patrick.net

That was during the BOOM CYCLE (baby boomers are aging out and down sizing) do you think we will have wage inflation during 9.5% unemployment. But ok, lets say wage inflation, wow... seems like a reach to me... I guess they will be able to buy food and gas for their job.. (at least 9 of 10 that are working, oh wait that is more like a real rate of 17% so make that 8 of the 10) and why pay more and more when each person looking for a job will be willing to take the job for less and less, ... yea wage inflation indeed.

That site is chock full of data, neat, what do you make of this?

http://research.stlouisfed.org/fred2/series/MBS10Y

I bought my house in december for $550k. I pay $2850 a month,everything included. About $550 is taxes, insurance, and hoa dues. I also save about $700 a month in federal income taxes.

There is absolutely no way that I could find a comparable house to rent around here for $2100 a month.

I'm not saying that the house is going up in value or that there aren't places where id earn more onthe $110k I put down, but I'm positive that buying when I did was a net positive financial move.

If I was renting still, id be putting up about $3000 for this place. Id be lucky to earn $300 a month from the 110k.

So, yeah, I generally agree with the duck about housing. Not everywhere is as ridiculous as san francisco.

Kevin says

I bought my house in december for $550k. I pay $2850 a month,everything included. About $550 is taxes, insurance, and hoa dues. I also save about $700 a month in federal income taxes.
There is absolutely no way that I could find a comparable house to rent around here for $2100 a month.
I’m not saying that the house is going up in value or that there aren’t places where id earn more onthe $110k I put down, but I’m positive that buying when I did was a net positive financial move.
If I was renting still, id be putting up about $3000 for this place. Id be lucky to earn $300 a month from the 110k.
So, yeah, I generally agree with the duck about housing. Not everywhere is as ridiculous as san francisco.

In the Chicago area there are a slew of half million dollar houses that will rent for $2100/mth.

I don't know enough about the foreclosure market here, but perhaps if one of these half million dollar houses went to auction and you could pick it up for the $950/Month mortgage the duck's math works.

Now I know asking prices around here are way out of line and with all the government intervention it is almost impossible to price a house. So maybe there are some real bargains on the auction block.

StillLooking says

In the Chicago area there are a slew of half million dollar houses that will rent for $2100/mth.

Where? I'm from the Chicago area too and that surprises me.

tatupu70 says

StillLooking says

In the Chicago area there are a slew of half million dollar houses that will rent for $2100/mth.

Where? I’m from the Chicago area too and that surprises me.

What do you think a house asking half a million in the Chicago area would rent for?

StillLooking says

What do you think a house asking half a million in the Chicago area would rent for?

I don't know--that's why I asked. I'm just curious where the slew of properties are located.

tatupu70 says

StillLooking says

What do you think a house asking half a million in the Chicago area would rent for?

I don’t know–that’s why I asked. I’m just curious where the slew of properties are located.

A house that asked 425 at the height of the bubble would now rent for $16-1800, and there are a slew of these around. At least there was 6 months ago when I was checking it all out. It seems that the rental market has only softened since then.

Kevin says

I bought my house in december for $550k. I pay $2850 a month,everything included. About $550 is taxes, insurance, and hoa dues. I also save about $700 a month in federal income taxes.

Here's what my spreadsheet outputs with your numbers. . .

Purchase Price $550,000.00
Down Payment 106,700.00 20.00%
Loan Principal 440,000.00

Points 6,600.00 1.50%
Points Net Tax 4,276.80

IO 1650.00 4.50%
Prop Tax 565.58 1.23%
Tax Credit (779.89) 35.20%

Subtotal 1435.70

HO Ins 141.67
HOA/Utils 200.00
Maintenance 168.75 0.15%
Opportunity 258.95 2.80%

Total Other 769.36

Nominal Cost 2205.06

Actual Expense 2926.14

So according to my GIGO spreadsheet the TCO is $2200/mo and the amortizing outgo is $2900.

