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Falling prices trap new homebuyers
The Orange County Register ^ | December 13, 2006 | JEFF COLLINS

Posted on 12/13/2006 4:40:07 AM PST by GodGunsGuts

Wednesday, December 13, 2006

Falling prices trap new homebuyers

Neighbors in a new Garden Grove tract say a developer's plan to slash prices by about $140,000 has left them owing more for their homes than they're now worth.

By JEFF COLLINS

The Orange County Register

(Excerpt) Read more at ocregister.com ...


TOPICS: Business/Economy; Culture/Society; Extended News; News/Current Events
KEYWORDS: bubble; depression; despair; doom; dustbowl; grapesofwrath; housing; housingbubble; iluvwilliegreen; imtomjoad; prop13rules; realestate; schadenfreude; wearealltoast
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To: MeneMeneTekelUpharsin

It happened in California in the early 80's and again the early 90's, each time came back stronger than ever. I look at a home like the stock market... long term gains as long as you choose wisely in the first place.


281 posted on 12/13/2006 10:35:52 AM PST by Arizona Carolyn
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To: ex-Texan
I know this will pain you, but (from the same article)

This year, the median sales price is forecast to rise...,to 321,900, up 5.5 percent.

Psych!

282 posted on 12/13/2006 10:35:59 AM PST by Fierce Allegiance (SAY NO TO RUDY!)
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To: Steely Tom

"Democrats in Congress will have a plan for dealing with this."

Well, Bush failed to reverse price declines, even after the desperate attempt to reduce supply by dynamiting the levees in New Orleans.

Democrats may attempt to write more legislation to alter the principles of supply vs. demand.


283 posted on 12/13/2006 10:38:24 AM PST by dashing doofus (Those who are too smart to engage in politics are punished by being governed by those who are dumber)
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To: Moonman62

Probably upset because it messes with the comps in the area.


284 posted on 12/13/2006 10:40:11 AM PST by Arizona Carolyn
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To: GodGunsGuts

OK... OK...

To formalize the challenge:

IF the OFHEO reports (at about 5/15/2007) that median home prices have increased in the first quarter of 2007 from the last quarter of 2006, THEN you will owe me a limerick extolling my wisdom, etc., which shall published on one of FR's housing threads.

IF the OFHEO reports that median home prices have decreased in the first quarter of 2007 from the last quarter of 2006, THEN I will owe you a limerick extolling your wisdom, etc., which shall be published on one of FR's housing bubble threads.

Deal?


285 posted on 12/13/2006 10:44:27 AM PST by pfony1
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To: finnman69
Our housing prices, here in Arizona, are cheap compared to California. Property taxes, too. Our paper today is all in a dither because foreclosures are up from 0.41 to 0.43 and all but one are in the under $200K price of homes, only one over that price.

They also pointed out, correctly, that if a person sees a problem making their mortgage, call the lender the lenders would rather deal than have to go through the expense of foreclosing.

286 posted on 12/13/2006 10:47:58 AM PST by Arizona Carolyn
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To: Fierce Allegiance

Here's a forecast of New England home sales prices:
Connecticut:This year, the median sales price is forecast to rise...,to 321,900, up 5.5 percent.
Maine: Statewide, the median price is forecast to rise at an annual average of 1.3 percent through 2010,
Massachusetts: Prices are then expected to level off or rise slowly through 2010.
Ne Hampshire: the median statewide home price is forecast to rise at an annual average of 1.2 percent,
Rhode Island: The median home price is forecast to rise 1 percent next year,
Vermont: From 2005 through 2010, home prices are projected to rise at an annual average rate of 2.6 percent in Vermont

That sure doesn't look like any bubble to me.


287 posted on 12/13/2006 10:50:12 AM PST by Fierce Allegiance (SAY NO TO RUDY!)
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To: Petronski; Toddsterpatriot

After being called a jerk by extexan, he sure got quiet when i post some info to show who th real liar is. Gigi doesn't seem to have much to say, either.


