Comments on: Weekly News Round-Up http://blog.redfin.com/sfbay/2008/06/weekly_news_round-up-29.html Redfin Bay Area Sweet Digs Tue, 07 Feb 2012 16:59:16 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Mark in SF http://blog.redfin.com/sfbay/2008/06/weekly_news_round-up-29.html/comment-page-1#comment-8793 Mark in SF Thu, 15 Jan 2009 06:49:30 +0000 http://blog.redfin.com/sfbay/2008/06/weekly_news_round-up-29.html#comment-8793 "If they are inclined to walk they have done so- in ADVANCE of the reset. " That makes no sense, even if you assume a perfectly rational actor: Why not stay in a home with the low, low minimum payments of an option ARM? Then you can stay in to home at least another 6 months for free until the bank kicks you out. Also, there is always the possibility of a bailout, or a rebound in the housing market. There is also good old fashioned denial. “If they are inclined to walk they have done so- in ADVANCE of the reset. ”

That makes no sense, even if you assume a perfectly rational actor: Why not stay in a home with the low, low minimum payments of an option ARM? Then you can stay in to home at least another 6 months for free until the bank kicks you out. Also, there is always the possibility of a bailout, or a rebound in the housing market. There is also good old fashioned denial.

]]> By: Michelle http://blog.redfin.com/sfbay/2008/06/weekly_news_round-up-29.html/comment-page-1#comment-4923 Michelle Fri, 13 Jun 2008 15:43:00 +0000 http://blog.redfin.com/sfbay/2008/06/weekly_news_round-up-29.html#comment-4923 That mortgage implode-o-meter guy doesn't know that Northern Ca designation "norcal" doesn't usually include the central valley San Joachin county which is Tracy and Stockton. Yes Stockton probably IS the center of the subprime crisis along with runner ups riverside CA and somewhere in Florida. But that is not all that meaningful when discussing SF bay area real estate. That mortgage implode-o-meter guy doesn’t know that Northern Ca designation “norcal” doesn’t usually include the central valley San Joachin county which is Tracy and Stockton. Yes Stockton probably IS the center of the subprime crisis along with runner ups riverside CA and somewhere in Florida. But that is not all that meaningful when discussing SF bay area real estate.

]]> By: Michelle http://blog.redfin.com/sfbay/2008/06/weekly_news_round-up-29.html/comment-page-1#comment-4922 Michelle Fri, 13 Jun 2008 15:25:52 +0000 http://blog.redfin.com/sfbay/2008/06/weekly_news_round-up-29.html#comment-4922 I've heard a lot from various parties about the next wave of mortgage resets that you mention which are going to occur in 2009. Apparently there is some school of thought that these people are staying in their homes diligently and paying on time and when their mortgage resets they will decide to walk on the property triggering a new wave of foreclosures. I really can't see that. Those people know their mortgages are going to reset in 6 mos, and that their property value has declined significantly. If they are inclined to walk they have done so- in ADVANCE of the reset. Sure there might be a few residual clueless people who wake up in 2009 to 3x their prior payment and are shocked,shocked at their options but for the most part, these people know whats coming and have likely walked away from their homes already if they were going to do so. The media noise on the real estate crisis is at its peak right now- this is likely the bottom in foreclosures/walkaways. It doesn't mean that housing prices will rise soon or anything. I’ve heard a lot from various parties about the next wave of mortgage resets that you mention which are going to occur in 2009. Apparently there is some school of thought that these people are staying in their homes diligently and paying on time and when their mortgage resets they will decide to walk on the property triggering a new wave of foreclosures. I really can’t see that. Those people know their mortgages are going to reset in 6 mos, and that their property value has declined significantly. If they are inclined to walk they have done so- in ADVANCE of the reset. Sure there might be a few residual clueless people who wake up in 2009 to 3x their prior payment and are shocked,shocked at their options but for the most part, these people know whats coming and have likely walked away from their homes already if they were going to do so.
The media noise on the real estate crisis is at its peak right now- this is likely the bottom in foreclosures/walkaways. It doesn’t mean that housing prices will rise soon or anything.

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