House Prices

[Mr I]

with all the jitters in the NYSE reportedly due to the failing sub prime lending market have the house prices been affected over there.

Over here in the UK I got a fixed rate on the home loan at now less than the base (bank to bank lending) rate. But I suppose in some ways I wish house prices would come down so that when we want to get a bigger house we could afford it off our wages.

[beefcake]

House prices have dropped a bit, but the problem is that the interest rates are shit and most mortgage companies will not give 100% financing. Alot are 80/20's or ARM's with high interest rates. There are a lot of foreclosures happening and no one is really buying. So houses are selling for a lot less depending on whether the owners are willing to take a loss in order to sell. There are a lot of owners who aren't willing to take a loss and are riding it out. I've seen a lot of people buy other houses and then can't sell the one they already have causing a foreclosure. It's a shitty market right now.

[Mr I]

best sell yours and rent for a while till you find the one you want in that situation then. I just think that if the market drops then while its a bad thing for you as a home owner its good if your trying to buy another house since they'd be loads cheaper.

[coffee-guy]

Really just depends on where you're at bro - the housing market in my area is f'ing booming...

[blm]

The market is saturated in Florida also. Real bad time to be in real estate.

[hitmansb]

Unfortunately, the housing market here isn't showing any signs of weakening. Getting so frustrated, I may end up giving in...buying an overpriced lot outside of town, and then building.

[ROCKETW19]

here in cali it is horrible. there are 120-150 houses in my comunity and 15 are in forclosure. people tryed to flip them and got stuck when the market stoped. the ranges are 600K to just over a mil. alot of brokers are under the microscope for all the forclosures. i guess they can get in trouble.

[FitnessBrat]

Real estate is a mess right now. Buyers market for sure - but a sellers nightmare. My house is worth almost half of what it was maybe 2 years ago - FL is not good right now and doesn't seem to be getting better anytime soon. And as Beef said - the interest rates are terrible and foreclosure is at an all time high.

[phatchopper]

I have had my house on the market for almost a year and I am at the point that I am just going to have to take a loss and move on, it shouldn't be a terrible hit but it still sucks to lose money in real estate

[redsquirrel]

I work in the industry for the largest lender in the country, so let me try and shed some insight to this.

The failing subprime market has little to do with the amount of foreclosures. In fact, the majority of people who are defaulting, were at one time a prime borrower and have HELOCs. Helocs have adjustable rates. 4 years ago, prime rate was at 4.25%. Prime rate has now doubled and is at 8.5%. Subprime loans are part of the defaulting loans, but not was much as you would think.

The amount of foreclosures however, does have a lot to do with why values are down so bad. When a house goes up for auction, the amount the home is purchased for is recorded with the county, and that's how & why a lot of values are plummeting. The other reason is because there are so many people with their homes on the market, that drives down prices even more. In the Midwest, our values continue to increase at a steady pace. We obviously don't have the apprecitation rates CA has had, but we also don't have the depreciation either.

As for people not being able to get loans, our lending guidelines have really tightened up over the past month. But that's not really due to just subprime borrowers. What it really has to do with, is all of these lenders lent money to people who they really shouldn't have. They really burned themselves. So, now that some of these people are defaulting, there are no investors to buy the paper and sell as a bond on the secondary market.

The media (of course) is really shedding a negative light and putting most of the blame on the subprime borrower. But, it's prime AND subprime that are making up these default rates.

[Mr I]

I work in the industry for the largest lender in the country, so let me try and shed some insight to this.

The failing subprime market has little to do with the amount of foreclosures. In fact, the majority of people who are defaulting, were at one time a prime borrower and have HELOCs. Helocs have adjustable rates. 4 years ago, prime rate was at 4.25%. Prime rate has now doubled and is at 8.5%. Subprime loans are part of the defaulting loans, but not was much as you would think.

so they are defaulting because they are on a variable rate that runs in line/perhaps 1% above prime/base rate, which has made their repayments impossible?

The amount of foreclosures however, does have a lot to do with why values are down so bad. When a house goes up for auction, the amount the home is purchased for is recorded with the county, and that's how & why a lot of values are plummeting. The other reason is because there are so many people with their homes on the market, that drives down prices even more. In the Midwest, our values continue to increase at a steady pace. We obviously don't have the apprecitation rates CA has had, but we also don't have the depreciation either.

All the houses on the market aren't they also looking to buy elsewhere or you mean because of the forced sales?

As for people not being able to get loans, our lending guidelines have really tightened up over the past month. But that's not really due to just subprime borrowers. What it really has to do with, is all of these lenders lent money to people who they really shouldn't have. They really burned themselves. So, now that some of these people are defaulting, there are no investors to buy the paper and sell as a bond on the secondary market.

The media (of course) is really shedding a negative light and putting most of the blame on the subprime borrower. But, it's prime AND subprime that are making up these default rates.

Cool post

[Mr I]

It really sounds like the body responsible for setting the prime rates over reacted over there in trying to control inflation, it can take like 18 months for the full effects of an interest rate rise to come to fruition from an economic standpoint (thats based on the UK).

But it also sounds like it depends where hyou are in the country as to whats happening with prices

[ROCKETW19]

I work in the industry for the largest lender in the country, so let me try and shed some insight to this.

The failing subprime market has little to do with the amount of foreclosures. In fact, the majority of people who are defaulting, were at one time a prime borrower and have HELOCs. Helocs have adjustable rates. 4 years ago, prime rate was at 4.25%. Prime rate has now doubled and is at 8.5%. Subprime loans are part of the defaulting loans, but not was much as you would think.

The amount of foreclosures however, does have a lot to do with why values are down so bad. When a house goes up for auction, the amount the home is purchased for is recorded with the county, and that's how & why a lot of values are plummeting. The other reason is because there are so many people with their homes on the market, that drives down prices even more. In the Midwest, our values continue to increase at a steady pace. We obviously don't have the apprecitation rates CA has had, but we also don't have the depreciation either.

As for people not being able to get loans, our lending guidelines have really tightened up over the past month. But that's not really due to just subprime borrowers. What it really has to do with, is all of these lenders lent money to people who they really shouldn't have. They really burned themselves. So, now that some of these people are defaulting, there are no investors to buy the paper and sell as a bond on the secondary market.

The media (of course) is really shedding a negative light and putting most of the blame on the subprime borrower. But, it's prime AND subprime that are making up these default rates.

hey red whats subprime and prime borrower?

[trip]

prime = good credit

sub= riskier payer, typically pays higher interest rate, etc.

in dallas it's fine, we never got over appreciated, it's slower obviously, but nothing horrible

[redsquirrel]

prime = good credit

sub= riskier payer, typically pays higher interest rate, etc.

in dallas it's fine, we never got over appreciated, it's slower obviously, but nothing horrible

to elaborate even more:

prime= usually a 650+ credit score, w/ no bankruptcies or major adverse credit problems (charge offs, late payments, collections), and good mortgage history

subprime= 620 and below. usually people who have a recent bankruptcy, maybe very little credit history, or spotty payment history for the mortgage.