Housing market peaking?

[Zebco The Clown]

Before 2018 do yall remember all the 125s, low doc and no doc loans?

I remember them prior to 2008. The low doc and no doc loans went to people with very high credit scores though, with assets, usually business owners who wrote off all their income to avoid taxes, but otherwise had plenty of money in reality. I also remember the >100% LTV loans were never no-doc. And the no docs were usually capped at 80% LTV.

Those didn't go to Billy and Katrina.

 

[Doug B.]

People quit making payments is why the banks foreclosed. Why would a bank take a house from someone that is making payments on their loan? They don’t and they didn’t. I went a year without making payments and my bank flat out told me they don’t want the house they want me to stay in it. I did a modification and now my payment is less than I could rent something equal to it.

That's not what happened to everybody. Why would a bank take a home from somebody that is making payments? They won't. But just as quick as me and my wife both lost our jobs in 2012 they couldn't get us out quick enough to suit them. And it wasn't because of bad credit. My credit score was probably better than 97% of Americans. My credit score is good enough that after filing bankruptcy in 2012 I was able to buy another house in 2016 that I have a mortgage on and I'm living in it now. The bank did not give me a chance to stay in my house and refinance or anything. So why will a bank take a house from anybody making payments? They will. And they did.

 

[alwayslookin]

I saw one of my old neighbors buy a house around 2006 and get a loan way above it's value. He told me what he got in cash at closing. Not sure how that happens...shady appraisal at the least. He took the money and did some upgrades but also bought a new truck. That house got foreclosed on a few years later.

I think it's definitely peaking again now. People have money from staying home during covid and the good economy we had prior. Then you have a lot doing refi's and spending...my lender was hammering me for a refi due to low rates and I'm sure many folks bit and spent or are still spending that money.

Then you have all the folks that sold up north or out west and are moving south (read an article that four states people are moving south from the most are - NY, NJ, IL, CA)...so they cashed out somewhere else, moved, and there's a big chunk of your new/existing home buyers if I had to guess.

But now those things are tapering off and you have record inflation, gas prices, rising material/food/service prices, and now rising interest rates, you're gonna see folks closing up their wallets more and more. Like someone said it's been baked into the dish, it just hasn't come out of the oven yet.

 

[furtaker]

I saw one of my old neighbors buy a house around 2006 and get a loan way above it's value. He told me what he got in cash at closing. Not sure how that happens...shady appraisal at the least. He took the money and did some upgrades but also bought a new truck. That house got foreclosed on a few years later.

I think it's definitely peaking again now. People have money from staying home during covid and the good economy we had prior. Then you have a lot doing refi's and spending...my lender was hammering me for a refi due to low rates and I'm sure many folks bit and spent or are still spending that money.

Then you have all the folks that sold up north or out west and are moving south (read an article that four states people are moving south from the most are - NY, NJ, IL, CA)...so they cashed out somewhere else, moved, and there's a big chunk of your new/existing home buyers if I had to guess.

But now those things are tapering off and you have record inflation, gas prices, rising material/food/service prices, and now rising interest rates, you're gonna see folks closing up their wallets more and more. Like someone said it's been baked into the dish, it just hasn't come out of the oven yet.

And on top of that apparently half of America isn't working by the looks of this labor shortage everywhere.

 

[Mike 65]

I have never been more thankful than I am right now for my paid for homes!

 

[kmckinnie]

Mine is paid for too. That’s one burden I don’t want.

 

[Dub]

I just got my property tax notice for this year. They say my house is worth 98.9% more than what I paid for it five years ago. Looking at nearby sales it's not out of the question so probably not even worth appealing.

It's not sustainable. It will come crashing down. Then all those upside down folks will start crashing down if there's a job loss or some other reason they have to sell, and they owe double what it's worth. It will be 2008 all over again. Very bad for the economy.

 

[NE GA Pappy]

another stick on the camel's back.

It's gonna break, we just don't know when


https://www.foxbusiness.com/politics/biden-canceling-student-debt-make-inflation-worse

 

[mallardsx2]

Population control is what's really needed. Until that happens there will be a huge demand for housing that will never subside.

I personally don't see it slowing down anytime soon. People need roofs over their heads and people are reproducing like rabbits nationwide...

My house and property value has went up 30% just since I started building a little over a year ago. It just appraised higher than what we build it for.

Gainsville is moving this way and my land and home value is going up and up and up. I highly doubt it will ever be worth less than what it is today and to think that is pure speculation IMHO.

I think a $300K-400K house right now in 20 years will be worth a million. But thats just me.

Pella windows have went up 75% in the last year....

 

[elfiii]

What red flags? I haven’t read a single economist that is predicting a crash.

