Mortgage industry is tanking

[MikeWaters]

Originally Posted by Solon

Exactly. As MRD writes, people aren't as willing to put up with that little 1500 square foot starter home as they were 30 years ago. IMO, it's a combination of things - at least in the areas I"m familiar with - including the lack of new constructions that are moderately sized and priced. Decreased supply/increased demand has driven the price of smaller homes up, and some people - for "just a little more per month" jump to the McMansion neighborhoods.

California's situation pisses me off. My brother-in-law has an interest-only loan on a $400K house, pays a little extra on principal each month, and will have to re-fi in two years into a conventional loan. He's making it, but he's stretched pretty thin for that 1700 square foot ranch in Santa Maria. Meanwhile, programs for low-income families are putting a few lucky ones into 2500 square-foot new constructions for less than $1500/mo. - mortgage, not rent. The middle class is being strangled (granted, it's still better off than the really poor), but there's no chance of relief - esp. with California's enormously expensive taxes and programs.

I don't feel bad for your b-in-law. He made his bed, he sleeps in it.

He could move to the south and midwest if he wanted to, but he chooses not to.

[BYU71]

Originally Posted by MikeWaters

I don't feel bad for your b-in-law. He made his bed, he sleeps in it.

He could move to the south and midwest if he wanted to, but he chooses not to.

Are you serious Mike? All along I thought you were the guy who thought if people don't have what everyone else does, you find someone who has more and redistribute it. Now you are talking about someone making their bed and if they don't like it they are responsible to change it??

[Solon]

Originally Posted by MikeWaters

I don't feel bad for your b-in-law. He made his bed, he sleeps in it.

He could move to the south and midwest if he wanted to, but he chooses not to.

Agree. I don't feel bad for him either. In general, the market will straighten it out - but I just can't imagine living that way. What bothers me, though, is how housing subsidies are applied. I'm not a commie, neither do I believe in cutthroat capitalism, but California's government seems especially inept at both helping the poor and allowing for economic growth.

[MikeWaters]

Originally Posted by BYU71

Are you serious Mike? All along I thought you were the guy who thought if people don't have what everyone else does, you find someone who has more and redistribute it. Now you are talking about someone making their bed and if they don't like it they are responsible to change it??

I'm saying he chose to take out a 400k interest-only loan on a piss-poor small house. Good for him. I'm not losing sleep over it.

[MikeWaters]

Originally Posted by Solon

Agree. I don't feel bad for him either. In general, the market will straighten it out - but I just can't imagine living that way. What bothers me, though, is how housing subsidies are applied. I'm not a commie, neither do I believe in cutthroat capitalism, but California's government seems especially inept at both helping the poor and allowing for economic growth.

Ro bin was part of some federal program because his wife is a school teacher that he got a house in the hood for extremely cheap. of course he has seen mutliple murdered bodies in his neighborhood, so I don't consider it that great a deal.

[Jeff Lebowski]

Originally Posted by Mormon Red Death

the biggest problem is that people were buying too expensive of a house for their income. the average square foot of house in the 70s was around 1100 square feet. Its now 1700 square feet. Have families gotten bigger?

Another problem is that housing prices on the coasts are so high no young people can afford to live there. When my 1300 square foot house in Michigan would be worth close to 6 times its value in California there is something wrong

Amen to that. Cougjunkie probably knows the local market better than I do, but Utah Valley is loaded with new McMansions constructed in the last 2-3 years. It seems like most of them are in the 5-8000 sq ft range. Construction has just gone crazy. New subdivisions going in everywhere. There is one down the street from us. Lots are $350K for 1/4 acre. Huge homes are going up and all ten lots have been purchased by investors hoping to build a huge home, sell it, and make a profit. If the market tanks, I am sure lots of folks are going to go belly up.

I have a good friend who is a realtor. Last summer he told me that he expected the bubble to burst in about a year. He said that there should be lots of big homes for sale dirt cheap.

[cougjunkie]

Originally Posted by Jeff Lebowski

Amen to that. Cougjunkie probably knows the local market better than I do, but Utah Valley is loaded with new McMansions constructed in the last 2-3 years. It seems like most of them are in the 5-8000 sq ft range. Construction has just gone crazy. New subdivisions going in everywhere. There is one down the street from us. Lots are $350K for 1/4 acre. Huge homes are going up and all ten lots have been purchased by investors hoping to build a huge home, sell it, and make a profit. If the market tanks, I am sure lots of folks are going to go belly up.

I have a good friend who is a realtor. Last summer he told me that he expected the bubble to burst in about a year. He said that there should be lots of big homes for sale dirt cheap.

The crazy thing about this market right now is that starter homes between 150-250k are still selling like hotcakes. Middle priced homes between 275-500k are sitting on the market for months and months. Homes between 500-800k are the worst to try and sell, but once you get over the 1million dollar mark they are selling like crazy. Ideally anything between 2 and 5 million wont stay on the market for long.

[BYU71]

Originally Posted by MikeWaters

I'm saying he chose to take out a 400k interest-only loan on a piss-poor small house. Good for him. I'm not losing sleep over it.

I know. I am just saying that you probably now understand why I don't lose sleep over your redistribution of wealth causes.

[UteStar]

Originally Posted by cougjunkie

The crazy thing about this market right now is that starter homes between 150-250k are still selling like hotcakes. Middle priced homes between 275-500k are sitting on the market for months and months. Homes between 500-800k are the worst to try and sell, but once you get over the 1million dollar mark they are selling like crazy. Ideally anything between 2 and 5 million wont stay on the market for long.

As some of you know, my wife is a realtor and just as junkie said, the Utah market is slowing in some price ranges. In SL county, homes are still selling pretty good up to the $350K range...but in the $350-500K range, your home better be priced right and be in a good location or it will sit for 1-3 months. If you price it wrong or are asking too much, your home will not sell for a long time.

I am most curious to see how areas like Herriman, Daybreak and others do during this period because their prices have risen so dramatically, they are now up against homes on the East Bench in similar price ranges and similar sizes (the biggest difference being new vs. old).

[BYU71]

Originally Posted by UteStar

As some of you know, my wife is a realtor and just as junkie said, the Utah market is slowing in some price ranges. In SL county, homes are still selling pretty good up to the $350K range...but in the $350-500K range, your home better be priced right and be in a good location or it will sit for 1-3 months. If you price it wrong or are asking too much, your home will not sell for a long time.

I am most curious to see how areas like Herriman, Daybreak and others do during this period because their prices have risen so dramatically, they are now up against homes on the East Bench in similar price ranges and similar sizes (the biggest difference being new vs. old).

They're sitting a whole 1-3 months. LOL You guys need to go through a credit crunch or real estate collapse like occured in the late 70's and early 80's. Anyone ever heard of S&L collapse. Of course again it was a result of brilliant banking types and their lending practices. Bankers belong in my way overpaid grouping.