MaxedOutMama
Friday, July 18, 2008
Why Engineers And Real Estate Don't Mix
I've got a severe case of TGIF.
Engineers, who naturally crunch numbers, and realtors, who naturally make numbers up, just don't mix well.
Engineers, who naturally crunch numbers, and realtors, who naturally make numbers up, just don't mix well.
Comments:
<< Home
Completely! The median home lost 31ยข per minute, $18.50 per hour, $444 per day
Makes me want to post a bunch of engineer jokes. CAR's probably cruising Craigslist right now to see if they can take a contract out on you.
If you really wanted to be engineer-ish about it, you could compare that with average wages by occupation and area.
Makes me want to post a bunch of engineer jokes. CAR's probably cruising Craigslist right now to see if they can take a contract out on you.
If you really wanted to be engineer-ish about it, you could compare that with average wages by occupation and area.
Dawg,we lost 33% here in Sonoma county.The median price dropped more than the Median Family Income of $53,400.One of my ex wifes know it all friends bought an REO in January "As an investment",down $50k plus since.It is hard not to enjoy it,she is a most unpleasant person.Bay Area prices are very odd now,some people are beginning to remember that location thingie,just as the Alt-A resets are starting to take off.Bad areas are up to75% off,marginal 50%,and plenty of Free Kool Aid stands in the High End neighborhoods...
# posted by 
: 4:23 PM
: 4:23 PM
This is the first time I've mentioned this but...
I look at the prime loans that were made in the last 5 years and most of them leaving me scratching my head as to their viability if appreciation is out of the picture. My 'hood peaked out $1.5m and that's $1100 per month in property taxes. That IMO is trust fund and fancy doctor territory rarefied. Anyway these 800 FICO loans are just as exposed to a downturn just taking longer for the borrowers to do the math.
I look at the prime loans that were made in the last 5 years and most of them leaving me scratching my head as to their viability if appreciation is out of the picture. My 'hood peaked out $1.5m and that's $1100 per month in property taxes. That IMO is trust fund and fancy doctor territory rarefied. Anyway these 800 FICO loans are just as exposed to a downturn just taking longer for the borrowers to do the math.
Rob - that's right! DTIs got too high, which is one reason why you have all these creditors coming out and remarking in pained astonishment that their prime portfolios are going bad.
What they forgot was that prime borrowers have financial reverses at a similar rate to near prime, but they almost always can sell out ahead of time.
In general, one would expect these prime loans to now go to foreclosure at roughly twice the expected rate, and that doesn't count walkaways. I think there will be a lot of walkaways in the doc/trust fund/MBA territory.
What they forgot was that prime borrowers have financial reverses at a similar rate to near prime, but they almost always can sell out ahead of time.
In general, one would expect these prime loans to now go to foreclosure at roughly twice the expected rate, and that doesn't count walkaways. I think there will be a lot of walkaways in the doc/trust fund/MBA territory.
Tom - incredible as it seems, she has a lot of company.
We had a situation in Florida at the beginning of the bust in which the new condos would often go to contract 3 or 4 times before a sale was actually closed. I wonder if some houses are going to go REO 2 or 3 times?
The boom in several CA areas was so huge that people often did make as much as their salaries in "appreciation". Unfortunately a lot of them tapped it the form of cash-out refis. And then there were those who took HELOCs out and used the proceeds to buy other homes, figuring that if you could make 60K on one annually, you could make 120K on two, and 180K on three. Some of those were older people thinking to build a big nest egg for retirement, or to cover their kid's college education.
Now, when it is swinging the other way, many of these same persons are looking at being middle-aged, having a negative net worth, and substantially higher debt obligations than they did a few years ago.
I don't feel any compassion for the lenders. You are looking at some 52 year old with two houses wanting to buy another, and you don't know what's going on? Cut me a break.
We had a situation in Florida at the beginning of the bust in which the new condos would often go to contract 3 or 4 times before a sale was actually closed. I wonder if some houses are going to go REO 2 or 3 times?
The boom in several CA areas was so huge that people often did make as much as their salaries in "appreciation". Unfortunately a lot of them tapped it the form of cash-out refis. And then there were those who took HELOCs out and used the proceeds to buy other homes, figuring that if you could make 60K on one annually, you could make 120K on two, and 180K on three. Some of those were older people thinking to build a big nest egg for retirement, or to cover their kid's college education.
Now, when it is swinging the other way, many of these same persons are looking at being middle-aged, having a negative net worth, and substantially higher debt obligations than they did a few years ago.
I don't feel any compassion for the lenders. You are looking at some 52 year old with two houses wanting to buy another, and you don't know what's going on? Cut me a break.
Tom, our $162,000 loss last year was double the median income. As you might expect there's a lot of BMWs down at Steve Thomas' used lot and even more piling up in the new section. They've got to be eating some serious lettuce on the turn in versus resale values. Same for Bunnin at Cars101. Both are extremely generous community participants. Those ripple effects are yet to be felt. Our peak was $630,000. As a rule of thumb that means pretty much everybody who bought 2004 on is wiped out or worse.
Dawg and MoM,I appreciate your comments.Both of you are aware of the human and social consequences of this kind of a downturn.middle class areas here have lost half their peak value,and I expect the denial to turn to anger soon with ugly results.Our local paper has tried to blame illegals for the "sub prime" crisis with little subtlety.I wonder how well that will work when the middle and lower upper classes get smacked?someone will get the blame,someone it is safe to be angry with,as usual...but I don't think brown skinned people will do.Ah well,there are always the jews.
# posted by : 8:16 AM
: 8:16 AM
It was the sharecroppers that did it? Not the lenders?
That takes some chutzpah. Let's all give a cheer for "trained journalists"!
The "Jews did it" crowd showed up on Calculated Risk months ago.
That takes some chutzpah. Let's all give a cheer for "trained journalists"!
The "Jews did it" crowd showed up on Calculated Risk months ago.
MoM at least blaming the jews has the benefit of tradition and broad irrational appeal.
# posted by : 10:21 AM
: 10:21 AM
Tom - speaking as a woman, tradition combined with broad irrationality seems somewhat threatening.
Next thing I know I'll end up losing all my independent property, the vote, and finding myself veiled. Burkas and summer heat just don't mix.
Sometimes the newfangled stuff works out just fine!
Post a Comment
Next thing I know I'll end up losing all my independent property, the vote, and finding myself veiled. Burkas and summer heat just don't mix.
Sometimes the newfangled stuff works out just fine!
<< Home
