Comments on: “Buy Wholesale and Directly From the Bank” http://blog.redfin.com/sfbay/2008/01/buy_wholesale_and_directly_from_the_bank.html Redfin Bay Area Sweet Digs Tue, 07 Feb 2012 16:59:16 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Red http://blog.redfin.com/sfbay/2008/01/buy_wholesale_and_directly_from_the_bank.html/comment-page-1#comment-2436 Red Wed, 16 Jan 2008 20:25:29 +0000 http://blog.redfin.com/sfbay/2008/01/buy_wholesale_and_directly_from_the_bank.html#comment-2436 "artificially lowering prices for their own gain"!! No way! The bank is in major pain on these, and drops the price till it sells, trying to save what they can. If the bank doesn't sell, the place sits empty, squatters move in and destroy home values for the whole neighberhood, the pipes and wires get ripped out for recycle value, and eventually these homes can end up bulldozed as worthless. Prices here are still too high, and now we are entering a recession - just think what that will do to home values. I have no pity for the banks, but they are proving to be the greater fool that buys from the guy who got 100% financing thinking he could sell the place for more... now they will lose 10 times what they ever gained. “artificially lowering prices for their own gain”!! No way! The bank is in major pain on these, and drops the price till it sells, trying to save what they can. If the bank doesn’t sell, the place sits empty, squatters move in and destroy home values for the whole neighberhood, the pipes and wires get ripped out for recycle value, and eventually these homes can end up bulldozed as worthless.
Prices here are still too high, and now we are entering a recession – just think what that will do to home values.
I have no pity for the banks, but they are proving to be the greater fool that buys from the guy who got 100% financing thinking he could sell the place for more… now they will lose 10 times what they ever gained.

]]> By: David http://blog.redfin.com/sfbay/2008/01/buy_wholesale_and_directly_from_the_bank.html/comment-page-1#comment-2430 David Wed, 16 Jan 2008 18:03:51 +0000 http://blog.redfin.com/sfbay/2008/01/buy_wholesale_and_directly_from_the_bank.html#comment-2430 Prices will drop until it makes sense to buy. People are realizing that they can't pay 50% of their gross income in housing without being severely squeezed (50% to housing, 28% to taxes leaves you with less than 1/4 of your paycheck to buy that $50 tank of gas and that $200 grocery bill, never mind trying to save money). Prices should be about 20-25X annual rents for houses around here (historical norm), and about 5.5-6X income (historical norm for this area, it's 2.5-3X elsewhere). When that starts happening, prices will stop dropping. It doesn't make sense to buy a $529K starter home when just two blocks away I'm renting a bigger house for $1750/month (yes, this is a real life example). That price should be ~$420-$475K, just as an example (more to the lower end since it's smaller). So another 20% price would seem to be in the cards. Just hold tight and we'll get there. Prices will drop until it makes sense to buy. People are realizing that they can’t pay 50% of their gross income in housing without being severely squeezed (50% to housing, 28% to taxes leaves you with less than 1/4 of your paycheck to buy that $50 tank of gas and that $200 grocery bill, never mind trying to save money).

Prices should be about 20-25X annual rents for houses around here (historical norm), and about 5.5-6X income (historical norm for this area, it’s 2.5-3X elsewhere). When that starts happening, prices will stop dropping. It doesn’t make sense to buy a $529K starter home when just two blocks away I’m renting a bigger house for $1750/month (yes, this is a real life example). That price should be ~$420-$475K, just as an example (more to the lower end since it’s smaller).

So another 20% price would seem to be in the cards. Just hold tight and we’ll get there.

]]> By: Becca http://blog.redfin.com/sfbay/2008/01/buy_wholesale_and_directly_from_the_bank.html/comment-page-1#comment-2427 Becca Wed, 16 Jan 2008 16:32:39 +0000 http://blog.redfin.com/sfbay/2008/01/buy_wholesale_and_directly_from_the_bank.html#comment-2427 The prices need to correct, and any intervention is going to make the process even more painful. We should not prolong the madness of artificially inflated housing prices (due to "creative" financing, speculation and low loan rates). People who bought into the idea that "housing always goes up" (at 20% per year, forever!!!) and bought a house that they could not afford _should_ lose that home. They never really owned it in the first place, and they should consider themseleves lucky to have lived in a home beyond their means for as long as it lasted. Walk away from the homes and your credit will eventually recover. Stay in an overpriced place that you cannot possibly ever afford and your debt will continue to increase. Foreclosure in these circumstances is simply unavoidable for many "homeowners." Why prolong the misery? The prices need to correct, and any intervention is going to make the process even more painful. We should not prolong the madness of artificially inflated housing prices (due to “creative” financing, speculation and low loan rates). People who bought into the idea that “housing always goes up” (at 20% per year, forever!!!) and bought a house that they could not afford _should_ lose that home. They never really owned it in the first place, and they should consider themseleves lucky to have lived in a home beyond their means for as long as it lasted. Walk away from the homes and your credit will eventually recover. Stay in an overpriced place that you cannot possibly ever afford and your debt will continue to increase. Foreclosure in these circumstances is simply unavoidable for many “homeowners.” Why prolong the misery?

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