In 2020 principal will be $350,000 so if you refi into (say) a 20yr 4% loan your TCO will fall to ~$1700/mo.

I'll be surprised if rents are higher then than now, a little, but I have no clue what's going to happen next.

tarkin says

I can not afford to buy. I don’t have the cash and even though I budget to save $400.00

If you can only save $400/mo with only a $600/mo housing cost then a $250,000 house is way too much of a stretch.

You're not in a Bay Area frame of mind. . .

I can’t afford to care how much I could save over a 30yr time frame.)

Yes you can. The system is structured to encourage you to do so.

For one, don't worry about 20% down. Go with 3.5%.

But on your tight finances I only see you able to buy a $75,000 house ($820/mo total outgo, $663 actual cost not counting principal repayment).

If you could get a second income going -- say, $1000/mo after taxes and extra expenses -- then a $225,000 house would be within reach ($1650/mo total outgo, $1300/mo actual cost not counting principal).

But this is of course the "two-income trap" that we as a nation fell into starting in the 1970s.

http://www.amazon.com/Two-Income-Trap-Middle-Class-Mothers/dp/0465090826

Interestingly, the author of this book may be nominated for consumer chief:

http://www.politico.com/news/stories/0910/41981.html

Troy says

tarkin says

I can not afford to buy. I don’t have the cash and even though I budget to save $400.00

If you can only save $400/mo with only a $600/mo housing cost then a $250,000 house is way too much of a stretch.
You’re not in a Bay Area frame of mind. . .
I can’t afford to care how much I could save over a 30yr time frame.)
Yes you can. The system is structured to encourage you to do so.
For one, don’t worry about 20% down. Go with 3.5%.
But on your tight finances I only see you able to buy a $75,000 house ($820/mo total outgo, $663 actual cost not counting principal repayment).
If you could get a second income going — say, $1000/mo after taxes and extra expenses — then a $225,000 house would be within reach ($1650/mo total outgo, $1300/mo actual cost not counting principal).
But this is of course the “two-income trap” that we as a nation fell into starting in the 1970s.
http://www.amazon.com/Two-Income-Trap-Middle-Class-Mothers/dp/0465090826
Interestingly, the author of this book may be nominated for consumer chief:
http://www.politico.com/news/stories/0910/41981.html

I find it interesting that you say I am not in a Bay Area frame of mind as the realtors in Centre County, PA have basically told me that I am not in a Happy Valley frame of mind. State College, PA is different. I guess I am really just in an unjustifiable price of housing frame of mind and I am the one that has to suffer for it.

I don’t have the cash to cover the 3.5% either considering all the other costs and need to have a family emergency fund left. Every time I get close, something comes up and I have to touch savings at this rate I am guessing in about 2-3yrs before I have what I need for 3.5%

The medium house cost in my area is about $200,000. There are no houses below $90,000 (usually 1 bed room houses) in my area. Seriously, I can not remember ever seeing one other than foreclosure listings which is out of reach for me. Since we are one car family buying any further out than 30 miles may not be feasible. We want to stay within 10-15 miles out.

We looked at houses in the $125,000 to $180,000 as I can get approved for $200,000 the last I checked. Most of those houses where worse or smaller than my current apartment which I pointed out to realtors. They would counter with the 4 unit town house property I live in would sale for at least $1,000,000 in our central PA market. The bank should have never approved me for a $200,000 loan and both I and the lending agent I was working with knew it. She was strongly suggesting that I not try to buy something at the upper limit of my approval.

My wife may go to work if she can find a job in this area once our son is in school next year. She would be lucky to bring home $1000 per month and with local daycare costing up to $700 per month we decided for her not to work. We could live without the extra $300 for a few more years. The month she graduated from college we found out she was pregnant.

In the summer of 2008 when I first started looking at buying a house there where no forecloses listed anywhere around hear. Now I am seeing areas where up to 30% of the listed houses are pre-foreclosure or foreclosure. We are officially a non-bubble area, but for some reason I truly believed for years that there was no way in hell most the people from central PA could afford the local housing prices and I still believe that.

