experience.

8. Call it Crazy Follow Befriend 229 threads 2,777 comments

   8   8:26am Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   iwog says Call it Crazy says I believe real life reality of what I see on the ground, not charts pulled out of "questionable data". I pull my data from what I see physically, then pull county records, sales data and MLS listings and if need be, history from zillow to get a complete picture..... I see. So you trust your feelings over actual data. You personally can accumulate millions of data points and build a realistic picture of the market. So how do you personally determine if an empty house is a bank REO or if it's just waiting on a remodel? (answer: You don't) Let me try and help you READ again.... I pull my data from the physical appearance, the vacant sticker on the door, county records, tax records, sales data, MLS listings and Zillow to get better "picture" of the house situation, NOT from my "feelings"... Get it... These records tell me if the house is just sitting in the shadow or is "owned" waiting on a remodel.... It ain't that difficult to figure out!!

9. tatupu70 Follow Befriend (3) 15 threads 5,628 comments

   9   8:27am Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says Let me try and help you READ again.... I pull my data from the physical appearance, the vacant sticker on the door, county records, tax records, sales data, MLS listings and Zillow to get better "picture" of the house situation, NOT from my "feelings"... Get it... These records tell me if the house is just sitting in the shadow or is "owned" waiting on a remodel.... It ain't that difficult to figure out!! Other than the vacant sticker on the door, all of the other "data" that you mention would be included in Iwog's numbers.

10. Call it Crazy Follow Befriend 229 threads 2,777 comments

    10   8:30am Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   iwog says You personally can accumulate millions of data points and build a realistic picture of the market. Oh, and I'm still waiting on YOUR report of what data points were used from your chart above and what location it covers. It's easy to find support to your story when you don't post identifying information to back it up.

11. YWA Follow Befriend 1 comments

    11   10:59am Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike   I am an employee of YouWalkAway.com and personally assisted in the compilation of this data. We have never claimed that our data is representative of the nation as a whole (although we believe this to be true to a certain degree) but once our own numbers came back much higher than expected, we thought others might find the information interesting as well. Generally, other foreclosure monitoring companies track the length of the foreclosure process based on public records. While this can be helpful, it does not account for the “pre-foreclosure” period – the timeframe in which a borrower has defaulted on mortgage payments but the lender has not yet initiated the foreclosure process. Seeing as this period seems to be over a year on average (again, this is admittedly only amongst our clients), reports of recovery as a result of lenders’ newly established efficiency may be exaggerated and areas thought to have been less affected by the housing crisis may just been reported as so due to the lack of formal foreclosure filings. Simply for the sake of clarification, I also would like to remind readers that YouWalkAway.com does not process loan modifications, short sales, deeds in lieu of foreclosure, etc. or otherwise participate in practices that could potentially lengthen the foreclosure process. Seeing as our clients come to us after already having made the decision to strategically default, our data may actually reflect shorter foreclosure processing times than is true of the nation as a whole.

12. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

    12   11:46am Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   Call it Crazy says Oh, and I'm still waiting on YOUR report of what data points were used from your chart above and what location it covers. It's easy to find support to your story when you don't post identifying information to back it up. It's funny how you don't read replies to your own questions. iwog says Call it Crazy says The graph also doesn't show the source of the graph or region the data is pulled from. For all we know, the data is pulled from his butt!! That's one of the differences between me and you. If I was unsure about the quality of data, I'd go to Google and find an alternate source of data I liked better. You didn't do that. You simply lash out, cast doubt, but replace it with nothing. Here's the source: http://www.calculatedriskblog.com/2012/07/lps-mortgages-in-foreclosure-still-near.html

13. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

    13   11:50am Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   HRHMedia says 8m+ foreclosure and more coming the bottom will happen when all inventory is shifted to appropriate historic levels and then interest rates go UP! once this happens the market will turn.... is this too hard to understand? It's not hard to understand but unfortunately it's dead wrong. Inventory is below historic levels. They only way you get it above historic levels is by assuming there is a huge shadow inventory that no one can prove, provide numbers on, or find on a graph. It's a ghost that desperate real estate bears cling to to keep believing in a crashing market. The reality is that the market has already turned. The next Case-Shiller report that comes out in two weeks is going to show prices SHARPLY higher. Highs in 2012 will be higher than highs in 2011. Don't believe me? Watch and find out.

