It's future wealth and banks kindly allow you give it away in the form of a mortgage.
- Status
It's future wealth and banks kindly allow you give it away in the form of a mortgage.
They didn't have wealth,so they took out credit, this is credit that they will be spending the next 35 years giving back to the banks. So in essence they took their future wealth and gave it to the older generation.
P
partisan
Guest
Until recently, at negative real interest rates ;-)
I've been house hunting recently, and my experience is that lower offers will be entertained as long as they are not off the radar low. The estate agents know that sellers have to lower their expectations from the spring /summer.
Last edited by a moderator:
B
blindjustice
Guest
ah the soft landing i.e we managed to squeeze as much as we can out of em now the lets keep it that way!
You can sense it in the air now! even my goldfish know its coming
WERE ALL DOOMED!
THE END IS NIGH!!
THE FOUR HORSEMEN OF THE APOCALYPSE!!
WAILING BANSHEES
YOU GET THE PICTURE
oh and emigration to USA and OZ is not as easy as it used to be!
You can sense it in the air now! even my goldfish know its coming
WERE ALL DOOMED!
THE END IS NIGH!!
THE FOUR HORSEMEN OF THE APOCALYPSE!!
WAILING BANSHEES
YOU GET THE PICTURE
oh and emigration to USA and OZ is not as easy as it used to be!
S
Silvester
Guest
HowStrange and WhatHome
Thanks for replies!
Thanks for replies!
Came across this quote. It sounds like the new foundation for the Irish property business:
Seriously though, I think there'll be a backfire - public sentiment impacted adversely - if they try to hype things too much at this stage. People seem to be developing more advanced BS detection abilities these days
Seriously though, I think there'll be a backfire - public sentiment impacted adversely - if they try to hype things too much at this stage. People seem to be developing more advanced BS detection abilities these days
S
Silvester
Guest
Thanks Partisan! I hope this is possible particularly with invester-owned properties.
T
tententwenty
Guest
Believe me, you are not alone.
Last edited by a moderator:
liteweight
Registered User
- Messages
- 1,678
People have to live. Whether they take their 'future wealth' and spend it on a mortgage or whether they pay it to a landlord....it's not something they were ever going to be able to keep entirely in their pockets, unless they wanted to live in a box. With a mortgage, they will have an asset that they own after 35 years and the security of their own home in old age. Even if rents are a good deal cheaper than a mortgage, I'm not sure the saving will be enough to ensure security at a later date.
The older generation also spent their future wealth while young and are now reaping the rewards. Property was always expensive in relation to income.
Fascinating stuff here on the Property collapse in the USA. These are the words of Real Estate Agent Mike Morgan from the website: http://globaleconomicanalysis.blogspot.com/
Mike Morgan:
Mike Morgan:
"With so many “experts” out there singing the praises of the housing market, I think it is time for me to once again poke my head out. I had an email exchange this week with Jim Cramer, and it was hard to believe he is as bullish as he is. I hear from too many analysts and Wall Street gurus that don’t take the time to get out of their offices and get on the front line here in Florida, as well as Arizona, Texas, California, Virginia, etc. I also hear from the analysts and hedge fund managers that are visiting the corporate offices of the big builders. Unfortunately, they’re drinking the Cool Aid. It’s potent stuff that clouds rational thinking and it is probably just what is needed to wash down a few hundred stale donuts.
Do you remember my analogy of housing to donuts? A year ago I said this was like the room of 1,000 donuts. Even if they are warm Krispy Kremes, how many can you eat? Three? Maybe four? And even if you come back the next day, and the donuts are now half price, how many can you eat? Same thing with housing. We only have so many people in the US. But builders built houses like donuts. They sold houses to non-users. They sold houses to the greedy masses that bought multiple houses to flip. Now we have the inventory, but there are not enough people to occupy these homes. Moreover, with interest rates rising and mortgages becoming tougher to obtain, we have less and less people that can buy these homes, even if they want to.
Since my recent article in Barron's, I have received dozens of calls from builders, bankers, buyers and investment groups perched like vultures. Let me give you a sampling of a few calls.
Public Builder - Called me to find them bulk buyers with the ability to buy out all remaining units in developments they cannot sell. They are willing to sell at cost. I told them they were about 10% over the current distress market, and they didn’t even hesitate. They said, fine. Drop the price 10% and we’ll pay a 5% commission to you. Just help us get rid of this inventory.
Condo Developer - They have a 600 unit project that is 100% up for resale. This means no one is going to close when the building is completed in January. Every single buyer will walk from their 20% deposits. The developer will simply going to turn the keys over to the bank. And the bank will take a massive hit that will have the Feds on top of them in the blink of an eye.
