CNN Money Tell the World a little of what is happening.
I think its worth blogging when news is getting out to Joe Sixpack. However, this one, while quite bearish, is another one of those "it will turn around soon articles."
In a new survey, Moody's Economy.com says many metro areas will record losses of 20 percent or more during the downturn, with the national median price for single-family homes dropping 13 percent through early 2009. Factoring in discount offers from sellers, the actual price decline would be well over 15 percent.
Eighty of the 381 metro areas covered by the report will record double-digit losses, according to the report. Most of the worst-hit markets are in once high-flying areas, such as California and Florida.
The article goes on to describe how 'buying for investment' is adding to the flood of inventory. But what it doesn't go into is the change in the credit market.
On the housing bubble blog yesterday a poster was noting a radio add for a Jumbo loan on 'old school rules.'
1. 20% down
2. Required proof of 3 years of reserves (effectively another 20% down kept in the bank).
Wow! Its been since the 1970's since we've seen those rules. I was preparing for 30% down and some reserves. 40% (half down, half in reserves) would knock me out of the market for another year. A year where about two dozen people would qualify to buy in the big 'Jumbo Markets.'
I cannot think of anything that would knock down California or DC harder or faster than a return to strict Jumbo lending.
Enjoy your Christmas. January and February provide the best buyer's schadenfreude of the year. So ask that special someone for a popcorn popper! (Or, do it the 'old school' way, like I do, just on the stovetop in a pot.)
Got popcorn?
Neil
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4 comments:
40% (half down, half in reserves) would knock me out of the market for another year.
Wrong perspective.
You don't have to buy, but they have to sell, so if 40% is double what you have then the price has to come down 50%.
TJ,
Oh, I should have noted... it will let the market correct for a year. :) I agree... the down payment basically won't change as the requirements go up as so few have the savings.
Neil
I cannot think of anything that would knock down California or DC harder or faster than a return to strict Jumbo lending.
How about the LAO suggesting the elimination of the home mortgage interest deduction from CA income tax? There has got to be a chill in every realtor in the state that she even mentioned it.
There is no loss: Home prices need to be affordable. Period. The new media should celebrate lower home prices.
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