Most of the households in our area seem to be 3 income or more. They both tend to have fulltime jobs and at least one part-time job. Our knack for making ends meet involves an understanding of work life balance and if working multiple jobs to pay more to buy a house than what it costs to rent a better a 2 bed room place is what we are calling affordable housing then I think we are wrong.

For the record my wife and I have never had a real fight over our finances. Recently we keep fighting over other people’s finances though. I keep saying there is no way people in this area can afford to keep buying and she keeps saying they can because they have 3-4 jobs per household and tons of debt and they are struggling to make ends meet. That is not affording to buy, that is suffering to buy. We are in agreement we “want” to buy a house, but we will not suffer for it.

We can not afford a house because it makes no financial sense for us to buy. Lower interest rates don’t change that fact unless they get to 1% or housing prices drop in our area.

I am done with my pity party. As far as I am concern I am better off, but when I keep hearing about how lower interest rates make housing affordable it just sets me off. This is same type of trap that got us here in first place.

tarkin says

That is not affording to buy, that is suffering to buy. We are in agreement we “want” to buy a house, but we will not suffer for it.

Welcome to the American Dream. It only hit me in the last decade that Real Estate was a lot different from everything else -- since it is such a limited good with unbounded demand, it is truly the source and sink of all wealth. The Chinese are finding this out the hard way as all their free cash is going into chasing land values.

The general layout of State College PA reminds me of Salinas CA, a very small town bounded by no-growth farms. This really bottles up the supply/demand imbalance and keeps prices at the community's point of pain.

What with all the "investors" looking to buy up places to rent out, and all the people willing to impoverish themselves to stay in the place they have, there's precious little sanity left in the system. Plus of course there are the buyers who get help from the Bank of Parents to knock the starting principal down to size for them.

Take this place:

http://www.zillow.com/homedetails/146-State-College-PA-16801/93574055_zpid/

$125,000. Chickenfeed for a specuvestor. Costs around $500/mo cash expense, should rent for more than that.

Everybody's been counting on that 8% per year compounding appreciation to bail them out of their gamble in 5-10 years. It's always come in the past, in the 70s, 80s, 90s, and last decade.

It'll probably come again. Don't know how, but the System manages to bring it on.

Here's a place in Altoona:

http://www.zillow.com/homedetails/421-S-Dartmouth-Ln-Altoona-PA-16602/2139257218_zpid/

Instead of paying $200,000 for a place in town wouldn't spending the $5,000 to become a 2-car household make sense?

and if working multiple jobs to pay more to buy a house than what it costs to rent a better a 2 bed room place is what we are calling affordable housing then I think we are wrong

The problem with this strategy is that you are utterly unprotected from wage inflation should it come again. You will be a rentslave for the rest of your life.

Homedebtors welcome wage inflation as it inflates away their debt. Also, don't compare the amortizing monthly outgo to rent. The main reason why houses are so unaffordable is that they are the only way you can get off the rent rat trap, unless you like living out in the forest or a boat or something.

It is of course a difficult question.

If you think you are so poor, start a side business, or borrow money from family and friends.

...or be a good American and just take.

Don't despair, Tarkin -- that 400 a month you're socking away is a fine start. Too many people remain content to merely enjoy the effects of affluence. If you let their ether fumes sway you away from your common sense approach, I think you'll regret it.

I started saving and living beneath my means in utilitarian mode a few years ago in order to reach a seemingly modest goal: a place where I could listen to rock 'n' roll at shockingly high volume levels in the relative peace of my own domicile. Then the goal posts started moving in a serious way around 2003. What to do? Grouse and keep saving. Now it's 2010 and the more I watch my decimal stuff grow, the less inclined I feel to put any percentage of it toward a mortgage -- even with some of the gas finally coming out of the whoopee cushion. I've invested in a few other select items of interest with my savings in the meantime, but the more time that goes by, the less interested I am in a mortgage. Let's face it: it's an investment designed for people who are terrified of growing old and dying alone, poor & dispossessed. Oh, and you can paint the walls whatever insane colors you want. Huzzah!