14. Call it Crazy Follow Befriend 229 threads 2,777 comments

    14   12:44pm Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   iwog says It's funny how you don't read replies to your own questions. iwog says Call it Crazy says The graph also doesn't show the source of the graph or region the data is pulled from. For all we know, the data is pulled from his butt!! That's one of the differences between me and you. If I was unsure about the quality of data, I'd go to Google and find an alternate source of data I liked better. You didn't do that. You simply lash out, cast doubt, but replace it with nothing. Here's the source: http://www.calculatedriskblog.com/2012/07/lps-mortgages-in-foreclosure-still-near.html That's because your response above doesn't show when I view this thread.... don't know why I can't see it... maybe it got three dislikes and was deleted (or what ever happens to them)....

15. FortWayne Follow Befriend (13) 102 threads 3,763 comments

    15   12:50pm Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike   iwog says Call it Crazy says I believe the percentage is a lot bigger. How do you really get TRUE numbers on the amount of people who have stopped paying and are just waiting for the notice from the bank?? If you don't believe the numbers the banks are reporting, what numbers do you believe instead? The situation is simply not as bleak and dire as you are reporting. The numbers have continued to improve for almost 3 years now without the bottom falling out of the housing market. At this rate, we'll be back to the historical norm in 2 years. Looks like a well defined bull trap. I don't think it will work out in just 2 years, low rates might postpone the event.

16. Call it Crazy Follow Befriend 229 threads 2,777 comments

    16   1:03pm Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   iwog says Here's the source: http://www.calculatedriskblog.com/2012/07/lps-mortgages-in-foreclosure-still-near.html Actually, thanks for that link, it actually supports what I am seeing on the ground. Also, did you notice the Title of the article: LPS: Mortgages in Foreclosure still near record high, Much higher in Judicial States I'm in NJ, which is a judicial state. They put a moratorium on foreclosures last year until they sorted the mess out. They now have re-started the process. What I see on the ground verifies this. Here is the another chart from your link: Notice the higher percentage in the judicial states. You might think that the "shadow" is coming down in CA, but in the judicial states, like here, it's climbing... The foreclosures just haven't been processed yet. Different local stories I read say the process is anywhere from 600 days to 10 years to get the pipeline clear in NJ.

17. Call it Crazy Follow Befriend 229 threads 2,777 comments

    17   2:42pm Fri 13 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   More of the "shadow"...

18. tts Follow Befriend 2 threads 470 comments

    18   11:56pm Fri 13 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   http://www.nakedcapitalism.com/2012/07/realtytrac-corelogic-confirm-housing-bear-thesis-85-90-of-reo-being-held-off-market-meaning-tight-inventories-are-bogus.html As many as 90 percent of REOs are withheld from sale, according to estimates recently provided to AOL Real Estate by two analytics firms. It’s a testament to lenders’ fears that flooding the market with foreclosed homes could wreak havoc on their balance sheets and present a danger to the housing market as a whole. Online foreclosure marketplace RealtyTrac recently found that just 15 percent of REOs in the Washington, D.C., area were for sale, a statistic that is representative of nationwide numbers, the company said. Analytics firm CoreLogic provided an even lower estimate, suggesting that just 10 percent of all REOs in the country are listed by their owners, which include mortgage giants Fannie Mae and Freddie Mac as well as the Federal Housing Administration. As of April 2012, 390,000 repossessed homes sat in limbo, while about 39,000 were actually listed for sale, said Sam Khater, senior economist at CoreLogic. Daren Blomquist, vice president of RealtyTrac, said that he was surprised by his company’s finding, especially since a similar analysis in 2009 found that banks were attempting to sell nearly twice as much of their REO inventory back then. Its been pretty obvious to anyone with enough knowledge of the housing market who knew to look at the NOD numbers alone in almost any given area that there is going to be supply overhang for quite a while. Even in the "good times" much if not most NOD's go into foreclosure and for the last few years we've had anything but the "good times". Its been a while but I think around 80-90% of NOD's have been going into foreclosure for the last few years. Which only makes sense when you consider that for most Americans the recession never really ended. Nearly all that GDP growth has been going towards the rich.

