Housing prices to free fall in 2008

[somdrenter]

According to a Merrill Lynch report, home prices will drop 15 percent this year, and declines will continue in 2009.

NEW YORK (CNNMoney.com) -- The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday.

The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010……

….The current housing crisis and the depreciation in home prices have pummeled the economy, with businesses and consumers cutting back on spending, raising the specter of a recession. "Lower sales and higher inventory for sales are lowering the velocity of transactions," said Fritz Siebel, Director of US Property Derivatives for Tradition Financial Services. "That cannot be a sign of good health for the economy."

But for those who think that the worst is over, Merrill Lynch said that housing prices still remain comparatively high. The brokerage believes that home prices are still far above historical norms when compared to other measures such as rent or GDP. "By our calculations, it will take about a 20 to 30 percent decline in home prices to correct this imbalance," said the report.

Merrill Lynch believes that housing starts will most likely slide another 30 percent by the end of 2008 - a historic low.

Housing prices to free fall in 2008 - Jan. 23, 2008

 

[HouseCat]

This is depressing. We just bought a house 2 yrs ago. Even though we got it well under the appraised value, and have totally flipped the house inside and out....we'll be lucky to break even when we sell.

So much for retiring in 5 years.

 

[toppick08]

...Wonder why my tax assessment went up on my little shack in Leonardtown.........The Democrats are in charge...........

 

[Warron]

As a non home owner, I would really like to see prices drop substantially. And I'm not talking 5%. More like 50%. But then I have no sympathy for people who flip houses or buy property as an investment. I want a house to live in. Right now I would have to double my payout every month just for a cheap 3 bedroom rambler with no land beyond what the building sits on.

 

[jetmonkey]

According to a Merrill Lynch report, home prices will drop 15 percent this year, and declines will continue in 2009.

NEW YORK (CNNMoney.com) -- The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday.

The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010……

….The current housing crisis and the depreciation in home prices have pummeled the economy, with businesses and consumers cutting back on spending, raising the specter of a recession. "Lower sales and higher inventory for sales are lowering the velocity of transactions," said Fritz Siebel, Director of US Property Derivatives for Tradition Financial Services. "That cannot be a sign of good health for the economy."

But for those who think that the worst is over, Merrill Lynch said that housing prices still remain comparatively high. The brokerage believes that home prices are still far above historical norms when compared to other measures such as rent or GDP. "By our calculations, it will take about a 20 to 30 percent decline in home prices to correct this imbalance," said the report.

Merrill Lynch believes that housing starts will most likely slide another 30 percent by the end of 2008 - a historic low.

Housing prices to free fall in 2008 - Jan. 23, 2008

I'm a homeowner. Please advise me what I should do in light of this press release.

 

[foodcritic]

Tax assesment %*&$*^%

What really bothes me is that the state of MD just "re-assessed" all residential properites. What do they base that on? Of course it was based on the value of about a year ago or the peak of the market. So.....now the state can squeeze more money out of our homes when in reality the market will adjust to 10-20-% maybe more, less than what the state says. No supprise since MD is in a budget crisis they need all the money they can scrounge up. I doubt the state of maryland is going to come back to us and say lets re-assess since the maket is down. The state has been loving this becasue its more revenue for them even though homeowners are opearting at a loss. I think we should all appeal the assessment. There is an option on the Assessment Notice we all just reveived. Oh by the way my value jumped from 184,140 to ........276,890 (phased in)

 

[thurley42]

As a non home owner, I would really like to see prices drop substantially. And I'm not talking 5%. More like 50%. But then I have no sympathy for people who flip houses or buy property as an investment. I want a house to live in. Right now I would have to double my payout every month just for a cheap 3 bedroom rambler with no land beyond what the building sits on.

As a Non home owner I am sure you would....but the rest of us that are with the program and invest our money in things such as real estate are not looking forward to this. I do not forsee it being quite as bad here as it is in other places. The job market here allows the demand to somewhat cushion the blows...Not saying it's not going to take a hit, just not a hard one.

Warron, I have some news for you pal, a house is an investment no matter how you spin it...

 

[Pete]

I'm a homeowner. Please advise me what I should do in light of this press release.

The roof the roof the roof is on fire
The roof the roof the roof is on fire
The roof the roof the roof is on fire
We don't need no water let the mother####er burn
Burn mother####er burn

 

[somdrenter]

The roof the roof the roof is on fire
The roof the roof the roof is on fire
The roof the roof the roof is on fire
We don't need no water let the mother####er burn
Burn mother####er burn

Will subprime spark an arson boom? - Jan. 10, 2008

 

[refi-rep]

It was all over CNN yesterday but a market analyst, that theres no better time to refinance if you have equity due to the interest rates being rock bottom.

 

[smilin]

Before everybody panics, here is an interesting market update sent by a loan officer from Countrywide.
Take a look at the last sentence.

Market Update

As you may be aware, Fannie Mae and Freddie Mac have now implemented a firm stance on markets labeled as soft. Soft is typically defined in one of three ways: 1. Average sales time frames exceed 6 months, 2. An oversupply exists in the market,, or 3. that the market is declining in nature. The agencies are holding mortgage companies accountable for confirming whether a home is in a soft market or not. This may mean that you will even find differences from lender to lender, but generally speaking we're all in the same boat. The following is Countrywide's current policy. I don't expect that you each become experts in our policy but it is important that you are able to prep each of your clients before sending for loan application. This will at least smooth the process if their specific home is labeled as being in a soft market.

