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Ugh, F the housing market and the banks!!

shortz

shortz

Beard of Knowledge VIP
May 6, 2013
3,107
897
So we just found out, two more houses in our old neighborhood, that we have our other house in, went up for short sales/foresclosure. Our renters were looking to buy our house, but because we cannot come close to matching the price of the short sales, they will most likely not be buying our house. So not only will we be out of rental income, but now we will be out of selling the home with no end in sight for many more years.

This just makes us so angry!! The ****in banks letting everyone do this, the bailouts etc, all screwing the honest people that actually bought something we could afford at the time. It's becoming such a mental and financial strain now. We have already lost $60,000 on the house, and we are another $50,000 away from being able to match the short sale prices/foreclosures. WTF are we supposed to do!?
 
Turbolag

Turbolag

TID's Official Donut Tester
Oct 14, 2012
7,400
1,255
Man I'm sorry to hear that.

What are your plans ?
 
FLEXjs

FLEXjs

MuscleHead
Apr 23, 2012
4,421
1,573
House prices in the US seem to keep tanking as a continued result of the mortgage crisis.

Up here we were largely unaffected by the mortgage meltdown due to more stringent lending practices, but we've got the opposite problem. House prices just keep going up and up.

The current average price of a home across Canada is over $400k. And that's nuts.


Really if you can afford to all you can do is hang on to the property and hope for better times. Sell now and you lock in your losses. Are the renters covering the costs of the place now?

Bl7iab1CUAARKf0.png:large
 
Last edited:
FLBB89

FLBB89

MuscleHead
May 27, 2013
946
241
Short sales and foreclosures should not cannibalize your revenue stream completely.

Short sales require cash...most people simply do not have that amount of capital on hand and look to purchasing homes within conventional financing results.

Foreclosures can take a very long time to actually close. And many times there is a lot physically wrong with the property. Usually not an ideal scenario for someone trying to move into their new home immediately.

While I can see how short sales and foreclosures could be affecting your plan to sell your home to a buyer through conventional financing routes, I do not think it is necessarily competitive markets so much as it is divergent. Having a lot of foreclosures and short sales in your area, though, is bad for the value of your property.

To FlexJS's point...400k for a home isnt that nuts. You also have to account for inflation from 1999, where that graph starts. The biggest issue in the housing market, is banks lending to people who simply cannot afford where they want to live. This isn't happening as much since the banks learned their lesson to some degree a few years ago but it seems like its beginning to happen again. 100 percent financing is very stupid, even with hard collateral. While banks see loans guaranteed by hard collateral as assets, i think that it should still require 20-30 percent down, regardless of your credit and financial profile, to get into a home. This would dramatically mitigate the amount of houses going into default and foreclosure and it would force people to live within their means.

The problem in a greater sense is that we live in a credit driven society with far less emphasis on capital. I read a great article recently that pointed out how Ferrari and Lamborghini's sales are currently at an all time high. That is a perfect example of being in a credit driven society. If we had more stringent capital and liquidity requirements for assets, this would not be as much of a problem. But people want to live above their means. Always will.
 

Jenner

Friends Remembered
Jan 9, 2012
2,457
553
Short sales and foreclosures should not cannibalize your revenue stream completely.

Short sales require cash...most people simply do not have that amount of capital on hand and look to purchasing homes within conventional financing results.

Foreclosures can take a very long time to actually close. And many times there is a lot physically wrong with the property. Usually not an ideal scenario for someone trying to move into their new home immediately.

While I can see how short sales and foreclosures could be affecting your plan to sell your home to a buyer through conventional financing routes, I do not think it is necessarily competitive markets so much as it is divergent. Having a lot of foreclosures and short sales in your area, though, is bad for the value of your property.

To FlexJS's point...400k for a home isnt that nuts. You also have to account for inflation from 1999, where that graph starts. The biggest issue in the housing market, is banks lending to people who simply cannot afford where they want to live. This isn't happening as much since the banks learned their lesson to some degree a few years ago but it seems like its beginning to happen again. 100 percent financing is very stupid, even with hard collateral. While banks see loans guaranteed by hard collateral as assets, i think that it should still require 20-30 percent down, regardless of your credit and financial profile, to get into a home. This would dramatically mitigate the amount of houses going into default and foreclosure and it would force people to live within their means.

