Why the housing bust has lasted so long....... (bank owned, real estate)

[khuntrevor]

Great article from Bloomberg. According to the writer, and her supporting evidence, the First Time Buyer Credit simply prolonged the misery.
Housing

[Zippyman]

Originally Posted by khuntrevor

Great article from Bloomberg. According to the writer, and her supporting evidence, the First Time Buyer Credit simply prolonged the misery.

Housing

If all of the foreclosures had been completed at the beginning of the crisis, this might have been a valid point. Given that foreclosures have been dribbling out of the legal system for several years, (this year is forecast to be the worst year yet), the entire premise is flawed.

There was no way to quickly "dump" all of the foreclosures into the market at exactly the same time, and doing so would have victimized those without a mortgage even more than they have already - don't forget that over 30% of the us population owns their house free and clear.

Based on the experiences of a family member who bought using the tax-credit, it was effective (he wouldn't have bought otherwise), and he used the funds to help pay for a painter, a tile guy, an electrician, a roofer, and cabinet guys. Contractors that would have had more idle/unpaid time off, except for the tax-credit. How's that a bad thing?

[khuntrevor]

Based on the experiences of a family member, who didn't take my advice,: he and his wife spent 120,000 on a TH in MN and got the 8000 tax credit, which wasn't a deal maker. However, within three months of the expiration of the credit, I could have bought the same unit for 30K less. It just created a small bubble, in an otherwise downward ski slope.

How would people without mortgages have been victimized?

[samurai_with_sword]

I bought a house last year knowing that it could not be the bottom. Ofcourse, the housing market has declined since, but I got the 8k credit, saved my apartment rent for the year and got a house at a location where I wanted. If I were to buy now, I wouldn't get 8k credit, would have paid $900x12 into apartment rent and definitely wouldn't have been able to buy the same house I have right now, it would have been gone long ago. Compared to all this the prices haven't gone down much, hardly 15-20k and they are already cumming back.

Statistically almost no-one can buy at the lowest price, you are going to miss the lowest price easily by 5k even if you had a deal going on during the true bottom of the market.

Why is it that these so called "smart" writers always have to write in retrospect?

[khuntrevor]

How does your 2012 Assessment compare with your purchase price?

[samurai_with_sword]

For property tax purpose, city has evaluated 2012 prices to be lower than 2011. But I am positive for 2012, job market is already improving, housing market will follow sooner or later.

[khuntrevor]

more than 8000 less than you paid?

[samurai_with_sword]

Well ofcourse for my case, I bought a Bank owned house for 20k less than the market price that time. But even for those who were not able to bargain well, it wasn't a bad idea (if not good) to buy a house to get 8k credit.
For 2012, you are are not comparing (2010 price-8k) vs (2012 price), rather you are comparing (2010 price -8k -$900x24) vs (2012 price). You have to count in the apartment rent for the 2 years. I think it was a good strategy because the credit motivated first time home buyers, who were paying apartment rents and were in need for a house to live in and not those who were looking for short term investment in the real estate.
Having said that I personally don't think house prices are going to fall for 2012 in phoenix metro, they will either go up a bit or stay flat. Look at the job market, phoenix is in much better shape than any big cities in California or Nevada, we are attracting laid off people from those states.

[khuntrevor]

Here are my two: Paid 22,000 on 11-18-2009 2012 Assessment=23,500
Paid 18,500 on 11-24-2010 2012 Assessment=17,800

Your turn, IT Guy.

[samurai_with_sword]

I paid 22,000 in Jan, 2010 and 2012 assessment is 17,220. I am not following you though. Why are you asking assessment value, city assessment does not correlate to the market value. They assessed 19,500 in 2006 and someone bought for 31,600.