288 posted on 12/13/2006 10:51:43 AM PST by Fierce Allegiance (SAY NO TO RUDY!)
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To: Fierce Allegiance
Blog pimps like him are allergic to facts.
289 posted on 12/13/2006 10:59:14 AM PST by Toddsterpatriot (If you agree with EPI, you're not a conservative!)
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To: pfony1

Yes, in principle. The problem is, I don't think the OFHEO numbers are as accurate as they could be. For instance, they only include numbers pertaining to loans of something like $415,000 or less, and they mix in appraisal numbers with actual sales price numbers. If you can think of a more accurate housing report, I'm game. (If we can't agree on this, I will probably still be game...but I want your word that you will make a good faith effort to assist me in finding a better one).

Also, we have to agree that we will publish said limerick every time whichever report we choose comes out for the next two years.


290 posted on 12/13/2006 11:04:23 AM PST by GodGunsGuts
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To: ex-Texan

Perhaps you will find this house to be a better "bargain":

http://www.siroffices.com/brokerages/greenwich/details.asp?Propertynumber=0063143&quicksearchyn=y&FeatureProp=y&splash=greenwich

The point I hope to make here is that applying crude statistics to discrete local markets is meaningless:

"...sound and fury -- signifying nothing..."


291 posted on 12/13/2006 11:05:44 AM PST by pfony1
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To: pfony1

You nailed his MO. Take a miniscule extreme worst case scenario and try apply it as if it were global. Chicken little syndrome.


292 posted on 12/13/2006 11:10:21 AM PST by Fierce Allegiance (SAY NO TO RUDY!)
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To: Fierce Allegiance

Must be a weekday.







Or the weekend.


293 posted on 12/13/2006 11:17:49 AM PST by Petronski (I just love that woman.)
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To: hawkaw

"Owning is still better than renting ...."

I'm renting a $400,000 home for $1,300 a month. That allows me to save an additional $2,000 a month. Now I have time to look for a great deal from a seller who has to cut their price. I'll end up buying a $500,000 house for $300,000 from a desperate developer.


294 posted on 12/13/2006 11:20:17 AM PST by FightThePower! (Fight the powers that be!)
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To: GodGunsGuts

later


295 posted on 12/13/2006 11:26:34 AM PST by truth_seeker
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To: pfony1

Now you've done it!

Gigi and extex are planning your show trial....after the revolution when the purges commence.


296 posted on 12/13/2006 11:26:47 AM PST by Petronski (I just love that woman.)
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To: bondjamesbond
What your home is worth today is irrelevant unless you sell it today.

Unfortunately, not always true. The couple in this article are one example of the situation many are in or will be in soon. You see, they have an ARM that started w/ a teaser rate. Their payment is now $3000 and will double when the ARM adjusts. They need to refinance, but they can't refi because of what the home is worth today. They can't afford $6000 a month. They'll probably lose the home and kill their credit.

Maybe I'm a jerk, but I don't feel bad for them. They knew what they were getting into. If they didn't consider the risks, that's their own fault. I guarantee they didn't need a $800,000 home.

297 posted on 12/13/2006 11:48:35 AM PST by green iguana
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To: green iguana
Maybe I'm a jerk, but I don't feel bad for them. They knew what they were getting into. If they didn't consider the risks, that's their own fault.

Oh, yeah. If you do something stupid enough, you'll get yourself jammed up. But that's always been the case, hasn't it?

If I took all my assets and converted them to singles and had a big bonfire in the backyard, I wouldn't have any cash left for lunch-money. That's why I don't do it!

298 posted on 12/13/2006 12:01:32 PM PST by bondjamesbond (Many Americans are invested in a US failure in Iraq, and will work diligently to bring it about.)
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To: pfony1

PS The OFHEO numbers also only pick up single family homes, not Condos...which often do worse than SFHs. In short, the OFHEO tends to distort housing prices to the upside. Or in the words of housing economist Thomas Lawler "...there's a growing view that this index (OFHEO)...doesn't reflect what's really going on with home prices."


299 posted on 12/13/2006 12:25:22 PM PST by GodGunsGuts
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To: pfony1

How about using the NAR report?


300 posted on 12/13/2006 12:39:45 PM PST by GodGunsGuts
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