Housing prices in your area

[RkFast]

Can someone explain something to me.....

 

Even if your home is worth LESS than the amount you owe.....why foreclose if youre able to make payments? Im hearing people say that since they owe more than their home is worth they HAVE TO foreclose. IS there some other factor Im not pickin up on?

[KD in CA]

It really comes down to where you live in California. My zip code is hanging tough with slight increases, but adjacent zip codes are not. Some areas, like the Inland Empire, are still getting killed.

 

We might have to look around the Coachella Valley again when we go to visit later this year. Wife's extended family is all there so assuming they don't run out of water, it's one possible landing spot for us in the long run.

[Magox]

Can someone explain something to me.....

 

Even if your home is worth LESS than the amount you owe.....why foreclose if youre able to make payments? Im hearing people say that since they owe more than their home is worth they HAVE TO foreclose. IS there some other factor Im not pickin up on?

Nobody HAS TO. It's an economic decision that some people make, sort of like running a business. If the business has to shed off assets remain profitable, then they do it.

 

If a family bought a home for $500,000 back in 2006 and the home next door just sold for $350,000 and you now come to the realization that you will be negative equity AT LEAST for the next 10 years then it makes sense to let the home go.

 

You go and rent for much less than the OVER-VALUED mortgage, save money for your family, and wait 7 years and you could probably buy a house comparable to the one you let go for even less than what you bought it for a decade earlier.

 

Did you not see those forecasts. The housing market probably won't even bottom until 2013, and many expect the average price appreciation to be 1-2% a year afterwards.

 

So, if YOU ARE SMART and you are that far under, then it only makes sense to let the home go, save money by renting, improve your PERSONAL balance sheet at home, and wait until your credit improves and by a home even cheaper than what you bought it 10 years earlier.

 

That's why. And don't give me this "you have a responsibility to other people and your own character bla bla bla".

 

No. You have a responsibility first and foremost to your family. IF this is the best move for your family, then YOU DO IT!

[IDBillzFan]

It's going to be a real cluster!@#$.

When I read things like you wrote, I'm reminded of how much more I enjoyed football before I really understood it. What I mean is, as a little kid, we didn't have football as a local sports option, so it was strictly something you watched on TV. I'd ask my father something like "Why is that running back running into that wall of people," and his response was simply, "He's looking for a hole." It wasn't until my later years when I took it upon myself to better understand the specific role of the individual linesmen, receivers, backs, etc. What was initially "Gee, the team sucks today" became "Holy crap, the teams sucks on multiple levelsm with no hope of any foundational success in the near term."

 

This, in turn, made me look forward to football less because prior to really understanding the individual components, it was just easier to turn on the game and think something good might happen any moment.

 

In the past few years I've paid closer attention to the economy, and closer attention to politics, and while there are benefits to more clearly realizing that something good is NOT going to happen at any moment, it's also, saldy, easier to see just how badly this team sucks on multiple levels, with no hope of any foundational success in the near term.

 

And the long term doesn't look much better.

 

Ignorance really was bliss.

[birdog1960]

[quote name='Magox' timestamp='1

 

That's why. And don't give me this "you have a responsibility to other people and your own character bla bla bla".

 

No. You have a responsibility first and foremost to your family. IF this is the best move for your family, then YOU DO IT!

just can't agree. when you sign a mortgage you sign a contract. the foundation of the entire country is contracts. when it becomes OK to routinely break them then there is no reason to make them and commerce stops..... not to mention that honesty, honor, personal responsibility, accountability, integrity and perserverence are not bygone fads and should not be considered optional to a person or business of character. if someone makes a bet and loses he should pay or face steep consequences. maybe they need to be more severe if the current rules allow cheaters to win or even save face. we have become a nation of cheaters and this more than any other issue will lead to our collapse if not stopped.

[RkFast]

Nobody HAS TO. It's an economic decision that some people make, sort of like running a business. If the business has to shed off assets remain profitable, then they do it.

 

If a family bought a home for $500,000 back in 2006 and the home next door just sold for $350,000 and you now come to the realization that you will be negative equity AT LEAST for the next 10 years then it makes sense to let the home go.

 

You go and rent for much less than the OVER-VALUED mortgage, save money for your family, and wait 7 years and you could probably buy a house comparable to the one you let go for even less than what you bought it for a decade earlier.

