HOUSING FEAR: The Truth about Inflation, Unemployment, Massive Defecits and the Real Estate Market

Renting my Condo in January

noreply@blogger.com (Chris) — Thu, 12 Nov 2009 03:51:00 +0000

Just an update on my situation as of November 2009.

I have been married a little over a year and I am currently taking Organic Chemistry and doing well. I am working two jobs still and have been slowly paying down debt.

My wife pretty much hates the condo because the location is 20 minutes away from her job, and her mom, and about 40 minutes away from her second job. We qualified for a 120,000 dollar mortgage, meaning we could keep ownership of the current condo and still be able to buy another 120,000 dollar home. In California or Florida that may sound like a joke but in Michigan 6 months ago that would have got you a lot of house.

The real estate market in Michigan is not working in my favor though as of right now. The problem involves the first time homebuyers credit. As a result of the credit all the good foreclosures are being fought over and are gone off the MLS in a week or two. It is not so much that the real estate market is recovering. It is just that people are looking for steals and deals and they fly off the market while the regular priced homes languish forever. We put a bid in on a house we loved and were outbid and we have not really found anything else that we like as much.

The Government just expanded the tax credit it to people who already own a home and want to buy another one.
Great!!? right??? I could just use the credit to buy another 120,000 house! and compete on equal ground with the first time home buyers!
WRONG!!! You have to own your home for 5 years, and I have only owned mine for 4 years! Talk about adding insult to injury.

My sisters lease expires in January and she agreed to lease my condo. Because we don't see any good deals right now in terms of housing, and I don't want to lose the ability to get a good renter I could trust I think I am going to rent a place 20 minutes south of here for the same price I am paying on my condo. I would simultaneously rent my old condo to my sister.

This allows me to have a tenant in my condo who I know will not destroy my place.
It makes my wife happy because she is in a location she likes much better.
And it allows me to buy some time for the first time homebuyers credit to expire and the second wave of option arms to hit possibly producing more foreclosures that I could snatch up at the end of 2010.

They say Patience is a virtue... Lets hope that stays true.

House Sales will Tank when Tax Credit Expires

noreply@blogger.com (Chris) — Thu, 29 Oct 2009 02:42:00 +0000

The first time home buyer credit is about to expire, unfortunatly I am sure congress will extend it. If congress does let it die a natural death the net result will be a huge drop in demand for homes.

With winter coming up, which is a historically slow time in the housing market, combined with the tax credit ending I think we will see the real estate market worsen.

In Michigan, the prices have fallen back to affordable levels, the problem is that everyone is losing their job so no one can really afford what is a very great price.

Lets hope the government stays out of the mess and let the free market work its magic....I can still dream right?

GOLD TO DA MOON!

noreply@blogger.com (Chris) — Thu, 10 Sep 2009 03:31:00 +0000

Back in January I wrote a post with some predictions for 2009. Almost all of them have came true exactly as I predicted or have come very, very close.

One of my predictions for 2009 was that gold would hit 1200 an ounce. Today it has soared over 1,000 and I don't think it is going to slow down just yet.

The price of gold has touched $1,000 an ounce for the first time in six months.

The move could be seen as a sign that investors believe the worst of the global recession is over and are worried about inflation.

Others who are less convinced about the strength of the recovery are moving into gold, which is usually sought as a haven from economic turmoil.

Caroline Hepker reports from New York.

I can only say one thing... "Gold to da moon Alice!"

I finally found out what happened to Miami Condo Fiasco.

noreply@blogger.com (Chris) — Fri, 21 Aug 2009 10:12:00 +0000

A Condo Fiasco
Zack Preble auctions his contract for $355,000 condo in downtown Miami. The online reverse auction drops to $215,000 before he gives up. The developer takes his unit and the 70,000 deposit.

I guess not everything has a happy ending... If you are unfamiliar you can read my last article on this fascinating story here . It looks like Zack's last ditch effort, a reverse auction, failed. He could not even recover 5,000 dollars of his 70,000 dollar deposit and finally gave up turning his condo back over to the developer and forfeiting his $70,000 dollar deposit. That is a pretty expensive lesson to learn considering that amount of money would pay off the whole mortgage on my condo in Michigan, with enough left over for a years supply of beer.