19. Call it Crazy Follow Befriend 229 threads 2,777 comments

    19   6:59am Sat 14 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   From the Title of the article tts posted in #19 above: RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REO Being Held Off Market, Meaning “Tight” Inventories Are Bogus If those numbers stated in the article are even slightly close to being accurate, it is truly SCARY, and until the majority of those REO's get through the pipeline, I'm convinced we are no where near the bottom on prices!!!

20. Call it Crazy Follow Befriend 229 threads 2,777 comments

    20   7:01am Sat 14 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   iwog says Inventory is below historic levels. They only way you get it above historic levels is by assuming there is a huge shadow inventory that no one can prove, provide numbers on, or find on a graph. It's a ghost that desperate real estate bears cling to to keep believing in a crashing market. Read the article in post #19 and then come back and tell us the same thing about the "shadow"!!

21. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

    21   5:57pm Sat 14 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   Call it Crazy says Read the article in post #19 and then come back and tell us the same thing about the "shadow"!! Shadow inventory estimates from various economists range from 1.5 million to 30 millions or more. This makes any predictions based on this mythological number complete speculation and without merit.

22. Call it Crazy Follow Befriend 229 threads 2,777 comments

    22   8:42pm Sat 14 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   iwog says Shadow inventory estimates from various economists range from 1.5 million to 30 millions or more. This makes any predictions based on this mythological number complete speculation and without merit. That's what I have been saying all along... who really knows the true number of the shadow... it's an educated guess at best. But I would place a bet that RealtyTrac and CoreLogic have better data than you do.

23. Call it Crazy Follow Befriend 229 threads 2,777 comments

    23   7:19am Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Call it Crazy says But I would place a bet that RealtyTrac and CoreLogic have better data than you do. As well as Bloomberg... since I'm not an economist, I'll have to go along with the data supplied by other trusted organizations that have more knowledge on the subject... .

24. tatupu70 Follow Befriend (3) 15 threads 5,628 comments

    24   7:53am Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   Interesting. So, per Bloomberg, the shadow inventory decreased from ~9MM to ~6MM from 2009 to 2011 while the actual inventory also declined from ~3.5MM to 2.5MM (roughly). So, tell me again why we should be so worried?

25. Call it Crazy Follow Befriend 229 threads 2,777 comments

    25   12:53pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   tatupu70 says So, tell me again why we should be so worried? Well, I'll help you again since you still don't understand... 1) Shadow houses, per the chart, are 3 times higher then existing inventory. What does the sale of a foreclosure do to normal house prices? I'll wait for your answer........ 2) Put your glasses on and look at the end of the chart... the line for the shadow inventory has turned and is heading higher. The line for the existing inventory is heading down. What does that tell you?? I'll wait for that answer too.........

26. tatupu70 Follow Befriend (3) 15 threads 5,628 comments

    26   2:47pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says 1) Shadow houses, per the chart, are 3 times higher then existing inventory. What does the sale of a foreclosure do to normal house prices? I'll wait for your answer........ Sure, it puts downward presure on prices. My point is that over the last 3 years there has been much more downward pressure and prices have only fallen very modestly. Current inventory is the lowest in ~10 years. Adding some foreclosures doesn't seem too scary to me. Call it Crazy says 2) Put your glasses on and look at the end of the chart... the line for the shadow inventory has turned and is heading higher. The line for the existing inventory is heading down. What does that tell you?? I'll wait for that answer too......... It is saying that the dreaded shadow inventory is rising. Since you didn't provide a link to the story or any explanation as to how they are estimating the shadow inventory, I can't comment any further.

27. FortWayne Follow Befriend (13) 102 threads 3,763 comments

    27   5:56pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   Price declines will happen because this market is still bloated and priced out. And with market uncertainty only thing certain is long term losses, even within next 5 years. The current bull trap is about to lose steam.

28. tts Follow Befriend 2 threads 470 comments

    28   7:57pm Sun 15 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   tatupu70 says My point is that over the last 3 years there has been much more downward pressure and prices have only fallen very modestly. Why do you continuously downplay and/or ignore the tremendous government support that has been thrown at the housing market over that time period? Also the declines have been anything but modest, do you mean to say not as bad as say 2008? The decline in that year was about the worst since we've seen since the Great Depression. They've been throwing trillions at the housing market while allowing the banks to twist the rules and hold inventory off the market, of course the declines have been blunted. That there hasn't been a recovery despite all that support is quite shocking. They aren't even trying to hide their reasoning anymore. Its flat out stated in the AOL article that they want to manipulate the housing market by artificially reducing inventory in order to prop up the bank balance sheets. This has been obvious for a while to anyone who closely follows the economic fundamentals for quite a while and other blogs have suggested the same before...but those were just blog articles and forum posters. Mainstream news providers are now starting to state the obvious though too, and usually by that point its been obvious to others for quite a while.

