Its just like everything in the world, the cycle!!!!!!!!
Everything has a cycle time, sometimes it takes longer to come round with certain aspects.
The big thing to come next is those people who are fixed rate mortgages and have been used to a low payment, now coming onto finding a new deal that will almost lead to higher monthly payment, thus leading to less money to spend on other things, leading onto less money being spent in the stores-movies-holidays, Tough times ahead. but people need to start to getting used to budgeting now rather than later.
well in places like alberta that are seriously growing, the real estate market has been hot. i heard that a trailer on a lawn would cost the same as a house elsewhere in the country. also, i get the feeling that canadians aren't spending money they don't have and they weren't getting mortgages they don't deserve either, which is why they haven't been hit as hard. this "mess" that the us housing market is in has a lot to do with all those mortgages that shouldn't have existed in the first place.
Yesterday I saw a report on CNN about small houses costing about $700.000 and tiny plots of land for trailer homes costing about $500.000 in a town in Alberta (can't remember the name of the town) where they are extracting oil from sands.
Here in Madeira Island, Portugal the situation is similar to Scotland, prices have topped out in the past 2 years or so, but have not began to drop yet. Home ownership in Portugal is extemely high, perhaps 90-95%, leaving only a small percentage for rent. It's allways been that way.
Getting a home loan is much more difficult and considerably more expensive at the moment. I think that banks worldwide followed similar policies of US banks and are now getting hammered just like US Banks. Actually it's you and I that are getting hammered. Most banks can weather this crisis without great problems.
Economic downturns are allways followed by boom times. Lets hope this economic recession does'nt take too long.
true... the major mortgage companies (fannie mae and freddie mac) are backed by the u.s. government so their drop in shares etc is really hitting the average joe much more. i don't think fannie mae and freddie mac will ever "die" despite how hard they're being hit for the mess they've caused themselves.
Having lived in various parts of the USA and other countries around the globe, i can 100% attest to the fact that the economy and subsequently the housing prices are on the decline - nothing new i'm reporting here, though.
Interestingly enough, it seems to depend on where you're going within the USA.
Having lived in Las Vegas for a while, many of my friends that bought a place within the past years, are now having to tough it out since the LV bubble has bust. At the rate that buildings were erected, it's no wonder that LV was pushing the limits.
Fargo on the other hand, while often belittled, is part of the technology corridor; MSFT is building a new campus addition to the already second biggest campus behind Redmond, Alien Technology, Bobcat, etc. are all here, house prices have declined a little, but are now leveled.
While we have an abundance of apartment buildings at reasonable rental rates, the opportunity to get into the housing market and buying a place is NOW. It's a buyers market, there's no doubt about it.
Look throughout history; real estate as well as the financial market are behaving in cycles. Currently, we're on a downward spiral - interesting side effect - after recovering from any crash, the next "high" on the scale is higher than the maximum after the last recovery.
Hard data to validate this is floating around all over the place.
Point in case; i just signed the paperwork to buy a house yesterday, closing date will be next month. After everything is said and done, i'll end up with 10k instant equity. That's practically 10k in my pocket - not today and probably not tomorrow. But, by the time that we're back on the "high" side, i'm going to have the 10k instant equity PLUS the appreciation that accumulates during the next upward trend. Carefully evaluated, that should be 10k + 3.5% of the home's value annually. In the intermediate or long run, this makes a lot of sense.
Lorenzo: my tip to you. look for a place that matches your vision and finances and strive for a smart deal. then sit on it and wait it out. chances are that the market is not going to fall much lower. every decline has a bottom and i think we're just about there.
Even if the market were to fall a little more, chances are that the time and money you spend waiting is unequal to the decline in value.
Meaning: every month that you pay on rent would have to equal the deteriorating value of a home you want to buy. Chances are that a house is not going to loose $800 (or whatever you pay on rent) per month.
Can someone explain to me whether this is really true? I'm honestly curious. I'm from Singapore and over here if you're in debt you'll have to find some way to eventually pay up.
Anyway housing prices over in Singapore have risen crazily over the past year but have settled down quite a bit this year. I know many owners who made killings out of it. But in Singapore land is scarce, housing prices hardly ever drops.
In theory it's correct. However, this is going to work only until a person collects negative entries on their credit report. Once they accumulate and your FICO score drops, it's incredibly difficult to add new debt to it as lenders become rightfully suspicious and deny loans/credit cards/bank accounts, etc.
Granted, bankruptcy is an option, it will then take 10 years for the bankruptcy to clear of your record, but in the meantime, the individual can rebuild their credit by small steps. How often can one play the bankruptcy card? Depends on how long one lives, given the fact that it takes 10 years to clear completely.
The American system works on a debt to income ratio and even though Jesse may disagree with this, the FICO scores are not taken lightly in the USA. (This doesn't change the fact that the way the FICO is calculated is utter BS) In order to build credit, one has to owe money and proof their worthiness by repaying debt on time. It's a backwards system where people get rewarded for "being in the hole".
Now that, I 100% agree with. We can tell anyone to take a hike, and as far as i know, there's no credit score for a country, or the proverbial collection agency that reminds the USA that we owe an ungodly amount of money to other countries...
Debt IS a joke. I am in the middle of assisting a client who has fallen on some hard financial times. He racked up $30,000 on a credit card and stopped paying it for 8 months straight.
I drafted the appropriate documents for him to have the creditors stop calling (C & D Letter), as well as called the collection's agency to negotiate a settlement.
On a $30,000 credit card bill they are willing to accept $16,000 to leave my client alone.
The moral of the story: Be responsible, don't get in over your head - but if you are in debt, don't be scared. It's not the end of the world. There are things you can do to fix past mistakes.
If you can maintain a clear conscience, you can stick whomever you want with your debt. A lot of people racking up debt to pass onto their creditors don't realize how far bad credit can reach. Their auto insurance, interest rates and potential jobs are all affected by their credit scores.
To stick someone else with your debt is a dishonor to yourself and your family and it hurts you and your loved ones in more ways than people can imagine. You end up paying one way or another. Some people just think it's worth the trouble and some are just at the end of their rope do to bad decisions. Either way, I like to think people will do the right thing and pay for their bad decisions and conduct, but they don't. The rest of us do.
From the manufacturing sector, I can't say I've ever seen anything like the price increases we have received from our suppliers. All of them. I mean, every single one. On top of that, they are adding fuel surcharges for delivery of goods.
Our price increases are going into effect right now, with these finished goods hitting retail stores within the next few months.
JMO, and I know the government keeps adjusting the algorithm to hide it, but I think the inflation rate in the United States by the end of the year will be breathtaking.
You think you took a hit on your house values, wait until this inflation hits us for the next year or two.
I work for and manage a public utility. I scheduled the replacement of a pipe line during June but decided to hold off until the next quarter.The next quarter being July. All of the materials increased an average of 45% in that time. The largest increase being the pipe itself. It went from $10.50/ft to $17.10/ft. Plus a newly added delivery charge which lately has become the most common way of covering the inflating material and fuel cost.
I have been in the beginning stages of building a new home. I have been doing what I am capable of and also acting as the general contractor to coordinate all aspects of the build. Doing so, last year I would have expected to have saved around 40% of the cost associated with the build. Even with those savings and a valuable tract of land. I don't see my new homes resale value being at or near the cost of construction. Two years ago it would have been valued well over the cost of construction. Last year too. My biggest problem now is, due to the increased building cost, I need to stretch the build out over more time and in turn absorb more inflation. New home construction is taking a hit from both ends. I'm now watching the reality of my dream home slip through my fingers.