The problem in a greater sense is that we live in a credit driven society with far less emphasis on capital. I read a great article recently that pointed out how Ferrari and Lamborghini's sales are currently at an all time high. That is a perfect example of being in a credit driven society. If we had more stringent capital and liquidity requirements for assets, this would not be as much of a problem. But people want to live above their means. Always will.

Not this kid :)
 

Jenner

Friends Remembered
Jan 9, 2012
2,457
553
Just curious shortz, with all of the things against you guys as far as selling...why did you buy another home? Why didn't you guys stay where you were at, if you don't mind me asking.
 
FLEXjs

FLEXjs

MuscleHead
Apr 23, 2012
4,421
1,573
Not this kid :)

Us neither. We have a mortgage and a car loan. Zero credit card debt or any other debt.

Probably upside-down on the car loan, but that's how it goes when you buy new. House is worth 3-4 times what we owe on it. I think we're doing OK. :)
 

Jenner

Friends Remembered
Jan 9, 2012
2,457
553
Us neither. We have a mortgage and a car loan. Zero credit card debt or any other debt.

Probably upside-down on the car loan, but that's how it goes when you buy new. House is worth 3-4 times what we owe on it. I think we're doing OK. :)

Yep, I'm sorry but I am adamant about no debt!

I know a couple that are always going on trips, out to eat almost every night and booze isn't cheap....THEN here and there when under the influence I have to hear about all the credit card debt, how they are going to stop doing all that shit...blah blah blah...never changes, no thanks!
 
woodswise

woodswise

TID Board Of Directors
Apr 29, 2012
4,334
1,340
Shortz:

I am very sorry to hear the deal fell through and I am sorry to hear about the additional short sales in your neighborhood. That can't be good news for any current homeowner in the neighborhood. Housing prices had started to recover, but I guess the economy is still slow enough that people aren't jumping back into the housing market. When that happens, you'll see prices recover over a couple of years, and start setting new records within 5 years. If you can just hang on another year or so, I bet you'll see better times.
 
ProteinFarts

ProteinFarts

Member
Apr 7, 2014
48
5
So we just found out, two more houses in our old neighborhood, that we have our other house in, went up for short sales/foresclosure. Our renters were looking to buy our house, but because we cannot come close to matching the price of the short sales, they will most likely not be buying our house. So not only will we be out of rental income, but now we will be out of selling the home with no end in sight for many more years.

This just makes us so angry!! The ****in banks letting everyone do this, the bailouts etc, all screwing the honest people that actually bought something we could afford at the time. It's becoming such a mental and financial strain now. We have already lost $60,000 on the house, and we are another $50,000 away from being able to match the short sale prices/foreclosures. WTF are we supposed to do!?

Are you wanting to move? If not it's best to not think in those terms - aka what's on paper. You can't (at least I can't) tap any equity anyway. Look at it as your paying for your roof over your head. Any profit that may come is just a bonus. As far as the rental why do you want to get rid of it? It's tangible. In my minds eye that's a heck of a lot better than make believe Monopoly money.

In CA prices are rising a lot. I have the opposite problem. I would love to buy more homes but can no longer get loans. In fact I was so fed up I gutted most of my savings and bought another at the low a couple years ago. But that was my last. That is unless they ease up on the loan criteria. I am not over extended like the millions were that put us in this mess but that matters little at this point.
 
FLBB89

FLBB89

MuscleHead
May 27, 2013
946
241
Yep, I'm sorry but I am adamant about no debt!

I know a couple that are always going on trips, out to eat almost every night and booze isn't cheap....THEN here and there when under the influence I have to hear about all the credit card debt, how they are going to stop doing all that shit...blah blah blah...never changes, no thanks!

There is nothing wrong with debt. Its one of the most important things taught to those in finance and venture capital. Leveraging your capital to work for you with some appropriate debt is a great thing. I can't think of a single business that functions entirely off of liquid capital. Doing so is bad for its value.

Too much debt is bad and so is too little debt. Most people just don't know how to appropriately leverage debt to their favor and instead think of debt as maxing out department store credit cards.
 

Jenner

Friends Remembered
Jan 9, 2012
2,457
553
There is nothing wrong with debt. Its one of the most important things taught to those in finance and venture capital. Leveraging your capital to work for you with some appropriate debt is a great thing. I can't think of a single business that functions entirely off of liquid capital. Doing so is bad for its value.

Too much debt is bad and so is too little debt. Most people just don't know how to appropriately leverage debt to their favor and instead think of debt as maxing out department store credit cards.

and that's my point...THEY have too much..lol

I have the right amount of debt....;)
 
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