Housing prices to free fall in 2008

[chuckster]

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.

Warren, I am with you. Like you I have no sympathy for the people who purchased more house than they could pay for. Greed has priced the average family out of the house buying market. I hope that we get a President in office who will cut the crazy spending, cut back the salaries of or eliminate jobs that our taxes have to pay for and reduce all of the waste.
If people who fell for the get rich quick real estate game are looking for sympathy, tell them to look in the dictionary between sh%t and syphilis.

 

[somdrenter]

Countrywide Earnings Eyed Before Deal

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.

Saturday January 26, 5:35 am ET
By Alex Veiga, AP Business Writer
Countrywide Earnings Could Heighten Doubts About Bank of America Takeover

LOS ANGELES (AP) -- Investor concerns that Bank of America Corp. might try to pull out or pay less for Countrywide Financial Corp. could intensify next week when the troubled mortgage lender reports 2007 year-end financial results.

After posting a $1.2 billion loss in the third quarter ended Sept. 30 -- its first quarterly loss in 25 years -- Countrywide declared it would post a profit for 2007's final three months and through this year.

Wall Street has its doubts -- most analysts expect Countrywide to post a fourth-quarter loss -- and will be watching closely Tuesday when the Calabasas-based company reports its results……

….. "Bank of America is going to take a close look at Countrywide's business and see ... whether or not it is able to get value from the purchase," said Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co.

"With the continued weakness in the market, it's not as clear ... that Bank of America is going to be willing to step up," he said…….

…. The housing slump has pummeled mortgage lenders, as home price declines have led to record levels of mortgage defaults, causing multibillion-dollar losses at many financial institutions left saddled with mortgage-backed securities that went bad……

Countrywide Earnings Eyed Before Deal: Financial News - Yahoo! Finance

 

[thurley42]

Warren, I am with you. Like you I have no sympathy for the people who purchased more house than they could pay for. Greed has priced the average family out of the house buying market. I hope that we get a President in office who will cut the crazy spending, cut back the salaries of or eliminate jobs that our taxes have to pay for and reduce all of the waste.
If people who fell for the get rich quick real estate game are looking for sympathy, tell them to look in the dictionary between sh%t and syphilis.

He wasn't talking about people buying more house than they could afford, he was talking about people who flip houses. That is two completely different things.

If you knew anything about investing you would know that real estate has been one of the more stable forms of investment to date. Like every market there are ups and downs...

I guess you could look for the definition of people like this between broke and uneducated...

 

[smilin]

Saturday January 26, 5:35 am ET
By Alex Veiga, AP Business Writer
Countrywide Earnings Could Heighten Doubts About Bank of America Takeover

LOS ANGELES (AP) --
After posting a $1.2 billion loss in the third quarter ended Sept. 30 -- its first quarterly loss in 25 years -- Countrywide declared it would post a profit for 2007's final three months and through this year.

Wish I could "post" a $1.2 Billion loss, then declare a profit.

 

[somdrenter]

Update

Wish I could "post" a $1.2 Billion loss, then declare a profit.

Countrywide: From bad to worse

The troubled lender posted a $422 million loss and revealed that a third of its subprime loans are delinquent.

NEW YORK (Fortune) -- Countrywide on Tuesday reported a loss of $422 million in the fourth quarter and revealed that an astounding one-third of its investment portfolio's sub-prime mortgage loans are delinquent.

The loss threw cold water on Countrywide chief operating officer Steve Sambol's confident assurances to investors in October that, "We view the third quarter of 2007 as an earnings trough, and anticipate that the company will be profitable in the fourth quarter and in 2008." Seen in this light, Countrywide's fourth-quarter loss, compared to a $621 million profit a year ago, is what the numerous class action attorneys circling Countrywide (CFC, Fortune 500) will surely call "an unfavorable fact." Countywide finished 2007 with a loss of $704 million…….

……. As home values drop to levels far below the mortgage amount, it simply becomes more economically advantageous for certain borrowers to hand over their keys. In a foreclosure, a mortgage lender often winds up booking losses that approach or even outstrip its loan amount when it sells the property into a distressed market.

Countrywide's bad news - Jan. 29, 2008

 

[papercutz]

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)