The bright side is that it was only a contract with a developer so he still has his credit history in tact, and the $70,000 dollars came as profit from selling his first house during the boom. So it really was a case of easy come...easy go.

It is a shame he never made a final post on his blog Condofiasco.com, however, it is nice to finally see how this story ends.

Anyone been to the mall lately?

noreply@blogger.com (Chris) — Wed, 19 Aug 2009 12:11:00 +0000

Talk about a total ghost town.

I never go to the mall, because I have been following the Dave Ramsey plan and getting out of debt. However, I did go last weekend because I really had a craving for a slice of Sbarro pizza. lol.

What really shocked me was just how many stores were closed. The Great Lakes Crossings mall in Auburn Hills, Michigan was once a pretty affluent area before Michigan's 20% unemployment rate started to transform SE Michigan into the post apocalyptic wasteland it is slowly becoming.

As I walked down the corridors I still saw a lot of people but about 1/3 of the stores were closed or covered up with paper. Even many of the restaurants in the food court were closed.

Once thing is for sure... When this economy does recover from the depression...SE Michigan will be one of the last places that comes out of it.

Its the price stupid...

noreply@blogger.com (Chris) — Tue, 18 Aug 2009 02:39:00 +0000

Real estate used to be about location, location, location. Now it is about price, price, price.

NEW YORK (Reuters) - One in four U.S. homes for sale on August 1 had their prices marked down at least once since landing on the market, data compiled by real estate website Trulia.com showed on Friday.

A total of 24.4 percent of homes had their prices reduced in July, up from June's 23.6 percent. The average discount was 10 percent from the original price, or $40,173 of a median house value, Trulia.com said in its monthly price report obtained exclusively by Reuters prior to its release.

When will these home debtors get it? Your house is not worth what your neighbor sold his for in 2006. It is not worth what you paid for it in 2004, and it probably can't even sell for the amount needed to pay off your outstanding mortgage balance if you bought it in the last five years.

Welcome to the new reality folks. I paid $87,000 for my condo in 12/2005. Now it is worth about $47,000. In fact my whole 20% down payment has been eaten through and I am still underwater.

Buyers don't care what you paid during the bubble. They don't care that you have had your house staged, or that you have granite counter tops. They simply want a house for as cheap as possible and with foreclosures everywhere they will not be looking at your house until the stream of foreclosures has dried up which will not be anytime soon.

Its the price...stupid.

Google Maps now shows Foreclosures

noreply@blogger.com (Chris) — Mon, 17 Aug 2009 10:38:00 +0000

Check it out!

It would be really interesting if Google could start making some headway into the real estate market and put Realtors out of business forever. Think what happened to travel agents after the internet became popular....I guess we can only hope...

House prices still falling...

noreply@blogger.com (Chris) — Sat, 15 Aug 2009 11:53:00 +0000

I love the NAR. I love how they will try to make horrible news sound better in order to advance whatever agenda they have. House prices are falling, however, it is time to celebrate because they are falling at a much slower rate than last quarter!!!

The industry group's chief economist, Lawrence Yun, called the second-quarter sales figures, which are based on a survey of its members, "a hopeful sign for the economy" because sales were up compared with the first quarter.

This is as ridiculous as a doctor telling someone that they are still going to die from a horrible disease, but worry not, you are dying at a much slower rate then you were a few months ago. Somehow I have a hard time seeing the brighter side of that situation. Here are the numbers from Reuters...

*U.S. home values posted their 10th consecutive quarterly decline, falling to $186,500 on the Zillow Home Value Index.

*Home values in the first quarter had fallen by 12.4 percent from the prior-year.

*In the second quarter, 23 percent of all owners of single-family homes with mortgages were "underwater"

*Sales of previously foreclosed homes accounted for 22 percent of all home sales nationally in June

*Nationally, the number of home sales in June fell 23.7 percent versus a year earlier Regionally, price drops were sharpest in the West (-26.6 percent), followed by the South (-10.3 percent), the Northeast (-9.7 percent) and the Midwest (-8.6 percent).

