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1   RWSGFY   2019 Sep 20, 3:26pm  

Nooooooooooooooooo!
2   SunnyvaleCA   2019 Sep 20, 4:01pm  

The 2008 circumstances were different than they are now. Back then, interest rates had been trending down for the previous decade, which meant people were refinancing often. When refinancing, people would often take out extra cash ("using the house as an ATM") so that even after 5 or more years of ownership they still had poor loan-to-value ratio. ARMs typically had fantastic teaser rates, so people felt like they could get larger and larger loans and take out even more extra cash. So, when housing prices dipped people had little or no equity (because they took out cash) and couldn't get good loan terms when their ARMs reset. Going from 2% teaser interest rate to 6% interest rate doubles your monthly payment. Result: drastically higher monthly payments on a house that was under water. Default is a smart move.

This time around, ARMs haven't offered great teaser rates and 30 year fixed loan rates have been pretty steady. So, fewer people are refinancing frequently and fewer people are taking out cash as a result. So I suspect people's loan-to-value ratios are better than in 2008 and I suspect that most people have locked in a 30 year fixed rate that they can afford.

Of course there will always be people who default after losing their job or after some other personal financial catastrophe. I just don't think it'll set up a perfect storm of defaults and overall meltdown.
3   SunnyvaleCA   2019 Sep 20, 4:10pm  

Iranian_Oil_Burse says
Nooooooooooooooooo!

I think you mean: Look out belooooooooooooooooow!
4   Shaman   2019 Sep 20, 5:48pm  

It could be just wishful thinking. He’s a rich old fuck and rich old fucks made out big the last time housing crashed. Might be just hoping for round two.

It ain’t gonna happen the same way so soon. Give it a few generations.
5   Patrick   2019 Sep 20, 5:58pm  

We have a bit of shady lending, but nothing like what it was in 2007.

I think housing will probably keep falling in the bay area because it is grossly overpriced relative to rents, but I doubt there will be any significant decline nationally.
6   Heraclitusstudent   2019 Sep 20, 6:18pm  

I don't believe there is a big problem with lending, and houses are scarce and expensive for a reason.
However remember when the 1990 prices were called a bubble?
Prices are super high, even relative to rents, and CAN go down for reasons that are more intangibles than people think. For ex if expectations of future appreciation are way down.
This is not quite the same as sales collapsing. New housing sales should resist. There won't be a major inventory problem that cause prices to escape the grip of authorities. But authorities attitude may change. They may start seeing somewhat lower prices as desirable.

7   BayArea   2019 Sep 20, 8:15pm  

Housing crashes are when money changes hands from the poor to the rich.

We won’t have a housing crash, but the Silicon Valley will have another down year in 2020.
8   Eman   2019 Sep 20, 8:17pm  

Patrick says
We have a bit of shady lending, but nothing like what it was in 2007.

I think housing will probably keep falling in the bay area because it is grossly overpriced relative to rents, but I doubt there will be any significant decline nationally.


😂😂😂
9   everything   2019 Sep 22, 11:35am  

Rates going down will keep RE price increasing, or not falling, some places did over shoot, and i.e. here in the midwest we are still working on the overshoot, we might be to it finally, remember the house is also some people's bank as well. (look at refi's). I think current price falls is from the flipathons, see it in higher priced homes, once you start digging into the sales records for some of these places, you see nobody ever really lives in them until that last flip turns into someone who actually wants to live in it. Or someone is living in it and extracting the equity themselves.
Many do build equity though I'm sure.

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