Trends

[SHELLY]

But in the event that this hole gets deeper than anticipated, what do y'all think of Jim Kramers plan for the Feds to buyout mortgage insurers and help bailout Banks?

I'm against the government bailing out any businesses or individuals who risked it all. Too many of the mortgages are...shall we say...garbage at worst and "questionable" at best.

All this talk of "buyouts" and "handouts" and "rate increases" are only postponing the pain and unfairly dumping more debt on future generations.

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[Bobby J]

I'm against the government bailing out any businesses or individuals who risked it all. Too many of the mortgages are...shall we say...garbage at worst and "questionable" at best.

All this talk of "buyouts" and "handouts" and "rate increases" are only postponing the pain and unfairly dumping more debt on future generations.

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But you also know they are not going to let it happen this year.

 

[SHELLY]

But you also know they are not going to let it happen this year.

No, they'll just pass the bill along to that cute little tike in your avatar.


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[full time]

Prices are down or are heading down towards 2001 levels. People that have to sell will sell, lenders will write off losses, property taxes and insurance costs get slashed in line with the decreased property values, some go belly up and some don't, the government does whatever the government is want to do, people buy because the holding costs are more in line with rental rates and personal income and the market will have resolved itself. As for China .... I believe it is preparing to host the Olympics. BTW, a study came out today saying global warming will diminish the number of U.S. landfalling hurricanes. I kid you not.

 

[Mango]

I'm against the government bailing out any businesses or individuals who risked it all. Too many of the mortgages are...shall we say...garbage at worst and "questionable" at best.

All this talk of "buyouts" and "handouts" and "rate increases" are only postponing the pain and unfairly dumping more debt on future generations.

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I was speaking only of bailout of mortgage insurers. The insurers on the whole followed Fannie/Freddie guidelines. The Banks underwrite the loans, (sold on secondary to Fannie) subject to MI approval. Matter of fact, most Banks had MI companies underwrite the entire loans on their behalf.
If MI companies fold, it trickles right down to Fannie and Freddie, and it becomes the gov'ts problem anyway. Without mortgage insurance, you step back in time to the Depression era. IF, and I say IF with great hesitancy, MI companies folded, they would have to intervene anyway.
I don't agree with Kramers plan to sell shares to Warren Buffett, but it is entirely possible to sell MI back securities. Also, lower the LTV to 75% instead of 80% and increase rates in 5% increments as they are done now. Mortgage interest rates are at historic lows, housing prices are down. An increase in MI rates shouldn't impact someone's payment that significantly.

 

[beachmouse]

I don't see 2001 housing prices happening again because that would put them significantly under current rental rates. And the BRACiness is going to spill over to Freeport and west of Sandestin to some degree- there's a decrease in the amount of base housing at a time when they're increasing personnel, and not everyone is going to want to go to Midway or north Cresview to find a place to live.

So while prices may still have a little to drop, the under $350K segment stabilizes somewhere around early 2004 prices.

I can't see insurance costs going down. Replacement costs don't always have much to do with market prices, especially when market has so much to do with land costs.

 

[SHELLY]

I don't agree with Kramers plan to sell shares to Warren Buffett, but it is entirely possible to sell MI back securities.

The way I heard Cramer explain it yesterday Buffett would pick up the Muni's only--the U.S. taxpayers would be stuck with the toxic mortgage crap.


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[full time]

After name and address, replacement cost is the first inquiry of every property insurance agent with whom I've done business. I've never been asked the cost of the dirt. During the height of the frenzy, building costs were probably 20 to 30% higher than today. Rates are determined by risk assessment ... the cheaper to replace the lower the risk. If you pay $800,000.00 for a 2400 sf house, you probably don't need a million bucks worth of insurance. Call your agent and see what your rates are if you lower your replacement costs by a third. You'll also have more carriers willing to underwrite more policies because of the reduced risk of loss, creating competition. It may take some time for people to reduce the amount of their coverage, but it will happen as housing prices and construction costs fall.

 

[JoshMclean]

The homes below $300,000 are already selling pretty well. I showed property today to a couple from Virginia and they were shocked at how much the prices had fallen. They said that homes where they were from in Virginia were pricier than many they saw today. They are wanting to get a place here and both of their sons are looking to buy also.

 

[SHELLY]

The homes below $300,000 are already selling pretty well. I showed property today to a couple from Virginia and they were shocked at how much the prices had fallen. They said that homes where they were from in Virginia were pricier than many they saw today. They are wanting to get a place here and both of their sons are looking to buy also.

Why do you think there's no interest in homes above $300K? And what were those presently-priced < $300K homes selling for in '05?



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