I do still feel that buying a house is a good idea, but only in a few very select instances, particularly if it's a truly significant structure or in a very unique area/landscape. Otherwise, if you're itching to invest, you'd be better off saving for/investing in an antique car or motorcycle, high art, vintage wristwatches, collectible stamps, antique books, Steinway pianos, etc. If you were wise enough to trade your spleen for a Stradivarius back in 1950, the returns would have been a helluva lot richer today than some shitty stucco covered millstone or loveless rental property you might have bought instead -- and there's no HOA!

Even if you have a pack of kids and need a good school district -- I say rent the benefits and save the cash for as many more years as you can stifle that nesting instinct. Working four jobs to afford a big fat mortgage is just sheer jackassery. Houses aren't going anywhere, no matter what tunes the boy wonder landlords on here might be singing you. Like someone else observed on here recently -- you'll know when housing is less of a risk when you no longer hear about it every single day in the press.

My .2, YMMV, etc.

http://research.stlouisfed.org/fred2/series/PAUR

http://research.stlouisfed.org/fred2/series/PAHVAC

http://research.stlouisfed.org/fred2/series/PASTHPI

http://research.stlouisfed.org/fred2/series/PAHOWN

http://research.stlouisfed.org/fred2/series/PARVAC

http://research.stlouisfed.org/fred2/series/PAGOVT

http://research.stlouisfed.org/fred2/series/STAT342LFN

http://research.stlouisfed.org/fred2/series/STAT342GOVTN

ah, bingo:

http://research.stlouisfed.org/fred2/series/STAT342PCPI

StillLooking says

A house that asked 425 at the height of the bubble would now rent for $16-1800, and there are a slew of these around. At least there was 6 months ago when I was checking it all out. It seems that the rental market has only softened since then.

I was just wondering if you could tell me where they are... The $500K houses that rent for $2100, that is.

tatupu70 says

StillLooking says

A house that asked 425 at the height of the bubble would now rent for $16-1800, and there are a slew of these around. At least there was 6 months ago when I was checking it all out. It seems that the rental market has only softened since then.

I was just wondering if you could tell me where they are… The $500K houses that rent for $2100, that is.

In the Chicago area, I am not sure what a 500K house is anymore. There are a bunch of houses asking 500K, but does that make them 500K houses? I do know the houses which asked 425K before the bubble burst now rent for $1600-$1800. I understand that the houses asking one million and up before the bubble burst rent out for something a good deal south of $5000.00 but I have not researched this area as well as the houses asking 400 grand in the pre bubble era.

So just be extrapolation a 500 grand house, whatever that is should be somewhere around $2100-$2600 a month.

StillLooking says

In the Chicago area, I am not sure what a 500K house is anymore. There are a bunch of houses asking 500K, but does that make them 500K houses? I do know the houses which asked 425K before the bubble burst now rent for $1600-$1800. I understand that the houses asking one million and up before the bubble burst rent out for something a good deal south of $5000.00 but I have not researched this area as well as the houses asking 400 grand in the pre bubble era.
So just be extrapolation a 500 grand house, whatever that is should be somewhere around $2100-$2600 a month.

OK--it sounds like you're comparing apples to oranges. I think the original post your responded to was comparing current sales value to current rent. You're comparing bubble sales value to current rent, right?

I was just curious what area you were looking at--city, N. suburbs, NW suburbs, etc.

Tarkin, Troy suggests that you move further away and become a two-car household. I'm giong to take the opposite position -- what happens when oil goes sky-high again? (And it will.)

Are you dead set on having a detached house as opposed to a condo? I say you become a zero-car household and get a big apartment in the middle of town, within walking/biking distance of your job, supermarkets, etc. Particularly with a kid; do you really want to be ferrying him/her around in a car all the time in a few years (and with possibly $6 gas)? All those car repair costs you've complained about will disappear, and you'll be paying off your condo even sooner.

