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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (25577)	12/2/2004 10:36:57 AM
From: GraceZ	Respond to of 306849

He said, it's the ones with the smaller mortgages that don't pay cash. When buying this is true, very few people who aren't investors buy low priced houses for cash. Only maybe 5-10% of the housing stock turns over in any given year and there are a large number of houses which have no turnover. So you have to factor that a lot of people own older homes in stable neighborhoods who still have their original almost paid off mortgages. This is really true in the older rust belt city neighborhoods where turnover is almost nonexistent. I have an old office assistant who has a mortgage payment of $147 a month, she's lived in the house for 20 years. You almost never see a house for sale in her neighborhood even though she lives within a few blocks of my old neighborhood where the turnover was 10-25% in an up year. In my current neighborhood which has a stock of older homes and a large block of newly built homes coming online every year, it is not unusual for the older residents to be 20-25 years into a 30 year on houses that originally sold for 30-60k and would sell for 250-350k. The new houses which sell in the 500k-1 million range usually have fairly large mortgages even though most buyers are move up buyers who bring significant equity forward.

To: Amy J who wrote (25577)	12/2/2004 12:50:47 PM
From: mishedlo	Read Replies (1) \| Respond to of 306849

Heinz on housing and the gold correction do you think it's impossible for a bubble market to become saturated and peak without an exogenous trigger? please note, in spite of the lowest mortgage rates in two generations, monthly mortgage ( and property tax ) PAYMENTS are up at a record high. meanwhile, affordability is at a record low and rental yields are at a record low, since prices have risen further above trend than at any time in history. also, foreclosures and delinquencies rise relentlessly month after month - and are at a multi year high. the probability that the bubble has ended is very high - prices haven't come down much yet, but this is the typical time lag embedded in what is a rather illiquid market. the damage will only become obvious once transactions that have been postponed due to too high asking prices get done ( this is what the inventory/sales ratios tell us unequivocally - when inventories rise sharply while transaction volumes fall, it is because the spread between bid and ask prices is too large )<.b> . Message 20820513

To: Amy J who wrote (25577)	12/2/2004 9:47:23 PM
From: David Jones	Respond to of 306849

>>>>>>According to a local real estate broker in 1999, more than 90% of local home owners that purchased a one million+ dollar home paid cash.<<<<< One reason million dollar homes were paid for up front was way back in the days of normal markets and million dollar houses that looked like million dollar houses. Banks would look down their noses at such large loans. The thinking was that such people could afford to walk away form a ten or twenty percent downs. I'm going back a some years but as I recall with collateral and income, thirty percent was the low with higher than normal interest rates for such homes.