 

Did you not see those forecasts. The housing market probably won't even bottom until 2013, and many expect the average price appreciation to be 1-2% a year afterwards.

 

So, if YOU ARE SMART and you are that far under, then it only makes sense to let the home go, save money by renting, improve your PERSONAL balance sheet at home, and wait until your credit improves and by a home even cheaper than what you bought it 10 years earlier.

 

That's why. And don't give me this "you have a responsibility to other people and your own character bla bla bla".

 

No. You have a responsibility first and foremost to your family. IF this is the best move for your family, then YOU DO IT!

 

At the risk of being simplistic, why should I care if Im in a negative equity situation, espeically if I plan to own the home until the morgage is paid (20-40 yrs)? Most people are immediatly in a neg equity situation with the vast majority of things they buy on credit, autos being the best example of this. I just bought a pre-owned car Im gonna be in a neg. equity situation for at least the first half of the loan term. And UNLIKE a house, Ill NEVER be able improve the car or through normal supply and demand see its value go UP.

 

Neg equity or not, Im still putting money towards ownership and paying down my priciple.

 

Or...again...am I missing something.

 

Im just asking here....not trying to defend one postion or another.

Edited September 16, 2010 by RkFast

[Chef Jim]

The main reason why people are foreclosing is not just because they're upsidedown but because their adjustable loan is readjusting up and they can't refi because the have nagatve equity. They just simply can't afford the monthly amount.

[DC Tom]

just can't agree. when you sign a mortgage you sign a contract. the foundation of the entire country is contracts. when it becomes OK to routinely break them then there is no reason to make them and commerce stops..... not to mention that honesty, honor, personal responsibility, accountability, integrity and perserverence are not bygone fads and should not be considered optional to a person or business of character. if someone makes a bet and loses he should pay or face steep consequences. maybe they need to be more severe if the current rules allow cheaters to win or even save face. we have become a nation of cheaters and this more than any other issue will lead to our collapse if not stopped.

 

I agree...but that's highly ironic coming from someone who supports a president that doesn't believe that himself.

[Booster4324]

I agree...but that's highly ironic coming from someone who supports a president that doesn't believe that himself.

 

Didn't you walk away from a house or somesuch? Someone else maybe?

[Magox]

just can't agree. when you sign a mortgage you sign a contract. the foundation of the entire country is contracts. when it becomes OK to routinely break them then there is no reason to make them and commerce stops..... not to mention that honesty, honor, personal responsibility, accountability, integrity and perserverence are not bygone fads and should not be considered optional to a person or business of character. if someone makes a bet and loses he should pay or face steep consequences. maybe they need to be more severe if the current rules allow cheaters to win or even save face. we have become a nation of cheaters and this more than any other issue will lead to our collapse if not stopped.

I disagree. First and foremost, priority #1 goes towards your family, who cares about other peoples judgements? Also, the notion that there aren't any consequences when you foreclose is ridiculous, first there is a possibility of a clawback from the bank and secondly your credit gets screwed for close to a decade which does punish the consumer either through restriction of credit or considerably higher interest rates for quite some time.

 

Businesses do it all the time, when they have a non-performing asset they either look to sell it at a discounted rate or file for bankrupcy. There is very little difference between the two. No one in this example would have "cheated" as you suggested, one party decided to discontinue payments, allowing the bank to repossess the home.

As I stated earlier, it happens all the time in the business world through bankrupcy courts, where companies are LEGALLY able to default on their payments.

 

So you're wrong to suggest "cheating", because where we all live here in the U.S it is quite legal.

 

Now you can call it immoral or lacking honor, integrity, honesty and personal accountability and that's fine that is your personal opinion. But it's only your opinion, and the value of other people's opinions or judgements are next to nil and carry NO WEIGHT when it comes down to doing whats best for you and your family.

 

 

At the risk of being simplistic, why should I care if Im in a negative equity situation, espeically if I plan to own the home until the morgage is paid (20-40 yrs)? Most people are immediatly in a neg equity situation with the vast majority of things they buy on credit, autos being the best example of this. I just bought a pre-owned car Im gonna be in a neg. equity situation for at least the first half of the loan term. And UNLIKE a house, Ill NEVER be able improve the car or through normal supply and demand see its value go UP.

