Posted on 10/23/2005 12:24:56 PM PDT by ex-Texan
There is some problem, but don't overblow it. If property values decline, it doesn't mean you get forclosed on, it just means you are backwards in your mortgage just like a new car, in time property values and paying on your mortgage will put you in the black. True?
my renters are making my payments and I'm 50 and 70% LTV, why am I supposed to sell. The population is increasing and renters are on the prowl for rentals. In 7-10 years the properties will double again. I like you people who want to jump off the coaster when the ride is much longer.
Is there a corresponding article on mutual funds by a real estate investor? LOL!
I think Portland has a major bubble, prices just increased on herd buying, nothing to show incomes are up.
When the Nasdaq was at 5000 about 3000 points ago, there were a lot people who thought that they were rich. That is because money was chasing more money, and the momentum looked like it would go on forever. I agree with the author, markets become dangerous when amateurs and newcomers are making money riding the momentum and there seems to be no appreciation of risk. Complacency, when you see it in a market which has prospered it might be wise to take some profits off the table. It would be very unwise to leverage the equity which may have recently came your way. History tells us that momentum in any market is not one directional.
Self-ping for later read.
bump
Interest rates always go up, and they always come back down. Hubby finished grad school and got his first job in 1980. Interest rates were running about 17 - 20% at the time. We knew that we couldn't afford to buy a house then, so we didn't. We rented for three more years, then had saved enough to put 20% down on a house. At that point, the rates had dropped to about 8%.
When we moved to MA, the rates were about the same. We've been here almost 18 yrs, our house has doubled in price since we purchased it, and when we last refinanced, I think the interest was something like 4-1/2%. I'm just saying, let's keep some perspective and not be jumping out of windows over the real estate bubble possibly bursting, because in the long run, it will work itself out.
It just might crash and burn in some markets.
Six months ago I had a 23 year old waiter tell me about the two-family house he was buying (no money down) the next day. It needed work and was in a 'bad' neighborhood but he was optimistic that he could flip it.
It is not a good market. The roller coaster can't keep going up. I've been selling, not buying - and I'm not concerned about missing a big run-up in prices. I already had the run-up. Time to sit at the sidelines now.
Wrong. Read your mortgage agreement carefully, especially if you have an adjustable. If the value of the property falls below the amount on the mortgage you have what the lender calls a non-performing loan - even if you have never made one late payment.
Don't know. Bill Gross runs a huge bond fund, and knows about interest rates.
Also, Fannie Mae's earnings troubles due to derivatives are VERY troubling for the economy in general and real estate in particular
I just being sarcastic hearing that a fund manager suggests not investing in RE.
Thanks, Read the fine print? Is that what your saying? LOL...
I guess I won't take the cash out option on my property for loan consolidation then. I've been bombarded by loan companies
spamming me to take out the $70,000 in increased value they say has accrued just THIS YEAR!
I've heard of underperforming loans, what a crock if you are making your payments on time! No wonder Congress rushed the new bankruptcy laws through..... I'm beginning to lose faith in my congress critters, LOL.......
A lot of people have gone under because of 'underperforming'loans. I had a good friend who had a million dollar loan secured by a 2 million piece of property. He had never once made a late payment on that loan or any loan. In the early 90's when real estate values went down 40 to 50% they notified him that they were calling the loan. He had a stroke - I'm sure from all the stress. He managed to hold onto the property. Thousands of homeowners were not as lucky.
I felt the same a you a year ago after we went through three devastating hurricanes. The market has gone through the roof since then. House values are sky high. I was hoping for a different situation, since I bought this year, but it looks like values will go up from here.
They say in busienss there is no such thing as bad PR; and these hurricanes seem to back up that statement. Apparently, a lot of people wanted to join in on the fun of power outages and roof repairs.
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