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House Price Crash Forum


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Posts posted by strbear

  1. An update on the auction - the family involved bid $705K and the mortgage company came back with $745K.

    Two interesting facts;

    1) The family chose to walk away over £20K - consensus view is they will get the property for $600K and change soon

    2) The mortgage company is already filed for bankruptcy! Surely they should be getting rid while they can - its on their website at $855K

    More than anything its the complete swing from buyers struggling to lenders struggling that strikes me as the defining feature of this.





  2. What are other costs e.g. taxes like in California?

    Income tax between 1 and 9% up to $1M

    Sales tax (VAT) is around 8%

    They have a property tax each year on the value of the property (approx 5%) - its causing real problems with falling house values!

    Overall not too bad tax wise - healthcare is a different issue!

    RealistBear can probably add to the above as he lived there for a few years - RB?



  3. My cousin bought right at the top in Los Angeles in 2006. My Uncle gave him $150,000 towards the $600,000 two-bedroom house!

    Yeeeeeee haaaaaaaaaa!!!!!!!!

    Well thats your Uncle's contribution gone.

    We'll were looking to buy in Santa Monica / Westwood or Newport Beach so it's good news for us - and with $/£ over 2 its even better - sorry to everyone if I'm a bit California centric but I think its a good indicator.



  4. Statewide, median sales prices fell by a stunning 26% from year-ago levels in February, with home prices dropping at a rate of nearly $3,000 a week, the California Association of Realtors reports. Further, the CAR says the Fed's interest rate-cutting campaign "will have little near-term direct effect on the housing market."

    --In the San Fernando Valley, losing a home to foreclosure is now almost as common for families as buying a home. The L.A. Daily News: "During January and February, there were 1,084 foreclosures and 1,335 sales of houses and condos in Valley communities from Glendale to Calabasas, according to the San Fernando Valley Economic Research Center at California State University, Northridge."

    "It's bad. It's really bad," market analyst Nima Nattagh told the Daily News.

    The opposite appears to be happening now, as lower-priced foreclosed homes come onto the market, increasing sales at lower price points, while the market for more expensive homes has slowed dramatically.

    Enjoy - its a bear-fest!



  5. Southern California home prices continued to fall at a record pace in February, and are now at 2004 levels, a real estate information service reported today.

    The median price for a Southland home last month was $408,000, down 17.6% from a year ago, according to DataQuick Information Systems. Area home prices have now fallen 19% on average from their peaks last year.


  6. Just replace Los Angeles with Leeds, Manchester . . . . . . .

    Downtown Los Angeles has seen a much-heralded revival in the last few years, with thousands of people moving in and a flock of new restaurants and upscale stores opening to serve them. Attractions such as Staples Center and the Nokia Theatre are helping support premium eateries and a lively club scene.

    But there are signs that downtown's residential boom is slowing, if not stalling out altogether.

    But some real estate analysts believe downtown's housing troubles run deeper. They say developers and planners miscalculated its appeal as a residential community, leading them to build far too many projects for the demand.

    As a result, the housing market downtown could fall more sharply and take longer to recover than it might in established residential areas.

    "There was great hype," said Fred Sands, a veteran real estate broker who sold his namesake firm and now invests in commercial properties. "There was sort of a mania that fed on itself. People said downtown was the future, and young people bought into it. Some of those buildings should not have been built."

    The median sales price for homes sold downtown, almost all of which are condos, fell to $497,360 for the fourth quarter of last year, 16% below the peak reached in early 2007, according to DataQuick.





  7. KB Home of Los Angeles posted a loss of $773 million in its most recent quarter, and its shares have plunged 50% in the last year. Lennar Corp., the biggest home builder in California, reported a $1.3-billion quarterly loss Jan. 24. Its stock price has fallen 63% from its level of a year ago.
    Stuck with excess inventory, builders throughout California are beginning to offer steep discounts on new homes, sometimes at a loss. Centex Corp. is touting the "greatest prices in years" in its ads. In San Bernardino County, builder Van Daele Homes is advertising 35% discounts.
    Until recently, most builders resisted outright price cuts in California to avoid undermining the value of their holdings. Instead, many offered incentives such as big-screen televisions or interior upgrades.

    But the incentives weren't working, builders now concede, forcing them to carry the debt on empty, unsold houses.

    "Builders don't have the luxury of waiting another year for the market to turn -- they need the cash flow now," said Patrick S. Duffy, principal of Metrointelligence Real Estate Advisors, a consultant to home builders.