 

Neg equity or not, Im still putting money towards ownership and paying down my priciple.

 

Or...again...am I missing something.

 

Im just asking here....not trying to defend one postion or another.

Depends how much negative equity you have in the home. If you bought the home for $500,000 and now it's worth $480,000 the likelyhood of that person defaulting isn't all that high. However, the lower the value of that home goes the higher the possibility rises of that person defaulting on their payments.

 

The example of the car isn't a good one. Cars are a deteriorating asset (unless it's a collectable) whereas properties aren't. Not the same thing at all.

Edited September 17, 2010 by Magox

[birdog1960]

[quote name='Magox' timestamp='1284708106' post='1972720'

 

Businesses do it all the time, when they have a non-performing asset they either look to sell it at a discounted rate or file for bankrupcy. There is very little difference between the two. No one in this example would have "cheated" as you suggested, one party decided to discontinue payments, allowing the bank to repossess the home.

As I stated earlier, it happens all the time in the business world through bankrupcy courts, where companies are LEGALLY able to default on their payments.

 

So you're wrong to suggest "cheating", because where we all live here in the U.S it is quite legal.

 

 

i anticipated this argument and it's really very weak. unethical, careless, cavalier moves by businesses, especially those in financial services are much to blame for our current financial mess (and most were apparently legal)....and you're using them as an example of how individuals should behave? even if you have a machiavellian mind set (which i believe many americans have come to espouse), the ends suck regardless of the means.

Edited September 17, 2010 by birdog1960

[Magox]

i anticipated this argument and it's really very weak. unethical, careless, cavalier moves by businesses, especially those in financial services are much to blame for our current financial mess (and most were apparently legal)....and you're using them as an example of how individuals should behave? even if you have a machiavellian mind set (which i believe many americans have come to espouse), the ends suck regardless of the means.

Coming from a self-described/suggested socialist, it doesn't surprise me whatsoever that you would consider businesses in the financial sector as the villains and ignore the fact that the government was the main reason why we are in the mess we are today by pushing the GSE's into underwriting loans that they should have never made. Why don't you acknowledge that? Why is that birdog?

 

Also, the example you gave was extremely weak. If a company has a non-performing asset it only makes sense to sell it for what you can or if the situation is so dire to file for bankrupcy. Now tell me again how these sort of examples got us into "our current financial mess".

 

In other words, we are talking about one thing, you somehow switch it to something else that has nothing to do with the other. I specifically made a clear parallel, that IF A COMPANY HAS A NON-PERFORMING ASSET, they either sell it for what they can or file for bankrupcy. There is nothing wrong with that. And again, I ask, tell me how IN YOUR MIND how this is the sort of example that got us into our current financial mess.

[birdog1960]

Coming from a self-described/suggested socialist, it doesn't surprise me whatsoever that you would consider businesses in the financial sector as the villains and ignore the fact that the government was the main reason why we are in the mess we are today by pushing the GSE's into underwriting loans that they should have never made. Why don't you acknowledge that? Why is that birdog?

 

Also, the example you gave was extremely weak. If a company has a non-performing asset it only makes sense to sell it for what you can or if the situation is so dire to file for bankrupcy. Now tell me again how these sort of examples got us into "our current financial mess".

 

In other words, we are talking about one thing, you somehow switch it to something else that has nothing to do with the other. I specifically made a clear parallel, that IF A COMPANY HAS A NON-PERFORMING ASSET, they either sell it for what they can or file for bankrupcy. There is nothing wrong with that. And again, I ask, tell me how IN YOUR MIND how this is the sort of example that got us into our current financial mess.

so the financial companies bailed out by 100's of billions of taxpayer dollars bear no responsibility for their epic failure? it is parallel- buying high and selling low is bad, the converse is good...some homeowners and businesses did the former and some did the latter...those that made the bad bets are responsible and lose and they should own up to their failures and obligations. selling bad assets at a loss is without harm. going bankrupt in the name of expediency is.

[Magox]

so the financial companies bailed out by 100's of billions of taxpayer dollars bear no responsibility for their epic failure?

Who said they bear no responsibility? You stated that they WERE the reason that got us into this mess, even though you conveniently happened to not mention anything about the root reason why we are in the predicament that we are in, which was pressure from the government to the GSE's to underwrite loans to people who should of never received them in the first place. I asked you, why did you omit this? I mean, I know the answer, but I'd like to hear what you have to say about this.