Top 10 decliners, year-over-year
1. Cape Coral-Fort Myers, Fla., down 52.8 to $84,000

2. Las Vegas-Paradise, Nev., down 39.7 percent to $141,000

3. Riverside-San Bernardino-Ontario, Calif., down 39.1 percent to $161,000

4. Phoenix-Mesa-Scottsdale, Ariz., down 36.1 percent to $131,100

5. Sarasota-Bradenton-Venice, Fla., down 34 percent to $175,800

6. San Jose-Sunnyvale-Santa Clara, Calif., down 33.8 percent to $500,000

7. Orlando, Fla., down 33.2 percent to $149,200

8. Miami-Fort Lauderdale-Miami Beach, Fla., down 33.1 percent to $207,400

9. San Francisco-Oakland-Fremont, Calif., down 31 percent to $472,900

10. Saginaw-Saginaw Township North, Mich., down 30.6 percent to $55,700

Don't break out the champagne just yet... the housing crash is still not over.

HUD Section 203(k) Rehabilitation Loans

noreply@blogger.com (Chris) — Fri, 14 Aug 2009 21:13:00 +0000

(I got a really good email from a reader and wanted to share this with everyone)

Last week a close friend of mine that recently closed on a pretty badly damaged home, asked me whether I knew of any good home rehabilitation programs. Currently, the US Federal Housing Association (FHA) administers several home improvement loans through several HUD home repair and rehabilitation programs. These programs are designed to encourage homeowners and communities to rehabilitate their homes, and are also intended as a way of increasing opportunities for home ownership.

Probably the most extensive of HUD rehabilitation programs is the Section 203(k) mortgage. This government insured loan is designed to provide families with a means to finance both the acquisition and the rehabilitation of a damaged property. In order to fund the rehabilitation, the mortgage amount is based on the projected value of the property after the work has been completed, while still taking into account the cost of the work. Lenders do not normally finance such properties because their conditions and values rarely match up to the amount borrowed. In these situations, the borrower usually has to get an interim loan (at a higher interest rate of course) to purchase the house, and then take out a second loan for money to do construction and rehabilitation work. Only after the house is finished all repairs can the borrower apply to lenders for a mortgage (with quoted mortgage rates that are typically higher) to pay off the existing loans.

Despite the many benefits that this program offers, many homebuyers I’ve talked to aren’t aware that, if qualified, they have the opportunity to finance up to an additional $35,000 to improve or upgrade their home. In order to qualify for a 203(k) loan, the property must be a one to four unit home that has been completed for at least a minimum of one year. A minimum requirement of $5,000 must be spent on home improvement projects to the existing structure of the property. Minor repairs may only be included after the initial $5,000 requirement is met. Also, the number of units on the property site must be in accordance with local zoning requirements. Homes that have either been demolished or razed are still eligible as long as some of the original foundation remains after rehabilitation. For more information on eligibility requirements visit http://www.hud.gov/improvements/index.cfm

A big word of advice: Give your loan officer at least ten weeks to finish up all the details. A successful FHA 203k closing requires additional time and effort from all parties involved.

The loan itself is incredibly complex, and the underwriting process is lengthy even for borrowers with stellar credit. To cut down on the underwriting period, find a lender that’s has experience underwriting 203K loans and does so on a regular basis.

The people who makes these video's really have a gift.

noreply@blogger.com (Chris) — Fri, 07 Aug 2009 22:36:00 +0000

Its hard not to get filled with a lot of adreniline and maybe even a little bit of hope when you watch this.

PETER SCHIFF MONEY BOMB TODAY!!!!

noreply@blogger.com (Chris) — Fri, 07 Aug 2009 03:34:00 +0000

How far will Americans be pushed before they fight back?

noreply@blogger.com (Chris) — Wed, 05 Aug 2009 18:38:00 +0000

Stick with this video until the end... It gets better and better. A little out dated but the message rings true

What happened to those "Green Shoots" everyone was talking about?

noreply@blogger.com (Chris) — Wed, 01 Jul 2009 05:36:00 +0000

Remember all that talk about the green shoots of a healthy, new economy that were sprouting this spring.

They turned out to be weeds.

I am now officially underwater!

noreply@blogger.com (Chris) — Fri, 26 Jun 2009 03:08:00 +0000

So, I finally decided to give in and sell my house for what I owe.

For those who have not been reading this blog since the start I purchased a 1 bed/ 1 bath 890 sqaure foot condo with a detached garage for $89,000 dollars in January of 2006.

I put 20% down on a 6.5% 30 year fixed mortgage.

After the down payment and 3.5 years of mortage payments I owe about $66,500 on my home.