Yes, alot of people in my nieghborhood have been compllaining about the tax assessements and the fairness of them. Need to start a citizens action group and get talking.
~~~~~~~~~~~~~~~~`
Just called the calvert county treasurer office, she told me that areas of district 03, Dunkirk, Huntingtown etc..the areas up north have been assessed and need to apply for the Homestead property tax credit to recieve it. The southern part of Calvert, CRE for instance will be re-assessed next year and the Homestead property tax credit is automatically given but next year it will need to be applied for which will be in the form of an application on your tax bill. I ask her soooo, next year they will assess and bring the assessments more in line to the current market...she laughed and said "yes, they should", BUT...and then she didnt say anything.. Heard on the news Merill Lynch is saying the house values will continue to fall into 2009. Good news for new homebuyers..bad news for people like myself who bought at the height of bubble

 

[somdrenter]

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

Countrywide reportedly under FBI investigation
The troubled home loan servicer is being probed by Feds for using fraudulent lending practices, financial reporting.
March 8, 2008: 10:08 AM EST

NEW YORK (CNNMoney.com) -- The FBI has launched an investigation into the lending practices of battered home lender Countrywide Financial Corp., according to a report in The Wall Street Journal. The mortgage company is suspected of widespread fraud, the paper said, which may have contributed to the subprime mortgage crisis that has rocked the U.S. economy.

The probe will examine underwriting and mortgage origination practices, and whether the company misrepresented losses related to subprime loans.

Countrywide reportedly under FBI investigation - Mar. 8, 2008

 

[LexiGirl75]

This isn't good, I may need to apply for grocery money soon.

 

[This_person]

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

The National Association of Realtors expects that existing home sales will rise to nearly 6.4 million in 2008, which is up 6.1 million from the 2007 estimate. As for new homes, sales are projected to be at 865,000 homes sold in 2007, and 878,000 sold in 2008. More than 1.4 million housing starts, which include multifamily units, are expected this year and in 2008, which is down from 1.8 million in 2006.


All in all, existing-home prices are expected to gain 1.8 percent to a median of $222,700 in 2008 after this year's decline of 1.4 percent to $218,800. The median of new home prices should rise 2.2 percent to $245,400 next year after this years 2.6 percent drop to $240,100. "Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008," said Lawrence Yen, NAR senior economist in a release.

Despite the present market contraction, Seiders said that housing should begin to turn around next year for a number of reasons: the overall economy and job growth continue to move ahead at a decent pace, core inflation is under control, the late-summer credit crunch in mortgage markets is showing signs of easing since the Federal Reserve cut short-term interest rates on September 18, and the supply-demand equation will be better balanced as builders begin to whittle down excess inventories.

In the middle of 2008, however, the market is expected to rebound, said economist Ryan Ratcliff, who specializes in regional forecasts for the closely followed UCLA Anderson Forecast.

"I think you'll start seeing light at the end of the tunnel next year," Ratcliff said.

Some people's crystal balls give different answers than other people's crystal balls......

 

[Pandora]

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.

Breaking even isn't such a bad deal. I sold my first home in '97 and wrote a check for close to $1,000. As much as that sucked, it could have been worse. Many were going to the settlement tables with checks in the neighborhood of $20K or more.

We've been here before, in this place with the housing market. I am just waiting to see where we will be next year this time, after the election.

 

[refi-rep]

Things will get better, not today or tomorrow but soon. Nothing stays the same long.

 

[kelb]

Things will get better, not today or tomorrow but soon. Nothing stays the same long.

but some people are in different situations then others. Should you sell now or wait and get roomates in hopes that the market changes in a year or so...?

 

[Solja_Boy]

but some people are in different situations then others. Should you sell now or wait and get roomates in hopes that the market changes in a year or so...?

That will depend on what your goal is. For example I have a house that I am pricing very aggressively and selling at huge discount. I will be using the money from the sale to close on a much larger house. I bought my place about 10 years ago so I have room to play with.

 

[somdrenter]

Some people's crystal balls give different answers than other people's crystal balls......

Quotes from the NAR? Sure. You’ll rarely hear a Realtor® speak negatively of the market, their commissions depend on it.

As for the other two, many economists have revised their outlook. Quite a few things have come to light since May and October of last year, and lenders are still taking write offs.

 

[somdrenter]

but some people are in different situations then others. Should you sell now or wait and get roomates in hopes that the market changes in a year or so...?

Why would you get roommates?

 

[kelb]

That will depend on what your goal is. For example I have a house that I am pricing very aggressively and selling at huge discount. I will be using the money from the sale to close on a much larger house. I bought my place about 10 years ago so I have room to play with.

I pretty much have to do one or the other. Either get roomates now or sell now. I bought my house 2 years ago when they were giving you any loan at all. Now that its just me living there I cant afford it so I have to get roomates or sell. I just dont know when I should sell. now or wait?

 

[butterfly08]

I really hope the housing prices drop as dramatically as people are saying. I was looking to buy this month...but house prices where I live are so high! I'm gonna rent for another year and hopefully it will work out then...

 

[Solja_Boy]

I pretty much have to do one or the other. Either get roomates now or sell now. I bought my house 2 years ago when they were giving you any loan at all. Now that its just me living there I cant afford it so I have to get roomates or sell. I just dont know when I should sell. now or wait?

Did you put a big deposit down on your house 2 years ago when you bought? If not you will probobly end up owing the bank some money when you sell.

If you plan on staying in the area I would get a roomate and sell later if it is possibe.

If you casn't aford the house you may have to sell now and buy a cheaper house.

 

[stlrnd4]

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?????????????

The money is going to the people he just gave raises.

I knew we should have stuck with Erlich (sp?)