 

it is parallel- buying high and selling low is bad, the converse is good...some homeowners and businesses did the former and some did the latter...

 

This is how things work, not many people believed that the value of their home or condo would go down 50%. Sorry, any person who holds on to their home or condo and is negative equity by over 25% and is continuing to pay that note is a fool.

 

those that made the bad bets are responsible and lose and they should own up to their failures and obligations.

 

You can keep your "honor", meanwhile other people are doing whats best for their family. So what's more important, restoring your "honor" in the view of inconsequential judgemental people or doing what's best for your family?

 

selling bad assets at a loss is without harm. going bankrupt in the name of expediency is.

 

Duh, that's what is happening, selling that asset (home) at a loss. A loss of the down payment that was payed on that home, a loss of the mortgage payments during the time period lived in that home(which is much higher than renting), at a loss for condo association fees, at a loss for property taxes that were payed, at a loss of a possible clawback from the banks, at a loss of ruined credit for close to a decade, at a loss of higher interest rates due to your credit and at a loss of not being able to obtain any more loans.

 

So yeah, spare me the bull **** that there isn't a loss, save it for some other sucker.

Edited September 17, 2010 by Magox

[birdog1960]

Who said they bear no responsibility? You stated that they WERE the reason that got us into this mess, even though you conveniently happened to not mention anything about the root reason why we are in the predicament that we are in, which was pressure from the government to the GSE's to underwrite loans to people who should of never received them in the first place. I asked you, why did you omit this? I mean, I know the answer, but I'd like to hear what you have to say about this.

 

i said "much to blame" and i stand by it. no one forced the development and sale of derivatives or highly leveraged speculation on anybody (including home buyers who were out of there league)

 

 

This is how things work, not many people believed that the value of their home or condo would go down 50%. Sorry, any person who holds on to their home or condo and is negative equity by over 25% and is continuing to pay that note is a fool.

 

yeah, it's foolish to pay off your obligations

 

You can keep your "honor", meanwhile other people are doing whats best for their family. So what's more important, restoring your "honor" in the view of inconsequential judgemental people or doing what's best for your family?

 

and what about the effects on the economy and society as a whole...i know, nobility is a ridiculous notion

 

Duh, that's what is happening, selling that asset (home) at a loss. A loss of the down payment that was payed on that home, a loss of the mortgage payments during the time period lived in that home(which is much higher than renting), at a loss for condo association fees, at a loss for property taxes that were payed, at a loss of a possible clawback from the banks, at a loss of ruined credit for close to a decade, at a loss of higher interest rates due to your credit and at a loss of not being able to obtain any more loans.

 

and who gets stuck with the loss on principle on the asset. why is that not the obligation of the actual debtor? if you are losing, you just change the rules. i call that cheating.

 

So yeah, spare me the bull **** that there isn't a loss, save it for some other sucker.

[Nanker]

Back to the OT of the OP, prices went about 10-15% down from the pre-crash high here in the Princeton, NJ area. Prices are steadily increasing. Slow but steady.

That said, you can pick up a 4 bedroom colonial with 21/2 baths on 1/2 acre lot in the burbs for about $625k, and taxes are about $12-14k depending.

[Booster4324]

Umm speaking to the whole honor thing, isn't part of the contract what happens if the payer cannot pay the payee? Or rather in this case refuses to do so? Both sides walked into the contract knowing what could happen. Am I missing something?

[DC Tom]

Didn't you walk away from a house or somesuch? Someone else maybe?

 

No. But it was suggested that we do so by our loan officer.

 

I pay my debts, though.

[ExiledInIllinois]

Back to the OT of the OP, prices went about 10-15% down from the pre-crash high here in the Princeton, NJ area. Prices are steadily increasing. Slow but steady.

That said, you can pick up a 4 bedroom colonial with 21/2 baths on 1/2 acre lot in the burbs for about $625k, and taxes are about $12-14k depending.

Didn't anyone learn their lesson... 5/8 of a million... :doh:

[WWVaBeach]

Down in the last 1+ years.

 

But my home is worth a whole lot more than when I bought it 8 years ago. Paid 150K in 2002, next door neighbor sold their identical home for 289K 2 months ago.