Townhome Developer - Asked me to resell 132 units that they had sold a year ago for an average of $400,000 a unit. All of their buyers have notified them that they will not close. Unfortunately, even a year ago in the heated market these units were only worth about $250,000. Now, the units will not command more than $175,000 . . . if they’re lucky.
Real Estate Agent - She sold 10 of the 132 units I just mentioned to her friends, family, banker and co-workers. They’re all going to walk away from their $40,000 deposits, so they don’t lose $250,000. The developer will be stuck with 132 units that are not worth what it cost to build them.
Homeowner - This one really hurts, and this is the next wave of the massive tidal wave hitting this industry. As surfers know, the third set is the biggest. This homeowner purchased her home for $390,000 plus $15,000 in closing costs. It is now worth maybe $300,000. Their interest only ARM is scheduled for refinancing. The bank told them they need to come up with additional cash to cover the drop in equity. But they don’t have the $75,000 the bank wants. And even if they sell for $300,000 and clear $280,000, they can’t pay off their $390,000 mortgage balance. You see, their mortgage was 100% and it was interest only. They are going to walk away from the house and give it to the bank. The bank, if they are lucky, will sell the house for $300,000 less commissions and expenses. Maybe they will net out at $280,000. The math is simple. The bank, at best, will lose at least $110,000 on a $390,000 mortgage. That’s a 28% loss . . . IF they can sell at $300,000. Back to the donuts. Maybe they can sell a few of these homes at market prices, but as foreclosures mount, prices will drop further.
The Third Wave - This massive tidal wave will effect all aspects of our economy. Some banks will fail. Other banks will suffer the worst liquidity crisis since the Depression. And there is no way to stop this wave. This wave not only effects current mortgage holders who can no longer afford to live in their homes, but it devastates the new home market. Buyers with contracts are finding it tougher to qualify for mortgages. We can’t forget that rates are also up about 18% from a year ago, so buyers cannot afford the same home they could have a year ago.
I will wrap up with a statistic from a recent FDIC presentation.
“Bank exposure to mortgage and home equity is now at peak levels, having risen dramatically. If you look at 1998, the total exposure to mortgage and home equity loans was about 25 percent. In the last quarter, the third quarter, it had risen to 37 percent.”
And here’s the why this tidal wave is a killer. The 25 percent exposure was during a period of rising home prices and low inventory levels. The 37 percent follows the first two tidal waves of the highest inventory levels in the history of the United States and prices falling with equity disappearing daily.
I sold three homes last week for one public builder. Each of these homes sold for 40% less than the same homes sold a year ago. How about all of those neighbors when it comes time to refinance? The appraiser is going to look at current sales prices, and the bank is going to ask for additional funds to meet the equity requirements. Ouch. Where’s the Kool Aid?"
Do you remember my analogy of housing to donuts? A year ago I said this was like the room of 1,000 donuts. Even if they are warm Krispy Kremes, how many can you eat? Three? Maybe four? And even if you come back the next day, and the donuts are now half price, how many can you eat? Same thing with housing. We only have so many people in the US. But builders built houses like donuts. They sold houses to non-users. They sold houses to the greedy masses that bought multiple houses to flip. Now we have the inventory, but there are not enough people to occupy these homes. Moreover, with interest rates rising and mortgages becoming tougher to obtain, we have less and less people that can buy these homes, even if they want to.
Since my recent article in Barron's, I have received dozens of calls from builders, bankers, buyers and investment groups perched like vultures. Let me give you a sampling of a few calls.
Public Builder - Called me to find them bulk buyers with the ability to buy out all remaining units in developments they cannot sell. They are willing to sell at cost. I told them they were about 10% over the current distress market, and they didn’t even hesitate. They said, fine. Drop the price 10% and we’ll pay a 5% commission to you. Just help us get rid of this inventory.
Condo Developer - They have a 600 unit project that is 100% up for resale. This means no one is going to close when the building is completed in January. Every single buyer will walk from their 20% deposits. The developer will simply going to turn the keys over to the bank. And the bank will take a massive hit that will have the Feds on top of them in the blink of an eye.
Townhome Developer - Asked me to resell 132 units that they had sold a year ago for an average of $400,000 a unit. All of their buyers have notified them that they will not close. Unfortunately, even a year ago in the heated market these units were only worth about $250,000. Now, the units will not command more than $175,000 . . . if they’re lucky.
Real Estate Agent - She sold 10 of the 132 units I just mentioned to her friends, family, banker and co-workers. They’re all going to walk away from their $40,000 deposits, so they don’t lose $250,000. The developer will be stuck with 132 units that are not worth what it cost to build them.
