How low can they go...

renman95

...on mortgage rates. Today's news reports on the record low on 30 year notes. My Credit Union is advertising 3.625 (15 year) and 4.25 (30 year.) IF we double-dip next year we may see...what...30-year into high 3% and the 15's into the high 2's?

R95

MilesWaits

I don't know but you may be better at guessing how low home prices can go?!

How much worse can it get in Cali, Florida, or Nevada?

Is $30,000 the bottom for a gated community home in Phoenix?

All good questions...

Miles

DrBuster

Our adjustable just came due for a re-lock a couple weeks ago. We wanted to go to a 15 but they gave us some hassle so we just took the adjustable for another year and locked that at 3.12. It was at 5.675 I believe from 5 years ago or so, payments went down a couple hundred a month so we took it. What the hell right.

mrearlygold

How low can it go? Much lower.

Sold my house in Wellington Fl ( took a YEAR ), listed in 2000 when I left the country for $455K. Took a 100K+ LOSS. Taxes on the house were $3500.

The house was on zillow in 2006 at 1.7 Million ( )

Now? IF the house were for sale it would prolly have an asking price of $550K. Taxes? Try 14K

Fourteen Thousand Dollars.

Plus insurance which I'd guess is near 8-10K a year.

If it took a year, after I just blew thru over 200 G's in renovations, and the taxes were a fraction of what they are now, how long do you reckon that baby would sit now?

We have a ways to go. Now the realtors will tell you there are "pockets" that are insulated. That's the same B/S I was told when I bought the house in Wellington, ( very close to Bruce Springsteens house, ya think this could be one of dem dere pockets? ) and where the "polo" crowd lives. A mile away are even bigger houses with their own airstrips in the backyard.. Methinks that would be another one of those "pockets".

Yeah, pockets of insulation. Ha.

Before that I lived in West Boca Raton. Nice middle class area. The houses were in the 200K range. My neighbor across the street was upper management for FEDEX making 75K a year. His Wife was a part time school teacher making about 25G's a year. They drove a new mini van and a 6 year old mazda. The neighbor to my right was in critical care making 100K a year. She drove a new "leased" lexus. The neighbor to the left was general manager for a new car dealership and I have to believe he was knocking down 100K a year. These are the people who live in 200K houses. The taxes on mine were $2,000 a year and my insurance was less than that.

Now? The houses are supposed to be valued in the high 200's to mid 300's and the taxes on anything you buy will be somewhere in the 6K range. Now tell me, did Mike the Fedex manager get a raise to support that type of increase? How about the nurse? Car dealer? But the costs of living increased by quite a bit despite what they claim to be a giant REDUCTION since the bubble popped.

The government is the real bubble that needs to be popped.

ebaytrader

As mortage rates and home prices continue to decline, you'll find no mortgages written for over 20 years. Mebbe 15...or less.

renman95

Valid points mrearlygold. I have had the same thoughts. RE takes a lot of time to wash itself clean if ever. I remember the CA RE depression in the early 1990's. It took some 8 years to just turn around. This bubble was much larger and it will take at least 10 years to show signs of life let alone recover, mho.

Go back ten or twenty years and whenever rates dropped like crazy there were immediate positive actions in the stock market, metals, and RE market. Rates are so low and it seems to do nothing (except for PM's). Why?(rhetorical) People believe in their hearts that more bad news is coming.

This economic disaster is called the Great Recession by some, it should be called The Great Uncertainty.

On your last point, how does one pop that last great bubble?

ebaytrader

<< <i>
On your last point, how does one pop that last great bubble? >>




With this thought process amongst the ruling elite that pop is gonna be mighty loud.

mhammerman

We just checked with our company and 15 for 3.6 and 30 for 4.4. Seems like they continue to slide downward. I think I will check back just before I retire in a couple of years and see if it is hovering a little closer to 2 for 15. Man, who would a thunk it?

mrearlygold

<< <i>Valid points mrearlygold. I have had the same thoughts. RE takes a lot of time to wash itself clean if ever. I remember the CA RE depression in the early 1990's. It took some 8 years to just turn around. This bubble was much larger and it will take at least 10 years to show signs of life let alone recover, mho.

Go back ten or twenty years and whenever rates dropped like crazy there were immediate positive actions in the stock market, metals, and RE market. Rates are so low and it seems to do nothing (except for PM's). Why?(rhetorical) People believe in their hearts that more bad news is coming.

This economic disaster is called the Great Recession by some, it should be called The Great Uncertainty.