Why the Policy has Changed:

GSEs (Government Sponsored Entities AKA Fannie Mae and Freddie Mac) and Mortgage Insurance companies have recently released soft market policies to protect themselves from high LTV/CLTV lending in areas that have declining values and/or have values projected to decline. Countrywide's previous policy has been to reduce maximum financing by 5% ONLY if the appraiser or our quality control division notes the property is in a declining market. This policy is being enhanced to pro-activley identify soft markets and reduce maximum financing accordingly.

Countrywide's Soft Market Policy for our general area:

Countrywide, and all other lenders, have created a list of identified "Soft Market" areas. The list is divided into five categories, with Category 5 being the highest risk or declining market value and Category 1 markets demonstrating the most stable market values.

The maximum LTV/CLTV is allowed IF

property is located in a category 1 through 3 area and
there are no notations on the appraisal of the property being located in a soft market.

If the subject property is located in a category 4 or 5 area or there are soft market notations on the appraisal, we must follow the directions on the warning message received in our system. Exceptions may be granted on a case-by-case basis only for Category 4 markets.

If the subject property is located in a category 5 area and the LTV is > 90% or the CLTV is > 85%, the loan must be sent to SLD for review. No exceptions allowed.

Conforming, Non-conforming, Conventional Bond and Expanded Approvals loans:
Soft Market category 5 loans must reduce maximum financing by 5%. No Exceptions.
Soft Market category 4 loans will be treated the same as category 5. However, an exception can be made to allow maximum financing if our quality control group can support and document the specific property is NOT in a declining market.
Soft Market category 1-3 loans must reduce maximum financing by 5% if the appraisal indicates: a) Declining Market, b) Oversupply, or c) Marketing time over 6 months.
For all of the above, if the loan is already 5% below the maximum allowable financing, no further reduction is required.
Enhanced Appraisal standards should continue to be applied to category 3-5 loans.
State County Category
Maryland Anne Arundel 3
Maryland Frederick 4
Maryland Montgomery 4
Maryland Washington 4
Maryland Calvert 4
Maryland Charles 4
Virginia Fairfax 4
Virginia Arlington 4
Virginia Prince William 4
Virginia Spotsylvania 4



Neither St Mary's County, Maryland nor King George County, Virginia appear on any list to date.

 

[somdrenter]

Before everybody panics, here is an interesting market update sent by a loan officer from Countrywide.

A market update from Countrywide? You’d do as good to get market conditions from American Home Mortgage.

 

[smilin]

A market update from Countrywide? You’d do as good to get market conditions from American Home Mortgage.

Really? Don't tell them that.
Anyway, the info is from the government, but condensed for the rest of us.
Check it out.

 

[somdrenter]

Really? Don't tell them that.

Shhhh, it’s a secret!

Bankruptcy fears deepen at lender - Los Angeles Times

Countrywide Financial Admits to Fabricating Evidence - Grand Rapids Personal Injury Lawyer

Bank of America saves Countrywide from bankruptcy | Business | guardian.co.uk

Countrywide Draws Ire of Judges

 

[smilin]

You know what's interesting?
I haven't heard anything in the news about BofA buying Countrywide since they said they might be having second thoughts.

 

[backagain39]

What really bothes me is that the state of MD just "re-assessed" all residential properites. What do they base that on? Of course it was based on the value of about a year ago or the peak of the market. So.....now the state can squeeze more money out of our homes when in reality the market will adjust to 10-20-% maybe more, less than what the state says. No supprise since MD is in a budget crisis they need all the money they can scrounge up. I doubt the state of maryland is going to come back to us and say lets re-assess since the maket is down. The state has been loving this becasue its more revenue for them even though homeowners are opearting at a loss. I think we should all appeal the assessment. There is an option on the Assessment Notice we all just reveived. Oh by the way my value jumped from 184,140 to ........276,890 (phased in)

Has any one figured out where our tax dollars are going in Maryland??? I see no road improvements and they are not improving education Citizens pay for trash pickup and we have alot of volunteer rescue services, so can anyone tell me where the heck the money is going?????????????

 

[smilin]

Has any one figured out where our tax dollars are going in Maryland??? I see no road improvements and they are not improving education Citizens pay for trash pickup and we have alot of volunteer rescue services, so can anyone tell me where the heck the money is going?????????????

I was thinking the same today.
Maryland must be obviously better than any other state to anybody moving here. Every time you leave, you have to notice how advanced and well off we are compared to the lower rated states.

 

[backagain39]

How can property taxes go up if the home prices are falling? Aren't the property taxes of your home based on the market??????

 

[Bronwyn]

How can property taxes go up if the home prices are falling? Aren't the property taxes of your home based on the market??????

I'm not sure, but I thought Calvert County had some of the lowest property taxes as compared to other counties??? Correct me if I'm wrong...

 

[smilin]

How can property taxes go up if the home prices are falling? Aren't the property taxes of your home based on the market??????

As of the day that the assessor drove by (or looked up) your palace.
That's why you have to dispute the amount they say it's worth. If the value of your house is dropping compared to when the assessment was done, then you better say something.
The tax assessment office is usually pretty sympathetic in St.Marys.