Homeowner - This one really hurts, and this is the next wave of the massive tidal wave hitting this industry. As surfers know, the third set is the biggest. This homeowner purchased her home for $390,000 plus $15,000 in closing costs. It is now worth maybe $300,000. Their interest only ARM is scheduled for refinancing. The bank told them they need to come up with additional cash to cover the drop in equity. But they don’t have the $75,000 the bank wants. And even if they sell for $300,000 and clear $280,000, they can’t pay off their $390,000 mortgage balance. You see, their mortgage was 100% and it was interest only. They are going to walk away from the house and give it to the bank. The bank, if they are lucky, will sell the house for $300,000 less commissions and expenses. Maybe they will net out at $280,000. The math is simple. The bank, at best, will lose at least $110,000 on a $390,000 mortgage. That’s a 28% loss . . . IF they can sell at $300,000. Back to the donuts. Maybe they can sell a few of these homes at market prices, but as foreclosures mount, prices will drop further.
The Third Wave - This massive tidal wave will effect all aspects of our economy. Some banks will fail. Other banks will suffer the worst liquidity crisis since the Depression. And there is no way to stop this wave. This wave not only effects current mortgage holders who can no longer afford to live in their homes, but it devastates the new home market. Buyers with contracts are finding it tougher to qualify for mortgages. We can’t forget that rates are also up about 18% from a year ago, so buyers cannot afford the same home they could have a year ago.
I will wrap up with a statistic from a recent FDIC presentation.
“Bank exposure to mortgage and home equity is now at peak levels, having risen dramatically. If you look at 1998, the total exposure to mortgage and home equity loans was about 25 percent. In the last quarter, the third quarter, it had risen to 37 percent.”
And here’s the why this tidal wave is a killer. The 25 percent exposure was during a period of rising home prices and low inventory levels. The 37 percent follows the first two tidal waves of the highest inventory levels in the history of the United States and prices falling with equity disappearing daily.
I sold three homes last week for one public builder. Each of these homes sold for 40% less than the same homes sold a year ago. How about all of those neighbors when it comes time to refinance? The appraiser is going to look at current sales prices, and the bank is going to ask for additional funds to meet the equity requirements. Ouch. Where’s the Kool Aid?"
Some myhome.ie inventory statistics (I think we could agree that this is not affected by any increasing popularity of the site given that it has been established for years)
Early July - 3316 properties for sale in Dublin city and county
21st October - 5469 properties for sale - an increase of 65% over 3 months
Early July - 3316 properties for sale in Dublin city and county
21st October - 5469 properties for sale - an increase of 65% over 3 months
O
Open_Window
Guest
Just looked at daft total sales for ireland (not includign sites) and it seems to be just past the 25,000 mark.
Have I got this right???
Also hear a statistic on newstalk that there ar just over 650,000 residential mortgages in the country. I thoight that was interstign as it must be just under half the total housing stock that is mortgaged.
Is it correct to assume that maybe a large proportion of people, the older generations are very much debt free whilel a large proportion of the younger generation are up to their collective necks?
The reason I pose this is that you find the sentiment between the young and the old very differetn, and to be honest a lot of the older generation baulk at the idea that prices could go down were as the young are jsut thinking about holding on not sure which way things are going but feeling they'll never get a break and its there sentiment primarily driving the market, voting with their mortgage extended pockets.
Well thats what I find anecdotally.
Have I got this right???
Also hear a statistic on newstalk that there ar just over 650,000 residential mortgages in the country. I thoight that was interstign as it must be just under half the total housing stock that is mortgaged.
Is it correct to assume that maybe a large proportion of people, the older generations are very much debt free whilel a large proportion of the younger generation are up to their collective necks?
The reason I pose this is that you find the sentiment between the young and the old very differetn, and to be honest a lot of the older generation baulk at the idea that prices could go down were as the young are jsut thinking about holding on not sure which way things are going but feeling they'll never get a break and its there sentiment primarily driving the market, voting with their mortgage extended pockets.
Well thats what I find anecdotally.
N
Neffa
Guest
I don't think most of the bears on here are saying "never buy under any circumstances" - I'm certainly not. Yes, one of the benefits of buying is you own the place in old age - no question. I think most are saying "it's very expensive now and likely to soften/correct/crash [depending on how bearish you are] in the coming years." Renting (for now) has the advantage of helping you save cash each month, putting you in a better position as a buyer for the new market now emerging. A highly leveraged owner/occupier is - by comparison - stuck.
And yes, when you bought property 30+ years ago, it was always a stretch. Difference was that inflation helped make that burden ease pretty quickly for many. That's not the case now and given our membership of the euro, very unlikely to be the case in the foreseeable future.
I don't think this is right. You have to actually select search and this gives a figure closer to 22,000.
The figures at the top of the page seem to include multiple entries and so are not accurate. There is also much greater variation in these figures from day-day and even hour to hour as older entries and multiples are deleted by the administrators so I wouldn't take those figures as being realistic.
