74ak said:MarkM from Wash DC gave 5stars as well ?!? LOL, different MarkM. I've actually reviewed other RE books on Amazon, but not this one (but probably not under an ID that you'd recognize ... only my run-on, babbling style of writing might give it away, LOL). I can't review it because I've never read it, and have no interest to.

michal1980 said:all I know, is the 8k has me starting to look. Then again its more certain foreclosures, and homeowners with realistic wants for their prices that are doing more of it. the guy that wants 50k more then a similar house down the block isn't getting my money.I'm glad I had already planned to start looking before they came up with the $8k credit. Because, I'll be honest, I'd be worried if I thought that was what was compelling me to look. I think you have to decide first if it's right for you, and only then do you figure in the credit. Otherwise it's like buying that you maybe don't really want for $100 because it has a $5 mail in rebate.

Although I understand that is the FW thing to do

74ak said:I would recommend to be a contrarian: whatever you local realtors (and Chief Economist for NAR) tell you, do the oppositeIn that case you will never, ever, buy a house

MarkM said:74ak said:
74ak said:I would recommend to be a contrarian: whatever you local realtors (and Chief Economist for NAR) tell you, do the oppositeIn that case you will never, ever, buy a house
It is true that realtors play same tape all the time "buy, buy, buy", that's why I think it is more important to look at local economic trends then listen to overly optimistic (I say fraudulent) pumps by NAR. After few homebuilders go banckrupt and NAR starts increasingly beg for money for housing industry or Lawrence stops smiling on TV it could be a time to buy. (I find it amazing that Lawrence bought a place in NoVa on top of the pick, may be he truly believes in what he is saying)

Nova/Wash DC is still overpriced on rent/own, price/income, historical appreciation basis. Even 15% decline would not do much to change things.
But if history is any guide, we should move in direction of affordability:

Ratio of home prices to annual rents table - Biggest Cities

Home prices projections table

michal1980 said:Me and the wife were already starting to plan. If we were to wait 12 more months, as per plan, and the rebate did not get extended, it would be like running in place.

Yes we'd have a bit more in savings, and our savings now, and after home would be ~$1000/month. That 8k is 8 months worth of extra saving.

I'm tired of the govt rebates like this one. Let's delve in a little bit deeper.
1) Assume this $8K subsidy increases the prices of homes by 8K. So, a previously valued 100K home would now be 108K because sellers would automatically increase their price & every buyer has got the 8K advantage you have.

2) In Dec 2009, the rebate vanishes which means the home prices drop by 8K. Now you are down by 8K.

3) You won't be getting the rebate until Feb 2010 if I understood correctly.

4) By giving a 8K rebate, the govt is effectively enabling the borrower to purchase a home 40K more than he/she could afford.
An example. Let's say you have 42K for downpayment. So, with a 20% downpayment, you can afford a 210K house.
Now add the 8K rebate which increases your available downpayment to 50K. Now you are suddenly able to afford a 250K house.
We are back to square one. Buying more house than you could afford.

5) The only people to benefit from this scheme are the stupid realtors(they make an extra 6% of 8K or $480), the sellers who get 8K more than true market price and govt that gets additional tax on the 8K.

NorthStar2020 said:I'm tired of the govt rebates like this one. Let's delve in a little bit deeper.
1) Assume this $8K subsidy increases the prices of homes by 8K. So, a previously valued 100K home would now be 108K because sellers would automatically increase their price & every buyer has got the 8K advantage you have.

2) In Dec 2009, the rebate vanishes which means the home prices drop by 8K. Now you are down by 8K.

3) You won't be getting the rebate until Feb 2010 if I understood correctly.

4) By giving a 8K rebate, the govt is effectively enabling the borrower to purchase a home 40K more than he/she could afford.
An example. Let's say you have 42K for downpayment. So, with a 20% downpayment, you can afford a 210K house.
Now add the 8K rebate which increases your available downpayment to 50K. Now you are suddenly able to afford a 250K house.
We are back to square one. Buying more house than you could afford.

5) The only people to benefit from this scheme are the stupid realtors(they make an extra 6% of 8K or $480), the sellers who get 8K more than true market price and govt that gets additional tax on the 8K.You are missing the very important condition that only those who have not owned a home in the last 3 years are eligible. This really destroys your whole argument, your comment "sellers would automatically increase their price & every buyer has got the 8K advantage you have" is wrong.

Although it is for the reasons you cite that I contacted my congressman about the $15k Senate proposal, which would have not been restricted to new home buyers. So I understand completely where you are coming from, it's just that it sounds like you did not have all the facts. Even though I would directly personally benefit, it seemed I would still ultimately indirectly lose, for the reasons you state, that would have been like burning money to keep warm. As opposed to this provision, which seems oriented towards propping up the market by attacking supply & demand, the new demand (buyers) brought into the market by this credit would not simultaneously be increasing the supply by having a current home they need to sell.

p.s. your #4 does not apply either. You don't get an immediate CashBack to apply to your downpayment. You get a credit the next time you file taxes, and only after the sale is already closed. So it is impossible for you to use that $8k to apply to your dowpayment. In fact there are some that criticize this program for that very reason.

