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Author: [Politics] Topic: Be Easy- Obama to fix housing crisis
rooster010 send a private message View Space | Friends | Playbook |
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#51
Posted: 2/2/2012 8:22:55 PM
QUOTE

Originally Posted by be easy:

I cannot believe more people aren't vexed as hell about the part of the plan where the govObama clears some of the 10 MILLION+ vacant units hidden in the shadows, by dumping them off in bulk to investors with the intent of renting them back out at the highest monthly payment that they can imagine. I'm certain both the government and those investors will still cry that there is need for government to subsidize housing and to further pad the infestors pockets with Section 8 and welfare monies

At .30 cents on the dollar!!!!!

This is absurdity.

Whatever happened to affordable housing? The same people that claimed to want affordable housing for all are now selling you some bullshit fear that if the government doesn't step in and save the economy by giving more handouts to mortgagedebtors (which give it to the banks) that the world will come to an end because house prices will fall lower (become more affordable)

WHAT THE FARK

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#52
Posted: 2/3/2012 12:14:47 PM
QUOTE Originally Posted by be easy:



What metrics are you using to make the wild claim that now the housing market is undervalued?  Housing is unaffordable at these levels, otherwise people that desired to buy a house would be buying them, and problem solved.  The problem is that housing is still overvalued (in the majority of the country)

How are we damaging the economy by doing nothing? We are damaging the economy by having all these government bailouts of the losing investors.  What of all the people with the second mortgages? That was their ATM, you honestly believe that using taxpayer money to pay their bills will solve any problems?

The solution today is the same as it was four years ago when we had these same discussions and the majority of folks were still piping about how the government could save housing and the bailouts would work. Allow prices to find their level.

I thought we all wanted affordability? Gaming interest rates doesn't equate to affordability, all it does is allow the people that decided to lever themselves to the hilt to be temporarily bailed out, and then a year later when prices fall further, should Johnny Taxpayer just give them more money still?



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#53
Posted: 2/3/2012 4:22:17 PM
QUOTE

Originally Posted by be easy:




Of course the housing market is undervalued! Unless, of course, you don't believe it was overvalued before the crash (you cannot have it both ways). An unnatureal occurance that is happening at the highest frequency ever (forcelosures) is like an anchor.

Said foreclosures are occuring because risky loans were provided at a time when the housing market was overvalued.

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#54
Posted: 2/3/2012 4:25:44 PM
Simply 20 years ago you could purchase a very nice home where I live for 110k. Now even after the burst...that same home is still 210k
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#55
Posted: 2/3/2012 4:34:47 PM

Today at Fire Station #5 in Arlington, Va. President Obama (LQQking for Cd's vote) hailed the January unemployment news as a sign that the economy is growing stronger.....the Obama recovery is working ...

But Rep. Allen West (R-Fla.) is suspicious about the newly released January unemployment numbers....

In response to news that the overall unemployment rate had dropped to 8.3 % and the unemployment rate in the black community declined from 15.8 % to 13.6 %, West floated the possibility that the numbers might have been cooked.

"Can someone tell me how employment in the black community has improved at a rate three times the national average in just a few months??

                                                   ~

Snif,,snif ....can you smell the aroma of books being cooking ?

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#56
Posted: 2/3/2012 4:48:11 PM
QUOTE

Originally Posted by bowlslit:

Simply 20 years ago you could purchase a very nice home where I live for 110k. Now even after the burst...that same home is still 210k

So, based on your example, the housing market is clearly still overvalued.

Thanks for the contribution.

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#57
Posted: 2/3/2012 4:51:00 PM
QUOTE Originally Posted by djbrow:

So, based on your example, the housing market is clearly still overvalued.

Thanks for the contribution.

Inflation...dhat a wouche.

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#58
Posted: 2/3/2012 4:53:22 PM
QUOTE Originally Posted by djbrow:

Of course the housing market is undervalued! Unless, of course, you don't believe it was overvalued before the crash (you cannot have it both ways). An unnatureal occurance that is happening at the highest frequency ever (forcelosures) is like an anchor.

Said foreclosures are occuring because risky loans were provided at a time when the housing market was overvalued.


Not sure I follow.

Couldn't it be the housing market was sooooo overvalued, that even after the crash, it remained overvalued. Not sure how that isn't plausible in your eyes.
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#59
Posted: 2/3/2012 5:03:20 PM
QUOTE Originally Posted by Renton:


Not sure I follow.

Couldn't it be the housing market was sooooo overvalued, that even after the crash, it remained overvalued. Not sure how that isn't plausible in your eyes.

The key is understanding what market forces are. What caused the increase in value during the boon? It wasn't the inherant value of property. Houses were still being built. It was not a case of such limited supply, rather the artiifical means of creating demand...i.e. ability to obtain a mortgage.

What is it less now? What is the single largest factor bringing it down and is that factor 'artificial?'

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#60
Posted: 2/3/2012 5:16:00 PM
Okay... so the banks were giving out Mortgages, like they were going out of style. Which drove prices up, everyone wanted a house, but only so many houses were available in desirable areas, creating higher than sustainable valuations.

Next the market burst, people lost jobs, couldn't afford those houses, more and more went into foreclosure. The market slightly corrected itself, but still has a long way to go, before housing prices are where they should be.

Your point?