I figure even though it would be devestating to lose $22,500 dollars in life savings basically giving the house away for what I owe on it, my credit would be intact, and I would be able to get a much larger house at a steal from someone who was taking a much bigger loss.

The problem is when I went to realtor.com I am seeing 1200 sqaure foot 2 bed/2 bath condos selling for $67,000.

Even after putting 20% down and living in the house for 3.5 years of solid payments I am underwater!!!

There is no way I can possibly sell this place without damaging my credit, and damaging my credit would defeat the whole purpose of selling it because we want a bigger house.

It is a really sad situation because while this is a fine condo for a single person, I am married now and my wife would like a real house. We are trapped here and can't move on with the next stage of our lives.

The house crash has claimed another victim.

Fantastic Interview with Ron Paul

noreply@blogger.com (Chris) — Sat, 16 May 2009 11:16:00 +0000

WHY ARE REPUBLICANS NOT SAYING THIS TO OBAMA!?!?

noreply@blogger.com (Chris) — Wed, 25 Mar 2009 19:10:00 +0000

Credit Card Companies are slashing limits and Ruining Credit Scores

noreply@blogger.com (Chris) — Tue, 24 Mar 2009 12:57:00 +0000

I am a good credit card customer. I have never missed a payment and always paid atleast my minimum payment no matter how bad my financial situation has been for almost 10 years now. You would think that credit card companies would appreciate me as a customer considering how many defaults have been taking place.

You thought wrong, I am getting the feeling that the card companies see me, and many other good customers, as defaults waiting to happen rather then the responsible customers we are.

American Express is the worst offender, they have slashed my limit twice and have been "chasing" me down as I pay off my card. It is kind of insulting that they would do this when I have given them no reason to suspect I would stop paying my bills.

I know that my credit score is much lower now simply because they have lowered my limit to just above my balance reducing my debt ratio and it pretty much sucks.

My opinion of American Express has really been adversly affected after this treatment and I really question what will happen to them in the future if they continue to treat their good customers this way.

Maybe Dave Ramsey was right after all.

This is a pretty good site that talks about credit card issues if you want some more info:
blog.creditcardflyers.com

Dead Cat Bounce?

noreply@blogger.com (Chris) — Thu, 19 Mar 2009 13:05:00 +0000

A dead cat bounce is a figurative term used by traders in the finance industry to describe a pattern wherein a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement, with the connotation that the rise was not an indication of improving circumstances in the fundamentals of the stock. It is derived from the notion that "even a dead cat will bounce if it falls from a great height".

The New World Order is about to strike a blow to freedom: World Reserve Currency to be proposed @ G20

noreply@blogger.com (Chris) — Wed, 18 Mar 2009 16:21:00 +0000

In this post back in December, I showed a video of Alex Jones interviewing Ron Paul about the NWO making a move to have a global currency and the inevitable loss of American Sovereignty.
The general consensus at the time was Alex Jones is a nut case and this would never happen:

Well friends...It really is happening and the evidence is right here:

At G20, Kremlin to Pitch New Currency
17 March 2009, Moscow Times Article:

The Kremlin published its priorities Monday for an upcoming meeting of the G20, calling for the creation of a supranational reserve currency to be issued by international institutions as part of a reform of the global financial system.

The International Monetary Fund should investigate the possible creation of a new reserve currency, widening the list of reserve currencies or using its already existing Special Drawing Rights, or SDRs, as a "superreserve currency accepted by the whole of the international community," the Kremlin said in a statement issued on its web site.

The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries.

The Kremlin has persistently criticized the dollar's status as the dominant global reserve currency and has lowered its own dollar holdings in the last few years. Both President Dmitry Medvedev and Prime Minister Vladimir Putin have repeatedly called for the ruble to be used as a regional reserve currency, although the idea has received little support outside of Russia.

...

The Kremlin document also called for national banks and international financial institutions to diversify their foreign currency reserves. It said the global financial system should be restructured to prevent future crises and proposed holding an international conference after the G20 summit to adopt conventions on a new global financial structure.

The Group of 20 industrialized and developing countries will meet in London on April 2.

The Obama Prayer

noreply@blogger.com (Chris) — Wed, 18 Mar 2009 12:26:00 +0000

OBAMA'S PRAYER

Our Obama, who art in Washington
Flip-flop be thy name.