The best way to think of this $8k is to consider it as a fund that you can use to buy new furnishing, improvements, etc that you inevitably have to do after buying a house.

BEEFjerKAY said:First off, thx for starting the new thread.

Let me "toss the skunk on table" by saying the another possible title for this thread could have been, "Is residential real estate o-v-e-r as an investment."

Most of us are far too young to remember, but for most of recorded history residential real estate was *not* an appreciating asset. It's really only since World War 2 -- and particularly since tax changes in the 1990s -- that real estate became more than mere shelter, more than just a slow accumulator of wealth and became the brick and mortar lotto ticket of the millenium.

I have no crystal ball, but I am a believer in "reversion to the mean". In the case of residential real estate, I think this takes you to at least 2 different possibilities ...

The first is a reversion to the modern, post-war trend line as evidenced by 1970-1995 house price appreciation. If you buy into this form of reversion, housing prices still have a ways to fall. Possibly another 20-25% in some neighborhoods.

The second is a reversion to the pre-WW2 model. If you buy into this form of reversion, housing prices continue to fall until they -- at least temporarily -- are less than fair rental valuation. That would mean further decreases of approximately 50% putting the bottom at approximately 25-35% of peak prices.

Regardless of which model you buy into, or whether you buy into reversion at all, I firmly believe that the 3000+ s.f. millenial McMansions are not only dead money, but destined to be the tenements of the 21st century. Just as the large, pre-income tax houses in Chicago, Philadelphia, and other major urban centers ended up.There are actually a lot of leading thinkers on this subject that share your POV.

Robert Shiller looked at your argument about long term trends & revision to the mean in his Irrational Exuberance, 2nd Edition book (circa 2005?), in which he added material about housing market to his original material about the stock market, published in 1999. He just said this less than two months ago: "It is quite possible that house prices fall more strongly than they did during the global economic crisis of 80 years ago. The real estate crisis could last 10 more years." However he more recently said that he is unable to make any prediction.

Regarding your last paragraph, there are multiple people talking about how "mcmansion" suburbs will become the new ghettos. To some degree it is already happening in the exterme bubble areas, there was a piece on TV last month about all the Phoenix far suburbs that are becoming overgrown with weeds and overridden with crime because of the large # of vacancies, and there was a piece on NPR about a woman in FL who is living in a new neighborhood where almost everyone has moved out/never moved in, or some homes just plain weren't built, and there are actually alligators wandering into her backyard from these overgrown neighboring lots.

There were also arguments last year that these mcmansion suburbs would also fall out of favor because of high gas prices, but those have (for the moment) subsided, obviously.

And of course there is the "Not so Big House" series of books, which were a late '90s counterreaction to the McMasion craze, on aesthetic grounds (the basic idea is that these places with Great Halls, etc are on a scale that is subconsciously uncomfortable for humans to live in. They make positive first impressions, but over time become emotionally tiring to live in).

MarkM said: They make positive first impressions, but over time become emotionally tiring to live in).

Change "in" to "with" and I think you've fairly accurately described Mrs. Jerky's assessment of me. :0

It is not done yet. The housing market will do a slow decline for another 2 years even before it turns direction.

germanpope said:ajohnamous said:What's next:

Real estate has flatlined for the past decade, when will it go up in value?(Part 5)

once we hit bottom, slow growth close to flat-line might be a good thing
maybe homes will become a place for people to live again and not a part of wholesale fraud schemes --- more likely, there will be another bubble --- it will just be starting from a lower baseline

Just remember, these dates for recovery are pure speculation. The time to get in is usually before the consensus agrees.

To me, the underlying question comes down to exactly what -- if anything -- will cause residential real estate prices to resume a period of continuous appreciation at rates in excess of the general inflation rate. If you don't have that appreciation resume, then buyers will reprice downward based on these reduced expectations.

I just don't see what those triggers would be.

And assuming there were such triggers, I don't see how they would reach Remington Indiana and many of the other countless other gawd-foresaken middles-of-nowhere that seem to have more "luxury townhome" developments than they do stop lights.

Cr4ppy houses in cr4ppy places is not a strong foundation for a recovery.

MarkM said:74ak said:SleekWallet said:MarkM said:I don't disagree. But I also think rates will not be this low again for a long time, so for anyone looking to buy and hold with a thirty year (and not pay all cash,) this may be the year to jump (back) in. ...

funny my realtor friend thinks the same way

is your friend Lawrence Yun from NAR?

he kept saying it was best time to buy since bubble started burstingYun is but a mere shadow in evilness of the corporate prostitute that was his predecessor in that role, David Lereah.

If I were the government, I would seriously consider suing NAR for this situation. Just like Wall Str got hit hard as a result of equity research pumping client stocks, NAR should be hit hard with selling biased researched.

Hefty fines, and if they can find any, criminal charges, should be imposed on NAR, and the research team itself. If you are head of NAR research and after quitting you claim that you were merely selling what you were told to sell, then I am sure laws can be written so that future NAR research heads are ensured their place in the appropriate jail, and new orifices drilled for free while rotting in those jails.