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khyber
Joined: 16 Jan 2003
Location: Compunction Junction
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 Posted: Tue Feb 03, 2009 8:25 am Post subject: |
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New home starts are really low in edmonton. Last summer, the construction company I worked for in university (installing water and sewer lines in developments) did not put in a single new lot in all of edmonton (down from about 3000 a few years ago).
ps...with mortgage rates at well under 4% for 5 years, it's too bad more people aren't gettin' a mortgage. |
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blaseblasphemener
Joined: 01 Jun 2006
Location: There's a voice, keeps on calling me, down the road, that's where I'll always be
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| Posted: Tue Feb 03, 2009 6:00 pm Post subject: |
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| khyber wrote: |
New home starts are really low in edmonton. Last summer, the construction company I worked for in university (installing water and sewer lines in developments) did not put in a single new lot in all of edmonton (down from about 3000 a few years ago).
ps...with mortgage rates at well under 4% for 5 years, it's too bad more people aren't gettin' a mortgage. |
source please. prime is at least 5% I think. I also don't see your logic that it's too bad more people aren't getting a mortgage. If something is overvalued by 25-50%, what does it matter what the rate is? In fact, I should see that low rate as an incentive to lure people into buying overpriced homes. Also, people are buying with at most, usually 20% down.
Consider:
$250,000 home, 25% down $60,000, 8% interest= 15200
$450,000 home, $60,000 down, 5% interest= 22500
so your "savings" means you are actually paying 7 grand more a year.
and, I don't know a lot of people who have 60 G's for a mortgage. 20 is a lot for most. |
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blaseblasphemener
Joined: 01 Jun 2006
Location: There's a voice, keeps on calling me, down the road, that's where I'll always be
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| Posted: Tue Feb 10, 2009 8:29 am Post subject: |
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Found this story in an old email I sent to my brother recommending he sell his house in June of 2006. (he waited until 2008 summer, lost about $50,000 in equity but still got out before the crash).
The warnings were definitely out there, you just had to get wade through all the b.s.
| Quote: |
U.S. housing boom is biggest since 1890
Increase in home prices may have been psychological, economist says
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By Amy Hoak, MarketWatch
Last Update: 3:47 PM ET Jun 16, 2006
CHICAGO (MarketWatch) -- The recent housing boom is the biggest the United States has ever seen, but its underlying reasons may have been psychological, economist Robert J. Shiller said on Friday. New data also suggest the market might be at the end of a cycle, he added.
The only time since 1890 that compares to the recent residential real estate market is just after World War II, the Yale University professor said during a presentation on U.S. home prices, held at Standard & Poor's in New York and broadcast to journalists on the Web.
"After World War II, the soldiers came back and they wanted houses and started the baby boom. And when you had babies, you wanted houses with at least two bedrooms -- and that wasn't so common back then. They went on a buying spree and it pushed home prices up," he said.
The recent boom, however, doesn't have the same fundamental variables causing prices to soar, he said, adding that variation in such things as building costs, population and interest rates doesn't adequately explain the reason for the housing boom.
"I don't see why home prices should be shooting up that strongly," Shiller said, adding that speculation may have played a role. "It's a sign of concern."
Shiller was co-author of "Irrational Exuberance," a book that chronicled the stock-market bubble of the late 1990s. He also co-developed the S&P/Case Shiller Home Price Indices, designed to measure the average change in U.S. home prices. The indexes are based on 10 cities -- Boston, Miami, New York, San Diego, San Francisco, Washington, D.C., Chicago, Denver, Las Vegas and Los Angeles -- and are now the basis of new futures and options trading at the Chicago Mercantile Exchange.
Within that index, Shiller has noticed a short-term trend of cooling home prices that could signal an end to the cycle of steep appreciation increases. Investing in the index could help homeowners hedge against price fluctuations in their homes, he said.
Shiller said he is not allowed to invest in home price index futures.
During a question-and-answer session, he said that the stabilization of home prices could also have some effect on consumers' means of gaining equity. Low interest rates inspired people to refinance their homes, and the increasing value of their houses allowed them to pad their pockets with spending money; consumers will now have to turn to other means for financing, including credit, he said.
In the future, insurance companies may offer policies to shield consumers from lowering home prices, thanks to the futures now available, said David Blitzer, managing director and chairman of the Index Committee at Standard & Poor's, who also participated in the presentation. He identified the housing market as a continued stable investment.
"If you want volatility, go to the stock market," he said. "If you have any doubts of that, take a look at it over the past six weeks." End of Story |
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