Live as close to the center of town as you can; if it costs too much, compromise on space!

tatupu70 says

StillLooking says

In the Chicago area, I am not sure what a 500K house is anymore. There are a bunch of houses asking 500K, but does that make them 500K houses? I do know the houses which asked 425K before the bubble burst now rent for $1600-$1800. I understand that the houses asking one million and up before the bubble burst rent out for something a good deal south of $5000.00 but I have not researched this area as well as the houses asking 400 grand in the pre bubble era.
So just be extrapolation a 500 grand house, whatever that is should be somewhere around $2100-$2600 a month.

OK–it sounds like you’re comparing apples to oranges. I think the original post your responded to was comparing current sales value to current rent. You’re comparing bubble sales value to current rent, right?
I was just curious what area you were looking at–city, N. suburbs, NW suburbs, etc.

Let me put it this way. I don't see any houses with asking prices that would allow a profit if one decided to buy the house and rent it out.

So the only way the duck's claim would have any validity would be if asking prices and actual sales prices were very far apart. This might be true, but I have not done this research.

@tarkin

State College PA? Holy cow!
I know the darn place and I can see why you said you're so poor.

But still, you're doing better than others if you earn arround 40K/yr in there. You need to stop comparing yourself with SF city boys, because you're not in SF. At 40K/yr income I assume, you still are doing better than other guys arround you. I think what you need is stop worrying about home right now, and setting a long term plan.

Few thousand bucks doesn't mean much for city dwellers because that's less than what they pay for the rent, but it could do quite much for the person who lives in the place like state college PA. The goal for you is putting additional couple hundred bucks into your saving, so that you can get needed downpayment in let's say, 5 to 6 years before your kid goes to middle school. How's that sound?

Do you think you can cut unnecessary spendings, tightening yourself up little more, getting a part time job or something, and putting couple hundred bucks more into saving account each month? It is possible for you to get your own home in few years if you try harder. So, plan ahead, do it. and good luck.

@tarkin ---> glad to hear a voice like yours on this forum.

Tenants, not just landlords, should be posting their opinions /experiences. My hope for tarkin and family is that home ownership does become an affordable possibility. So many still argue against home ownership. Long term, I think it is always better to be an owner than continuing to maintain a lease.

Tarkin pointedly did not want a pity party but I have to say my heart is hurting a little for someone so intelligent and responsible. I'd like to think things eventually work out for people like you but it doesn't always does it? If a decent percentage the low to low middle homes are swooped up by investors....well, it won't help. Landlords are there to make money from renters.

tatupu70 says

StillLooking says

A house that asked 425 at the height of the bubble would now rent for $16-1800, and there are a slew of these around. At least there was 6 months ago when I was checking it all out. It seems that the rental market has only softened since then.

I was just wondering if you could tell me where they are… The $500K houses that rent for $2100, that is.

Oakland, CA has plenty of 500k and lower houses that rent for at least $2100.

@ Tarkin,

Keep your head up and work hard. You and the wife are doing the responsible, sensible thing. Your position is similar to my wife and I's when we first got married and found out we were having our first child.

We didn't want to pay a daycare $800/mo.... plus raising our child (and not someone else) was enough of a priority for us to opt out of daycare. I wasn't making much right after college - and after all our bills, we were lucky to sock away $300-400/mo into our savings account. We didn't want a mortgage, even though everyone told us we needed to buy a house to have a stable household.

I'm in my late twenties now, and married for three years. My wife still stays at home. We still have no desire to buy, and don't want the debt - but, we can go wherever the heck we want, when we want. We're still renting, and believe it or not, we're still happy.. Funny how it works, because we have better behaved kids than most other families - they get the attention and discipline they need. Our marriage is healthy, while many of our friends have divorced. We NEVER fight about finances, but we live within our means, carry ZERO debt and stick with a budget (this is a foreign word for most people). My wife clips coupons, we drive older cars and shop clearance racks and garage sales when we need things. It's actually fun and turns into a contest the more you do it.