29. Call it Crazy Follow Befriend 229 threads 2,777 comments

    29   8:36pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   tatupu70 says My point is that over the last 3 years there has been much more downward pressure and prices have only fallen very modestly. I guess it depends on your definition of "modest". Here is a chart from an area near and dear to your heart. Does that look like a "modest" drop over the last two years? I know, you'll try and debunk Zillow, so I'll beat you to that... Oh, and look at the table on the right of the chart of the other near by towns. What does the YoY tell you??? Oh, and new rule, if you debunk, you have to provide printed facts or specific data that proves the chart wrong.... Your turn.....

30. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

    30   8:54pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   Call it Crazy says That's what I have been saying all along... who really knows the true number of the shadow... it's an educated guess at best. But I would place a bet that RealtyTrac and CoreLogic have better data than you do. I don't think you understand my point and BTW I think CoreLogic is at the 1.5 million end. If everyone is guessing, then no one has any idea of the actual number of new homes headed to market. It's all simply speculation. What I do know for a fact is this. The number of homes on the market right now is miniscule compared to 2009 and 2010. What's available now is a tiny fraction of properties and many of those are dregs without any money being spent on them in years. (contrast this with 2008 with a large number of flipper failures post-remodel on the market) What I also know for a fact is that credit jail ONLY lasts 4-5 years. People evicted in 2008, of which there were millions, are now eligible to be buyers again. Even more are going to be eligible to be buyers next year. The pent up demand is huge while the pent up supply is questionable at best. So millions of shadow inventory homes flooding the market again? Not a big deal. Most of them will cash flow and be snapped up by investors. There's very little down side and a huge up side from here on out.

31. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

    31   8:58pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   FortWayne says Price declines will happen because this market is still bloated and priced out. And with market uncertainty only thing certain is long term losses, even within next 5 years. This is insane. The market for SFRs is cheaper than any time in decades. 3.5% interest rates mean homes are significantly more affordable now than in 1995 at the bottom of the last bear market. A $500,000 house can be had for $2500 a month for crying out loud.

32. tts Follow Befriend 2 threads 470 comments

    32   10:33pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   I don't think you realize just how much $2500 a month is for most people these days if you think that is "cheap" or "affordable". For reference national household income is around $44k a year. That is pre tax too. Even for dual income earner households about 73% make $75k or less. To "afford" that $500k home you have to be making around or have a household income of $160k a year, and that assumes no other debt. Only about 3% of households make $150k-$200k a year. Low interest rates are only one part of the mortgage equation, the principal is still pretty damn important, even if rates were 0%.

33. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

    33   10:44pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   tts says I don't think you realize just how much $2500 a month is for most people these days if you think that is "cheap" or "affordable". For reference national household income is around $44k a year. That is pre tax too. Even for dual income earner households about 73% make $75k or less. To "afford" that $500k home you have to be making around or have a household income of $160k a year, and that assumes no other debt. Only about 3% of households make $150k-$200k a year. It's easy to find a good safe high quality home in the San Francisco Bay Area for $500,000 or less, however we're talking about top tier real estate in a technological empire full of overachievers making 6 figures. Go out in the valley and there are plenty of homes under $80,000. Ditto for the rest of the country. The median American home is $220,000, not $500,000. The PITI on a $220,000 home today is a touch over $1100 a month. Show me a typical working couple in America who can't afford $1100.

34. E-man Follow Befriend (31) 34 threads 2,545 comments San Jose, CA Premium

    34   10:47pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   "Show me a working couple in America who can't afford $1100." Both husband & wife work for Taco Bell or McDonald. :)

35. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

    35   10:48pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   tts says Low interest rates are only one part of the mortgage equation, the principal is still pretty damn important, even if rates were 0%. You realize there are still interest only loans right? The payment on a 0% interest only loan would be $0. If people are so worried about the principle, then maybe they could just pretend they are renting on a 30-year lease where the landlord can never increase the rent.