O
Open_Window
Guest
Hey PEOPLE, do take a surfing sec & go vote on the POLL question on ,
I see daft inventory is still steadily rising, rental numbers are practically holding, intersting, we won't know for a while yet but rentals may not take that dip if a lot of previously held but vacant properties are simply being offered to the market for the first time to realise capital gains.
The 15% vacancy rate or in real terms 275,000 empty properties are enough to crash the market 200 times over, since its has only taken a rise of 8000+ extra properties for sale on daft to indicate that a rise as small as maybe 10,000-20,000 extra in the market overall in one selling season is enough to turn sentiment right around.
Bring on 100,000 or 200,000 properties are you are talking about total annihilation of the market.
You can see why the politicians are running scared (apart from the ever foolhardy McDowell) or Joe Higgins who is asking the hard questions.
I see daft inventory is still steadily rising, rental numbers are practically holding, intersting, we won't know for a while yet but rentals may not take that dip if a lot of previously held but vacant properties are simply being offered to the market for the first time to realise capital gains.
The 15% vacancy rate or in real terms 275,000 empty properties are enough to crash the market 200 times over, since its has only taken a rise of 8000+ extra properties for sale on daft to indicate that a rise as small as maybe 10,000-20,000 extra in the market overall in one selling season is enough to turn sentiment right around.
Bring on 100,000 or 200,000 properties are you are talking about total annihilation of the market.
You can see why the politicians are running scared (apart from the ever foolhardy McDowell) or Joe Higgins who is asking the hard questions.
Is that unusual? The summer months are traditionally the quiet months for sales as people are on holiday etc. Regardelss of the state of the market, I'd have expected a significant increase in Sept/Oct. I'd be inclined to compare October last year with October this year.
Yes it is unusual. From my analysis, the inventory figures from July were even higher than April which is peak Spring selling season. When data about rising inventory was posted on this thread in the summer, those in denial were saying that inventory was high because it was summer. Bulls were arguing back then that you would expect more property to be on the market because nothing sells in summer!!!
In some areas, there has been a 300% increase in the number of properties for sale since April - peak spring selling season.
bearishbull
Registered User
- Messages
- 207
[broken link removed]
[broken link removed]
[broken link removed]
apologies for long url's
[broken link removed]
[broken link removed]
apologies for long url's
O
Open_Window
Guest
So I see Sbpost publish on line just after midnight. I haven't found thsi to be always the case, have you?
I should be in bed. So should you BB.
Is that not a crash? When is a crash a crash?
Well if it means 5 or more years of selling frustration for "vendors" after 5 mor more frustrating years for buyers then I'd call that even. Lets see.
Not a mention of McDowells commetns per se. Honest analysis here I believe. People should note form the article house on the market since April, at least 4 months before such comments were made by the leader of the PD in regards to abolishing stamp duty. Gratned these are house acrosss the spectrum but we need FTB to come in so people can trade up.
I'd personally be happy to have a place. I am wondering will I ever attain the standards my grandparents happily lived you know, a starter home that you live in all your life...
Is there not in fact a stronger argument to abolish stamp duty in times of a very depressed housing market as opposed to a busy one thats producing much revenue!
While I am no fan of this current Government, giving FTB onemore leg up for a few months would be like giving a addict of som sort unfettered access to their drug of choice, the high would get higher quicker but the end would be nigher sooner!
Tax breaks are used to stimulate a festering sector of society to met prhaps a particular need at a given time so by extension of current Government policy (bar contentious nature of the over extension of section 23) it is not typical to give tax breaks in such a climate or easy access to credit.
I should be in bed. So should you BB.
Is that not a crash? When is a crash a crash?
Well if it means 5 or more years of selling frustration for "vendors" after 5 mor more frustrating years for buyers then I'd call that even. Lets see.
Not a mention of McDowells commetns per se. Honest analysis here I believe. People should note form the article house on the market since April, at least 4 months before such comments were made by the leader of the PD in regards to abolishing stamp duty. Gratned these are house acrosss the spectrum but we need FTB to come in so people can trade up.
I'd personally be happy to have a place. I am wondering will I ever attain the standards my grandparents happily lived you know, a starter home that you live in all your life...
Is there not in fact a stronger argument to abolish stamp duty in times of a very depressed housing market as opposed to a busy one thats producing much revenue!
While I am no fan of this current Government, giving FTB onemore leg up for a few months would be like giving a addict of som sort unfettered access to their drug of choice, the high would get higher quicker but the end would be nigher sooner!
Tax breaks are used to stimulate a festering sector of society to met prhaps a particular need at a given time so by extension of current Government policy (bar contentious nature of the over extension of section 23) it is not typical to give tax breaks in such a climate or easy access to credit.
- Status