On your last point, how does one pop that last great bubble? >>




I don't think we're allowed to say here but let me say this much, it only happened on time in world history and the result didn't come from writing a letter to those dirtbags

mrearlygold

<< <i>

<< <i>
On your last point, how does one pop that last great bubble? >>




With this thought process amongst the ruling elite that pop is gonna be mighty loud. >>




No different from any one of them ( with the exception of one in Texass )

secondrepublic

lock in those rates before inflation hits.
I am doing a re-fi right now for 30 yrs at 4.375% fixed rate with no points.
that rate is a total joke. lowest ever or close to it.
in a period of 10 or 15% inflation - which I believe we'll see in the future - I will be laughing my head off with that kind of fixed rate.

roadrunner

What if TPTB decide that there should no longer be home ownership of such a precious "resource" any more? It won't matter what the rates are when they are taking back the property. Compensation might come in some nice long term govt annuities that should "outperform" home ownership...at least that's what the actuaries will say.

roadrunner

secondrepublic

RR, even if that were to happen someday (very unlikely, IMHO), that's no reason to keep paying a higher mortgage rate until then.

yellowkid

I remember in the late 70's, some friends had to pay 15% to get a mortgage, we thought the days of "cheap money" were over.

renman95

I was very excited to pay just under 10% in 1992. I thought it was a great deal at the time.

Isn't it interesting how home prices went up steadily while rates went down during the next 13 years(?) Not rocket science.

That "policy" doesn't seem to work anymore....pushing on a string...

This disaster has many more years to play out....and some great deals to be had.

jmski52

What if TPTB decide that there should no longer be home ownership of such a precious "resource" any more? It won't matter what the rates are when they are taking back the property. Compensation might come in some nice long term govt annuities that should "outperform" home ownership...at least that's what the actuaries will say.

I think you're onto something. I think that the next confiscation will involve land and property and that it will be accomplished via taxes, debt and inability to pay. Sounds kinda like the Great Depression all over again, doesn't it?

It seems to me that the advertising I see for "reverse mortagages" ties in with this trend.

Step 1 - Make dollars scarce and lower rates to induce this trend of bargaining away your assets for "security". Guaranteed payouts of "today's dollars" for life, in return for giving up any claim to property that you (or your family) worked your/their whole life to own. Banks win.

Step 2 - Devalue the crap out of those dollars and a retiree won't be able to afford day to day expenses even if the house is "paid-for". What then - another lump sum payment to void the contract altogether and granny is out on the street. Banks win.

The big banks and their government lackeys are the only beneficiaries here.

Kip

<< <i>What if TPTB decide that there should no longer be home ownership of such a precious "resource" any more? It won't matter what the rates are when they are taking back the property. Compensation might come in some nice long term govt annuities that should "outperform" home ownership...at least that's what the actuaries will say.

I think you're onto something. I think that the next confiscation will involve land and property and that it will be accomplished via taxes, debt and inability to pay. Sounds kinda like the Great Depression all over again, doesn't it?

It seems to me that the advertising I see for "reverse mortagages" ties in with this trend.

Step 1 - Make dollars scarce and lower rates to induce this trend of bargaining away your assets for "security". Guaranteed payouts of "today's dollars" for life, in return for giving up any claim to property that you (or your family) worked your/their whole life to own. Banks win.

Step 2 - Devalue the crap out of those dollars and a retiree won't be able to afford day to day expenses even if the house is "paid-for". What then - another lump sum payment to void the contract altogether and granny is out on the street. Banks win.

The big banks and their government lackeys are the only beneficiaries here. >>



Does anyone think the american people will just sit there and let it happen? Maybe after the run out of ammunition..but damn sure not until

cohodk

<< <i>

<< <i>What if TPTB decide that there should no longer be home ownership of such a precious "resource" any more? It won't matter what the rates are when they are taking back the property. Compensation might come in some nice long term govt annuities that should "outperform" home ownership...at least that's what the actuaries will say.

I think you're onto something. I think that the next confiscation will involve land and property and that it will be accomplished via taxes, debt and inability to pay. Sounds kinda like the Great Depression all over again, doesn't it?

It seems to me that the advertising I see for "reverse mortagages" ties in with this trend.

Step 1 - Make dollars scarce and lower rates to induce this trend of bargaining away your assets for "security". Guaranteed payouts of "today's dollars" for life, in return for giving up any claim to property that you (or your family) worked your/their whole life to own. Banks win.

Step 2 - Devalue the crap out of those dollars and a retiree won't be able to afford day to day expenses even if the house is "paid-for". What then - another lump sum payment to void the contract altogether and granny is out on the street. Banks win.

The big banks and their government lackeys are the only beneficiaries here. >>




Does anyone think the american people will just sit there and let it happen? Maybe after the run out of ammunition..but damn sure not until >>





Would never happen. Who would enforce it? The Army, Marines, Air Force? Yeah, like those kids would kick their Aunt out of her house. Never happen.

So the banks now own all the houses. Who would do the upkeep? Banks dont want to own real estate. So Jamie Dimon of JPM now own 1486 houses. Whats he gonna do with them? Never happen.

We also are not going to see 10-15% year over year over year inflation either.

You guys underestimate your comrades.

mrearlygold

A collective, ( I know that quite a few here love that concept), I mean collection of news stories/headlines that are real estate specific.

Patrick.net


On to victory comrade!

jmski52

So Jamie Dimon of JPM now own 1486 houses. Whats he gonna do with them?

Good question. What's his end game? It's a valid question for someone who seems to come out unscathed when everyone else is being harpooned.

"Financial Reform", 2010 Washington DC-style