Most of my co-workers are in the 40-60 yr. old bracket and broke. They are living check to check, saddled with debt and always concerned with making the next mortgage payment. Guy next to me drives a $42,000 BMW, lives in a $500k home, but is stressed beyond belief.

Keep marching to your own drumbeat, work hard, and it will pay off. Don't consume yourself with buying a home/car/stuff... just live within your means, without debt, and set attainable goals. Our motto is, if you can't pay cash, you can't afford it.

Lots of people here obviously never lived in the place where there are more deers than people out there. :)

People like tarkin have not much choice but to tightening belt up first. The good news is that he may able to get what he want in few years by doing that and the bad news is there still are more deers than people. Names like Bald eagle, Summit, Breezewood should give you guys some idea about the place. Naturally I won't blame him being not able to understand what City people talk here all the time. Owning a home is simply owning a home, Just simple like that. No landlording or financing opportunity to talk about.

For tarkin, i think he is in better shape than most others in the area. At least he is aware of the situation and is trying to understand what's going on. This small difference could make big impact in the long run. His credit is perfect, no debt and there's endless supply of renters as long as Penn State is there. What he need is a plan.

You need to stop comparing yourself with SF city boys...

...the main difference being the sibilance on the s in boys :)

Plawatty says

their annual expenses almost always are at or exceed 40%-50% of the gross rents

HIstorically, this is not the case. Historically, even investors who did not successfully bottom-fish starting out have been bailed out by immense increases in the local wagebase. With Prop 13 in California as the sugar on top, too. Interest rates declining since 1983 have also helped out LLs by lowering their interest costs.

Plawatty says

We’re in the denouement, to be sure, but still not at the end. When FHA decreases the money pool, a little bit more air is going to come out of it

The System cannot allow that to happen. There will be no draining of the intervention. I believe The System will fund mortgages directly from the Fed's power of money creation before that happens.

@ebguy

Prop 13 should cause an increase in property taxes, to make up the difference on properties which have ultra low taxes. While home owners long past get great deals, new home owners shoulder most of the burden, this means he should be way under shooting property taxes.

pkennedy says

Prop 13 should cause an increase in property taxes, to make up the difference on properties which have ultra low taxes

Property taxes are limited by appraised value and cannot be raised to "make up the difference"

I'm actually referring to Serrano v. Priest, which begat Prop 13. In California, property taxes flow to the state, which then disperses them to local districts (to prevent wealthy districts from having an 'unequal' educational system -- but special parcel taxes are a way to get around this) . People in millage states are usually referring to locally collected property taxes, which are locally dispersed to the local school district.

@Troy

Ah yes, my bad on that one, totally slipped on my math there! For some reason I was thinking the tax rate changed over time, not the appraisal value which was locked in at 2%.

I find it hard to believe that property taxes are 2.5% anywhere.
Bet you will be able to spot the "good" school district in this list. Hint -- search for 3%.

@EBGuy
3% of no homes, or 3% of homes worth nothing, yields nothing.

Right at the top of the page, they have an example:
Example: Annual Taxes on a home in: Bay Village $100,000 x 2.40% = $2,400.0

1.25% of 800K is a lot more than 2.4% of 100K. I'm not sure how much "better" those school districts would necessarily be.

I’m not sure how much “better” those school districts would necessarily be.
To be clear, I mean better compared to other schools within Ohio -- not trying to compare to CA schools. Although, I'm pretty sure, a district like Shaker Heights (No levy left behind) would compare favorably to most CA districts.
I think you may have missed my larger point though (and you should understand it before having kids in California).
1.25% of 800K is a lot more than 2.4% of 100K.
In California, ALL this property tax revenue is funneled to the state for distribution -- which disperses it to districts based on per pupil funding formulas. Marin property taxes fund Stockton schools. Rich districts, though, still can maintain a comparative advantage by levying parcel taxes -- which are based square footage (not property value).