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#61
Posted: 2/3/2012 6:25:43 PM
The United States Government also encourages people to own homes by allowing mortgage interest to be used as a tax deduction ...
Whereas Canada does not allow a tax deduction for interest on loans secured by the taxpayer's personal residence ... that interest is not tax deductible ....same as in Australia,,
 
Until recently the home ownership rate in Canada was about the same as in the United States, but Canadians had about 70% equity in their homes on average ...
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#62
Posted: 2/6/2012 10:32:16 AM
QUOTE Originally Posted by djbrow:

The key is understanding what market forces are. What caused the increase in value during the boon? It wasn't the inherant value of property. Houses were still being built. It was not a case of such limited supply, rather the artiifical means of creating demand...i.e. ability to obtain a mortgage.

What is it less now? What is the single largest factor bringing it down and is that factor 'artificial?'



I agree, which is why i am asking you what metric you are using to determine that the market is undervalued (because with all the information i've consumed and studied about housing, we could drop another 30% from here and just begin to find fair value

I'm going to assume that you disregard price, as the measure of value, and instead believe that affordability comes from interest rates. Purchase price is what determines value, if you believe that value is achieved by finding the lowest monthly payment, than you would think housing is more affordable with twice as high a price, so long as a lower interest rate gets you the same monthly payment. Many would probably agree with you, these are the same people that shop for a car at a dealership and don't even care what the price is, so long as they think they can swing the monthly payment.


Valuations only matter if you wish to sell, or if you practice levering against your house for consumption/discretionary spending. For all i care, my house is worth 1$ to you,,,,,and the taxman. I bought the house to live in and i understand that there is no such thing as investing in RE, because it doesn't produce anything and doesn't off a return. what it does offer is a shelter, and we won't sniff fair market value until the herd realizes this. People still think that flipping houses is a means of investing.


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#63
Posted: 2/8/2012 3:46:16 PM
QUOTE Originally Posted by djbrow:

Of course the housing market is undervalued! Unless, of course, you don't believe it was overvalued before the crash (you cannot have it both ways). An unnatureal occurance that is happening at the highest frequency ever (forcelosures) is like an anchor.

Said foreclosures are occuring because risky loans were provided at a time when the housing market was overvalued.



dj, i am still so confused by this post, can you please explain
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#64
Posted: 2/8/2012 3:57:03 PM
QUOTE

Originally Posted by be easy:



I agree, which is why i am asking you what metric you are using to determine that the market is undervalued (because with all the information i've consumed and studied about housing, we could drop another 30% from here and just begin to find fair value

I'm going to assume that you disregard price, as the measure of value, and instead believe that affordability comes from interest rates. Purchase price is what determines value, if you believe that value is achieved by finding the lowest monthly payment, than you would think housing is more affordable with twice as high a price, so long as a lower interest rate gets you the same monthly payment. Many would probably agree with you, these are the same people that shop for a car at a dealership and don't even care what the price is, so long as they think they can swing the monthly payment.


Valuations only matter if you wish to sell, or if you practice levering against your house for consumption/discretionary spending. For all i care, my house is worth 1$ to you,,,,,and the taxman. I bought the house to live in and i understand that there is no such thing as investing in RE, because it doesn't produce anything and doesn't off a return. what it does offer is a shelter, and we won't sniff fair market value until the herd realizes this. People still think that flipping houses is a means of investing.


No, interest rates would not factor in, nor would the purchase price (which is value). The key is determining actual worth.

Worth can only be measured by comparative analysis. There is no other measure in the housing market, just like the stock market. The worth you have in stock is measure against the value of the property at the time of purchase against the value you could receive by selling the property now. This is current worth and is the number by which you can continue to leverage the property.

I agree that the market could drop another 30%. I disagree that the drop itself means the property is still overvauled. Rather, there isn't a demand to increase the current value for purchasing.

I state again, if we all agree that the housing market was overvauled when homes were a hot commodity, making it a sellers' market, what happens when it is a buyer's market?

Real estate offers value over renting solely on the basis that you create equity in your payments, with a presumption that eventually those payments will end and you are left with an asset.

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#65
Posted: 2/8/2012 4:28:01 PM
Real estate offers value over renting solely on the basis that you create equity in your payments, with a presumption that eventually those payments will end and you are left with an asset.


This would be true if it wasn't false, even though the crowd that claims that "only goes up!" would agree with you

Buying a mortgage on a house offers value over paying rent for a house, solely because we allow people to pay mortgage interest to the bank instead of taxes to the taxman.

If the MID went away, it would be absurd for me to have a mortgage, and i assume it is the case with plenty of other people as well

People also consider buying a house to be an investment, which is absurd notion in itself. Investments provide possibility of return, a house provides shelter, however it requires maintenance to hold it's utility and it's a purchase made with debt. 30 years worth of debt

 

This is current worth and is the number by which you can continue to leverage the property.



with a presumption that eventually those payments will end and you are left with an asset

an asset that you need to sell in order to realize your gains, so than you are left with no shelter. What happens when a country has a 'bulge in the python' of their age demographics, and a generation didn't have enough children to perpetuate the perpetual growth model? Don't you end up with less people demanding the asset that this demographic is needing to sell en masse? Massive supply and no demand = lower prices. The market has made an attempt to fix the problems, building has been at record lows for years now, and the market wants to fix the problem of the high prices, but TPTB keep fighting nature, with taxpayer money. Doesn't sound like much of a solution to me

And for the life of me i can't understand the notion that RE is undervalued .  Wouldn't people be gobbling up houses with both hands?

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