They Presidency come, they will be done
In D.C. as it was in Chicago.

Please take away our daily bread
And raise our taxes
As we appease voters who want social services.

And lead us away from self defense
And deliver us from sovereignty.

For thine is the way of globalism
And the power of Socialism
Forever and ever,
Yes we can.

Why is Congress Crying about AIG Bonus when they Created this mess with Bailouts?

noreply@blogger.com (Chris) — Wed, 18 Mar 2009 04:10:00 +0000

Someone help me understand the logic here...

If I was emperor of America, AIG would have been allowed to fail, the company would have went bankrupt and no one would have gotten a bonus. Voila!

However, Congress in all of its wisdom, decided to bailout an insolvent insurance company (AIG). The company was insolvent because it was poorly ran.

So please tell me why Obama and congress are all in an uproar that the same morons who are responsible for the poor business choices that led to AIG's demise would make an equally foolish move in rewarding bonus's with ill-gotten taxpayer money.

Don't you get it you monkeys? you created this mess! you allowed this to happen by bailing out an insolvent company which would not even be around right now to issue a bonus check if not for your wrong doing in the first place.

When you reward stupidity...stupid will keep happening.

Bernard Madoff Looks like George Washington

noreply@blogger.com (Chris) — Sun, 15 Mar 2009 02:53:00 +0000

Ever laugh so hard you cry?

noreply@blogger.com (Chris) — Thu, 12 Mar 2009 16:38:00 +0000

The blog MiamiCondoInvestments.com is a daily must read. The blog is ran by a Miami Realtor named Lucas who uses his blog as advertising to sell condo's, fair enough.

However, what makes the blog spectacular is the cast of characters who frequent it daily and constantly bicker, insult, and battle with eachother about the true value and future price of Miami condo's.

As I was reading the comments I noticed a debate had erupted over the idea that rich investors from latin America would save the condo market by purchasing the inventory. What follows are four comments from someone obviously pretending to be potential latin american investors which I feel is pure comedic gold, and they have to be shared.

I laughed so hard I cried, so I am hoping you enjoy these almost as much as I did... here we go...

Che Cavera /Mar 9, 2009 at 7:57 pm Vote:

As a formerly rich citizen of the Bolivarian Republic of Venezuela I am not offended by the Ace remarks for he speaks the truth. Venezuela like all of South American countries are extremely poor and those few Venezuelans that had money lost it all to Hugo Chavez. Just like Fidel Castro he took over the banks, the railroads, hospitals, refineries and most other private enterprise and property. If you weren’t fortunate to escape with your wealth then what you have left is worthless because it can only be sold at what the Chavez government says it is worth. I now sell used cars in Miami for a living and live in a small rented house with my wife a seven children I can assure you that I cannot afford the over priced Miami Condos but I dream of better days.

Pablo Picasso /Mar 9, 2009 at 8:39 pm Vote:

I come from San Pablo, Brazil and if I were to paint a picture of the slums in my home country it would offend your senses. As I never made it as a soccer player I came to the US as an illegle and been in Miami for 10 years and I me and my friends may squat in one of these Condos, we like the Jade!

(For those who don't know Jade is perhaps the most luxurious and expensive condo in Miami)

Speedy Gonzalas /Mar 9, 2009 at 11:21 pm Vote:

Speedy Gonzales

Sie senior I come frrom Guatamala and I must agree wid the Ace he the man that predicked $125.00 per squre inch I like to buy at that. Arrrrrrriba , ondelay! ondelay!

Salvador Dali /Mar 10, 2009 at 12:32 am Vote:

Many of you may find this abstract but the reality is we South Americans cannot aford the price of a taco let alone a condo.

(LMFAO!)

Peter Schiff Was Right

noreply@blogger.com (Chris) — Thu, 12 Mar 2009 13:27:00 +0000

HousingFear Quote of the Day.

noreply@blogger.com (Chris) — Thu, 12 Mar 2009 03:35:00 +0000

$75 per sq ft is what Miami condos will soon be worth. We are looking at a period of 5 years (at least) thru which prices will slide and slide and slie. Once the food riots and civil unrest get underway…yes in Miami…you’re are going to see prices come off faster than clothes off a hooker.

-Cockatoo@MiamiCondoInvestments.com