What a lugubrious pit to throw your money into...

Sure you'll make it to 70?

Monthly MIP is going up as stated, but the additional cost is substantially mitigated by a 1.25% reduction in upfront MIP. The effect is to provide borrowers with additional leverage and reduce overall cost to borrow. You have misread the situation once again.

I assume the sheep depicted on the front page of your site represent the fools who send you donations each week. Where exactly do you put that money?

EBGuy says

I find it hard to believe that property taxes are 2.5% anywhere.

Bet you will be able to spot the “good” school district in this list. Hint — search for 3%.

Shaker Heights, OH has a 3.05% tax rate in your list and has pretty pathetic scores for such high tax rates. What a bunch of underachievers! I would excuse a bunch of 6 or 7 rating schools: http://bit.ly/underachievers for a district with a 1% tax rate, but not 3.05%

For a paltry 1.28% tax rate, the residents of La Canada, CA get 100% of their schools rated a 10: http://bit.ly/achievers . That's why I'm willing to pay a premium for a house there vs surrounding cities, since the school district will save me hundreds of thousands vs. having to enroll my 2 children in private schools.

Lem'me say first of all I'm wayyyy into being a senior (I'm old) and also, second, that I hang out at the dog park alot (four dogs). There's a certain group of seniors (males) that if they're there, I listen listen in on their discussions. And, what they're discussing is owning rental property and becoming landlords. This is the new nirvana, the new way to get into the housing market and make a buck. I started asking questions. =Not one of them= understood the business of owning a rental (forget things as subtle as an MIP increase). However, they all had the power tools. They all believed they had the ability to buy a fixer-upper and rent it out. I believe they (most of them) could fix up a fixer-upper. What I do not believe is that even one of them could rent it out profitably. What really got to me is that these guys are talking about pulling money saved for retirement purposes from banks to fund a rental purchase. IMHO this business of becoming a landlord qualifies for bubble status.

This is the best news I've heard all day!!!!

I'm happy to see our government helping us buyers along with their artificial deflation of house prices as it has been well overdue. Hopefully, the government will continue to meddle in this market and knock it down an additional 30-40% more than the current price. It would be nice if the government saved me some money for once in my life.

As for the sellers who purchased at the peak and didn't do their homework; I'm sorry this is happening but unfortunately, you'll have to stick with your investment and if anything, live in or rent the property you overpaid for or try to find a sucker out there who's willing to overpay and drink the Kool-Aid, there are plenty of those guys left on the sidelines waiting for you to fleece them...........

Home prices need to fall MUCH further. Vehicle prices need to drop much, much further. Anyone who counts their home as part of their net worth is making a mistake. No matter how old you are, you will still need a place to live unless you can move in with your kids. If you want to cash in on your home, sell when you are aged, put the money in the bank and rent. Until then, your home is dead money. We need to get back to the days when moms could stay home and take care of the kids. America has lost the "family" because everyone is forced to chase the dollar in order to provide housing and transportation. The government needs to stop propping up the auto and housing industries. Let the market determine their values. There is too much noise about closing FANNIE and FREDDIE. They will eventually be shuttered and much heftier down payments will be the rule of the day. All those bargains investors bought 2 years ago? They will be back on the market as foreclosures. There are many middle-class people in the early stages of screw it because they are so far upside down. This thing is going to take years to unwind. All the while, prices will continue to decline. Most wealthy people accumulated their money from saving and investing, and not in real estate. Do you know any multi-millionaires who achieved their riches in residential real estate? And I'm talking about the ones who have liquidated and have the CASH in the bank.

MIP = Mortgage Insurance Premium
(Please People: When authoring an article, please do not assume everyone knows real estate lingo (i.e. what "MIP" stands for). It's always better to define your term when you first use it. Just in case. Thanks!)