Indentured Servitude for the Mortgaged Masses
CAR released the January 2006 Median Price numbers today. Remember when Sonoma County's median price at the end of 2005 was $614,000 and 7% of the population could afford to buy a home?
Sonoma's median price at the end of 2005 was around $686,000 - So fewer than 7% of residents could afford to buy a home.
What do you think that % is going to be now?
January 2006 median price: $562,500.00
January 2005 median price: $480,500.00
YoY change = 17.1%
January 2006 median price: $620,000.00
January 2005 median price: $555,000.00
YoY change = 11.7%
January 2006 median price: $489,000.00
January 2005 median price: $450,000.00
YoY change = 8.7%
January 2006 median price: $520,000.00
January 2005 median price: $475,000.00
YoY change = 9.5%
January 2006 median price: $785,000.00
January 2005 median price: $440,500.00
YoY change = 78.2%
January 2006 median price: $642,000.00
January 2005 median price: $467,000.00
YoY change = 37.5%
Meanwhile the number of Homes for Sale in Sonoma priced under $950,000 reached 160 today.
Homes priced above $950,000 rose to 59.
I received a listing of more new price reductions as well. Stay tuned as I verify which homes received the reductions and total the price changes. That 78.2% gain may be the kind of height that makes for a most painful fall.
When 0% can afford to buy a home do they sign up for mortgage payments for life and sign away their the earning potential of their first born child?
I went over to Ben's place tonight and asked....
"so what happens when 0% can afford to buy a house because joe shmo houseATM mortgage owner pumped so much helium into his bubble looking for his next HELOC?"
Being that I can always find a reliably smart group of people there, it was but mere seconds before my question was answered.
" Comment by Auction Heaven in '07
This happens at 0%…
Dated February 28th, 2006.
They said it couldn’t happen there, because it was
Housing market in Shanghai
American homeowners wondering what follows a housing bubble can look to China’s largest city. Once one of the hottest markets in the world, sales of homes have virtually halted in some areas of Shanghai, prompting developers to slash prices and real estate brokerages to close thousands of offices.
For the first time, homeowners here are learning what it means to have
an upside-down mortgage — when the value of a home falls below the amount of debt on the property. Recent home buyers are suing to get their money back.
Banks are fretting about a wave of default loans. Shanghai’s housing bust comes after a doubling of prices in the previous three years, a run-up fueled by massive speculation.
With China’s economy booming and Shanghai at the center of
worldwide attention, investors from Hong Kong, Taiwan and elsewhere were buying as fast as buildings were going up. At least 30 percent to 40 percent of homes sold were bought by speculators, says Zhang Zhijie, a real estate analyst at Soufun.com Academy, a research group in Shanghai.
“Ordinary people had no option but to follow the trend,'’ Zhang
on another note...
Isn't it getting tired to say "it can't happen here?" How about the comparisons with the "last housing bust" that "wasn't that bad?" Is anyone else getting tired of these faulty comparisons?
How many know that indirect and direct effects of housing on US GDP is about 3%?
If you take away the housing market of the last four years do you know what you get?
Probably somewhere around nada growth, bupkus, maybe somewhere near zip.
Does anyone know how much credit has been created in the last 20 years in the US?
$40 trillion DOLLARS.
Is there anything risky about this?
Only if the credit bubble collapses under the strain of its own load. But that won't happen right? Because this time its different? Right?
Joe Shmo has been using his house as an ATM and spending himself silly. The US has reached a negative savings rate, and the masses are in debt up to their eyeballs.
There is more consumer debt now than the last "crash."
There were ARMs in use, but the crash was not compounded by this because they were not commonly in use for the typical homedebtor. Not so today.
Now, last year alone 82% were ARM loans in the bay area. 69% in Sonoma. A large percentage those are I/O or negative amortization loans.
2003 - 36.8%
2004 - 59.4%
2005 - 69%
Anyone notice any significant differences between that last crash and this one yet?