None of them predicted a crash in 2008 either. A crash is coming. It's going to be the mother of all crashes. That's because this debt balloon financed economy we're living in is the mother of all debt balloon financed economies. The thing about debt balloon financed economies is sooner or later the balloon always pops. This one isn't going to pop. It's going to detonate.

US government debt is now 130% of GDP and growing exponentially. As a friend of mine's Depression/WWII era dad always said - "There's got to be a Pay Day some day". That "Pay Day" is coming soon.

 

[Russdaddy]

I agree completely....It is a ticking time bomb. a game of hot potato where everyone is going to be left holding pieces of the potato.

 

[ddavis1120]

it is what happened. I am glad it didn't happen to you. If the bank when under, the new bank that bought the assets were foreclosing on any loan that did not have the gooberment required amount of collateral. Whether or not they were current. I know of at least 4 people personally that this happened to here in Toccoa. I had to have a refi with my home, even though I was current and even though I owed less than 40K on a 300K home. The banks made us go thru a refi with new appraisals and the whole 9 yards.

Your bank probably didn't go under and bought out by another gooberment approved bank is the reason your banker worked with you. I am glad for you that they did.

That's a new one on me. I've never heard of anything even remotely similar. There may be a "collateral" clause in the mountain of pages you sign for a closing but I've never heard of a bank basically calling a mortgage that wasn't in some kind of default.

To the contrary most people I know that had issues such as Guth; the banks bent over backwards to keep from having to foreclose because the bank was going to lose more money on the foreclosure than deferring the payments.

I heard some banks did suspend home equity loans and wouldn't let people pull more out even if the HELOC called for a larger lending balance.

 

[jdgator]

I suspect inflation is going to drag down the economy until consumption falls, commodity prices come down, and supply chains catch up.

 

[NE GA Pappy]

T

To the contrary most people I know that had issues such as Guth; the banks bent over backwards to keep from having to foreclose because the bank was going to lose more money on the foreclosure than deferring the payments.

that may have been on the banks that survived. My bank went under and was bought by another bank that went under and was bought by a 3rd bank.

they foreclosed on hundreds of homes here that were current but wouldn't appraise and the people couldn't produce enough cash to cover the loan/value deficit

 

[Mexican Squealer]

Never heard of such

 

[mguthrie]

None of them predicted a crash in 2008 either. A crash is coming. It's going to be the mother of all crashes. That's because this debt balloon financed economy we're living in is the mother of all debt balloon financed economies. The thing about debt balloon financed economies is sooner or later the balloon always pops. This one isn't going to pop. It's going to detonate.

US government debt is now 130% of GDP and growing exponentially. As a friend of mine's Depression/WWII era dad always said - "There's got to be a Pay Day some day". That "Pay Day" is coming soon.

You’ve been saying this for 2 years. You also said the commercial real estate was going to crash because of stay at home work. It is thriving. One of my builders continues to develop commercial property that is pre sold. You said that the Covid forgiveness program was going to create untold foreclosures. That program is over and it’s not happening. I have high respect for you and appreciate your wisdom but so far,it’s not happening. I’m a glass half full kind of person and just taking things one day at a time and preparing for the future

 

[jdgator]

Look at what happened to home values back in the early 80's when inflation was running rampant. High interest rates and inflation didn't have much of an impact.

View attachment 1148971

Interesting! Do you happen to know if the prices in the graph are adjusted so we are seeing everything in 2022 dollars? I would like to know if the prices were just rising with inflation or actually increasing.

 

[livinoutdoors]

Look at what happened to home values back in the early 80's when inflation was running rampant. High interest rates and inflation didn't have much of an impact.

View attachment 1148971

With respect this aint nothing like the 1980s. In fact, this isnt like anything before it. Sure there are similar things here and there, but we've run the train at full crazy this time.

 

[mguthrie]

That's a new one on me. I've never heard of anything even remotely similar. There may be a "collateral" clause in the mountain of pages you sign for a closing but I've never heard of a bank basically calling a mortgage that wasn't in some kind of default.

To the contrary most people I know that had issues such as Guth; the banks bent over backwards to keep from having to foreclose because the bank was going to lose more money on the foreclosure than deferring the payments.

I heard some banks did suspend home equity loans and wouldn't let people pull more out even if the HELOC called for a larger lending balance.

So easy even a cave man could do it

 

[mguthrie]

that may have been on the banks that survived. My bank went under and was bought by another bank that went under and was bought by a 3rd bank.

they foreclosed on hundreds of homes here that were current but wouldn't appraise and the people couldn't produce enough cash to cover the loan/value deficit

Do you even realize how asinine this statement is?