    Its like looking into a crystal ball.

    Ho hum . . . . . . . . .





  8. Isn't this credit which has been previously aggreed, but not drawn down? As such, it will limit future borrowing, rather than call in previous advances?

    Could be an effect on off-set loans though?


    No its a credit line which may already have been spent - so in LA ave house value is 500K - previously you got a HELOC from the value of your mortgage to 90% of the value of the house (ie 450K less the mortgage). Most people who enquired have used their HELOC (admittedly not all will have used all of it) and they then drop the value by 20% to 70% - ie if you are mortgage free thats 100K you now don't have and have to pay back today.

    So you suddenly get a letter saying "pay $100K in 28 days or we start foreclosure"

    Hope that helps



  9. In today's LA Times - its not only those with mortgage foreclosures that need worry, they have started calling in the Home Equity Lines of Credit - ie those who have borrowed against the rising values of their homes. And its not just a few - Countrywide have called in 120,000 alone.

    "We didn't deserve this," Thaleia Georgiades, a real estate agent in El Dorado, Calif., said Thursday, two days after she and her husband, a builder, learned that their Countrywide credit line had been frozen.

    "When you are self-employed, that's the money you count on to bridge the gap during tough times. And this is a particularly tough time in both the building and housing industries," Georgiades said.

    In Phoenix, Kristen McEntire said she received a letter from San Antonio-based USAA Federal Savings Bank about two months ago saying the credit limit on her home equity line had been slashed by $40,000 because the value of her home had declined.

    "They froze everything but about $5," she said. "That's what I had left in the line of credit" after the bank's action.

    Through this week, Chase customers in California can tap as much as 90% of the equity in their homes. Starting Monday, however, that limit goes down to 85% in most of the state. In six counties, including three in Southern California -- Los Angeles, Orange and Imperial -- Chase won't let homeowners borrow more than 70% of the value of their homes. The bank wouldn't say how the six counties were chosen.

    In Florida and Nevada, Chase's loan limits are going down Monday to 70% and 65%, respectively. The percentages will be even lower for people who don't have the best credit.

    LA times




  10. Foreclosures soared 435.5 percent in the San Fernando Valley last year as nearly 3,000 homeowners surrendered to higher monthly house payments brought on by rising adjustable rate loans, a research center said Tuesday."

    More: "A whopping 2,988 families lost their homes in 2007, up from just 558 in 2006, said the San Fernando Valley Economic Research Center at California State University, Northridge.

    See more at http://latimesblogs.latimes.com/laland/200...ealtor-des.html

    Enjoy - I'm off there in a couple of weeks - I'll feed back to you then


  11. IndyMac Bancorp Inc., a major nationwide home lender based in Pasadena, said Tuesday that it would eliminate 2,400 jobs, or 24% of its remaining workforce, in reaction to "gut-wrenching" changes in the mortgage business.

    The cuts are in addition to 1,600 jobs slashed by IndyMac last fall. And Mike Perry, chief executive of the savings and loan, said he would probably have to fire an additional 500 to 1,000 employees in the next six months.

    Perry cited a "survival of the fittest" environment caused by the deflation of the housing bubble.

    "The bottom-performing real estate and mortgage professionals are having a tough time staying in the business, and most are realizing that they have to find different careers," he said in a letter to employees that estimated that 100,000 home-loan workers in the U.S. had lost jobs in the upheaval triggered by soaring defaults on sub-prime loans.

    Its a side effect I really hadn't considered - its not the City wizz kids but average Joes - thats 100,000 more people who can't pay their mortgage so even more lose their jobs. Frightening.




    PS Also see the piece about probability of houses being cheaper in 2 years time

    PMI measures risk in terms of the probability that housing prices will be lower in two years. These are the markets where PMI believes that's most likely to be the case:

    1) Riverside-San Bernardino-Ontario (94% chance of decline)

    2) Las Vegas (89%)

    3) Phoenix (83%)

    4) Orange County (Santa Ana-Anaheim-Irvine) (81%)

    5) Los Angeles (79%)

    I\ll be deferring my purchase for a while yet then . . . . . . .

  12. Yes its the US, yes its not the UK but at least they are waking up to what's happening

    But such proposals are designed for normal downturns, in which the fundamental problem is that the economy has stalled because consumers have run out of steam or because policymakers have made a mistake, stomping too hard on the economic brakes. Under such circumstances, pumping money into the economy gets it moving again.