36. iwog Follow Befriend (48) 274 threads 12,534 comments 47 male Lafayette, CA Premium

    36   10:52pm Sun 15 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   E-man says Both husband & wife work for Taco Bell or McDonald. :) Yeah, you caught that before I added the word "typical" Two full time minimum wage earning parents would earn about $30,000 a year and pay very little taxes on that money. In fact they might be eligible for earned income credit if they have one or more children. It wouldn't be pretty, but might still be possible.

37. tts Follow Befriend 2 threads 470 comments

    37   12:40am Mon 16 Jul 2012   Share   Quote   Permalink   Like   Dislike   iwog says It's easy to find a good safe high quality home in the San Francisco Bay Area for $500,000 or less, Of course, the market is flooded with supply. iwog says however we're talking about top tier real estate in a technological empire full of overachievers making 6 figures I dunno about top tier real estate, most CA homes I've seen, even high end ones weren't built that well. Particularly during the bubble, I haven't seen good 3rd party data on that though. The data suggests there really isn't all that many "overachievers making 6 figures" though. Sub 6 figure median household and per capita incomes cannot justify $500k homes. Or for that matter $300k homes. The Bay Area is still bubblish unfortunately. Now I wouldn't be surprised if there are more people making 6 or 7 figures on average there compared to other areas of CA much less some place like TN, but the total number is still fairly small. iwog says Show me a typical working couple in America who can't afford $1100. I already posted the median household pre tax income, its $44k in case you missed it the first time. Just looking at that number alone makes it obvious that it is indeed quite typical for people to be unable to afford much of anything right now. iwog says You realize there are still interest only loans right? Sure, just like during the peak bubble years. They're not as widespread anymore but as you note they are out there. What is far more common today is for the debt to income ratios to be jiggered with to make the loan go through. iwog says If people are so worried about the principle, then maybe they could just pretend they are renting on a 30-year lease where the landlord can never increase the rent. You might as well argue that its legit to walk around naked while pretending you're dressed as an emperor. Interest only loans were tried already defaulted massively since those people could never really afford the homes, they were just an accounting gimmick to get the realtor his commish and the bank some more MBS fodder to sell. iwog says It wouldn't be pretty, but might still be possible. Almost as possible as winning the lotto it would seem. Do you not understand just how much a kid costs or how much healthcare costs even if you don't have kids these days? Do you not understand that its common to have $20k+ in school debt alone for most young people today? Or how much a "decent" used car costs now too? There is a huge, gigantic mismatch in your understanding of what stuff actually costs these days and how much people have to spend. Households making $30k a year with a kid or 2 are living in dumpy apartment complexes in the seedy part of town (in CA certainly, probably most of the country as well) or with their parents right now for a reason.

38. tatupu70 Follow Befriend (3) 15 threads 5,628 comments

    38   5:25am Mon 16 Jul 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says I guess it depends on your definition of "modest". Here is a chart from an area near and dear to your heart. Does that look like a "modest" drop over the last two years? I wasn't talking about the median price of a town of 30K, but nice of you to put up that chart. One $1MM sale obviously skews that data significantly... Here's something a bit more relevant. http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline%3B+filename%3Ddownload.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1245335808401&blobheadervalue3=abinary%3B+charset%3DUTF-8&blobnocache=true Keep in mind, this chart is from April and every indication is that prices have gone up this summer. The decrease from 2009 is less than 5% on the 20 city composite and less than 2% on the 10 city composite (eyeballed--not exact). Over 3 years, I'd call that modest.

39. Call it Crazy Follow Befriend 229 threads 2,777 comments

    39   7:21am Mon 16 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   tatupu70 says Keep in mind, this chart is from April and every indication is that prices have gone up this summer. We'll have to wait and see if it was just the Spring bounce or if it has staying power through the Summer. My guess, it will turn down.

40. Call it Crazy Follow Befriend 229 threads 2,777 comments

    40   7:26am Mon 16 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   iwog says So millions of shadow inventory homes flooding the market again? Not a big deal. Most of them will cash flow and be snapped up by investors. There's very little down side and a huge up side from here on out. Wait, did you just change your tune and admit that there could be "millions" of shadow homes?? Really??? And what will the release of these beat up and decaying shadow homes to the market do to overall house prices? Might be no downside for investors who want deals, but will pummel existing home owners who will continue to fall further underwater.