    In the current downturn, something more unsettling than a traditional swing in the business cycle appears to be at work: The United States has become increasingly prone to financial bubbles -- huge, seemingly irreversible rises in the value of one sort of asset or another, followed by sudden and largely unforeseen plunges

    Whole article at http://www.latimes.com/news/nationworld/na...=la-home-center



  13. The plan to cease operating Empire Stores is expected to be completed by January 2009 and could involve the loss of approximately 850 jobs at the company’s operations in Bradford and Wakefield,” Redcats UK said in a statement.


    What's a thousand jobs eh? They can all use their redundancy to buy a BTL portfolio - after all houses only ever go up


  14. ...we've heard basic financial products like car loans and credit cards are in trouble ....however these are all linked with a credit crunch ....this may lead to problems with overseas holidays, soccer season tickets, medium to up market restaurants....etc etc.... <_<

    Interesting piece in today's LA Times about car debt

    Gone are the days of the three-year car loan. The length of the average automobile loan hit five years, four months in October, up more than six months from 2002, according to the Federal Reserve. And nearly 45% of loans written today are for longer than six years. Even some staid lenders owned by the carmakers, such as Toyota Financial Services and Ford Credit, are offering seven-year financing. And a few credit unions, particularly in the West, are tinkering with the eight-year note.

    At the same time, the amount of money drivers owe on their cars is soaring. In October, the average amount financed hit $30,738, up $3,500 in just a year and nearly 40% in the last decade, according to the Fed. More troubling, today's average car owner owes $4,221 more than the vehicle is worth at the time it's sold -- up from $3,529 in 2002, according to industry analyst Edmunds.

    And looking around at all the BMWs, Mercedes and Range Rovers I'd say the UK is no different.


  15. What amused me was not the usual upbeat tosh being written by that "expert" Judith Heywood in the Times


    but the comments written underneath. Now either sentiment has turned dramatically or some members on here had a busy time last night. Just interested to see if anyone would own up?

    The Emperor has no clothes Judith.

    The plain facts are:

    - Rents do not cover the financing and running cost

    - Property prices are likely to fall 40%-50% in real terms

    Investors know this, which is why there is a quiet panic going on to sell now before prices fall further.

    harry e, London

    There is an abundance of flats so rent growth is weak in this segment. Families need homes as they have sold to rent to see if prices fall. BUT does this not then mean that the equilibrium of supply of family homes and demand for them is unchanged? .

    I am also not seeing these rent rises in the popular area of London I live in. Add in that most of the BTL have purchased flats that the article admits are seeing problems, and I am somewhat confused on how these surveys are worked out and the results displayed.

    Also, the logic is that families are waiting for a drop in house prices. Does that mean BLT are about to see a double problem and a timing issue?...house prices will fall and then these renters will get out.

    Lets see how longterm BLT are when they find...£1m portfolio with 25% equity...if house prices fall by 10% they lose 100k. But this is 100k on 250k, not on £1mn. Will they really stomach a 40% fall, regardless if the professionals have enough properties to cross-subsidise?

    Raj, London,

    These articles written by media people with vested interests are sounding more ridiculous by the day!! Did anyone see Kirsty's performance on Question time last Thursday night? It's starting to become embarrasing. As my old man used to say lay down and take it like a man.

    Tim Walton, Leeds , England

    Time to see if we're influecing public opinion or if the public are doing it for themselves.



    PS - Raj - BLT are not long term - they tend to go off!

  16. U2L,

    I think some of these rural places are in for the same kind of hit as central Leeds - Haworth never has been an aspirational place to live (but I do understand the appeal) and yet these premises are in the £350 - 450K range - the prices in the Aire Valley have gone through the roof and hence I think are likely to fall the same amount. looks like it was £315K in 04 but I susepct it was more like £100K in 02!

    1 25/06/2004 £315,000 Det. F No Map Green Top Cottage, Holme House Lane, Oakworth, Keighley, West Yorkshire, BD22 0QX

    2 15/11/2002 £100,000 Det. F No Map Green Top Barn, Holme House Lane, Oakworth, Keighley, West Yorkshire, BD22 0QX

    The Wharfe valley is more aspirational and prices are higher but I suspect will be more stable in the long run - Don't get me wrong they will take a big hit too but I suspect the depth of the money in greater.

    Just a view - if you can get a house at the right price go for it,



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