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cnbc: JPMorgan Chase is forecasting another 4 to 5 percent drop in home values over the next 12 months

Thiebear

By Thiebear
in The Tailgate

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Thiebear

Thiebear

Posted
Posted

http://www.cnbc.com/id/43354054

JPMorgan Chase is forecasting another 4 to 5 percent drop in home values over the next 12 months.

Housing Wire has the details:

In its June 2011 Home Price Monitor Report, the bank lowered its base home price forecast to a level that's 37 percent under peak price levels.

The financial-services firm blames its lowered price expectations on a supply-and-demand imbalance, as well as anemic consumer demand and disappointing economic reports.

I'm ready to just walk away from this 100k upside down house.

This is insane.

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Hubbs

Hubbs

Posted
Posted
I'm ready to just walk away from this 100k upside down house.

This is insane.

I read the other day (don't remember the source, but I believe it was a respected economic blog, Calculated Risk or Naked Economics or something) that the number of Americans considering a strategic default has doubled over the past year. People are getting sick of being underwater.

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Stew

Stew

Posted
Posted
http://www.cnbc.com/id/43354054

I'm ready to just walk away from this 100k upside down house.

This is insane.

[/indent]

I feel for you. My wife purchased her house on top of the bubble. We rent it out right now so we wont have to get out from under it. I recently found out we can write off the difference we pay from rent, towards the mortgage (our renter doesn't covr the full mortgage on that house). Good luck man.

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Predicto

Predicto

Posted
Posted
http://www.cnbc.com/id/43354054

I'm ready to just walk away from this 100k upside down house.

This is insane.

[/indent]

Why? Do you not like living there anymore? Are you unable to make the payments? Has it become less comfortable for your family? If it was not underwater, would it have an extra bedroom and a better kitchen?

As I see it, your house is first and foremost a place to live, not an investment. If it was worth X dollars for you to live in when you bought it, it should still be worth X dollars to you regardless of what the housing market is doing. :whoknows:

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twa

twa

Posted
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I agree with Predicto (alert the press),but I have no intention of ever selling and would rent or lease it if I move.

I've fought for yrs to get the value on mine dropped

add

it is quite a bit different for those that can't recoup enough by renting,or are unable to move because of losing too much

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PCS

PCS

Posted
Posted
I read the other day (don't remember the source, but I believe it was a respected economic blog, Calculated Risk or Naked Economics or something) that the number of Americans considering a strategic default has doubled over the past year. People are getting sick of being underwater.

I read something similar. I also read somewhere that in Vegas,24% of the foreclosures are "strategic" ones. That was along with the estimation that as many as 85% of the homeowners could be "underwater".

I agree with Predicto

:thud:

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twa

twa

Posted
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I prefer to look at the bright side

Affordable Housing Means Your House Is Worth Less

Consumer advocates have their priorities backwards.

http://reason.com/archives/2011/06/09/affordable-housing-lower-price

When the homeownership mob—to borrow a John Carneyism—won the day in 1992, the results were 1) government supported housing finance that put taxpayers on the line; 2) lower underwriting standards for housing finance supported by Fannie and Freddie; and 3) a bubble created by an artificial boost in housing prices. Ultimately, millions of low-income families were stuck with high and unsustainable debt, leading to the millions of foreclsoures we are wrestling with today.

The same thing will happen again if the consumer groups win again. Crippling overnment-subsidized debt is not a civil right.

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SkinsHokieFan

SkinsHokieFan

Posted
Posted
Hasn't dropped much out here in SF either. But the rest of Cali got smacked around badly.

Actually this place is starting to bubble already

Bought my house in December. A house with similar specs, smaller sq footage, about 1 mile away, sold for 30k more then I bought my place just 2 weeks ago. None of the comp listings in my area is at or lower then the price I paid.

:wtf:

I now have at least 30k in "equity"

:ols:

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Larry

Larry

Posted
Posted
I read something similar. I also read somewhere that in Vegas,24% of the foreclosures are "strategic" ones. That was along with the estimation that as many as 85% of the homeowners could be "underwater".

Yeah, I can see the potential problem, here.

Heck, I own some stocks that have gone down a bunch since January. And I have to admit that if I had some way that I could stick somebody else with the loss, I could see that it might be tempting.

Especially if it appeared very likely that it might be 10 years before my stock is in the green again.

Granted, if that kind of thinking happens to too many people, then we could be looking at one hell of a crash, affecting a whole bunch of things. But can you really blame people for doing what's in their personal self interests

----------

Still, it's good to see that some things hold true. There's still people in Tailgate who think that the most important thing about this problem is trying to blame a political party. (And the wrong one, at that.)

----------

But, what can you do about it? The folks who are underwater aren't going to get back above water for a decade or more. (And might go further under, first.)

What do you do?

Change the bankruptcy laws? If a bankrupcy of default stayed on your credit for 20 years, instead of 7, maybe it wouldn't be so attractive for people to intentionally default on their contract, just so they can stick somebody else with their investment losses.

But I could see that having some serious collateral damage. Not to mention that it might be ex post facto, and that attempting to do it might trigger people to stampede, right now, before the law changes.

Only way I can see this problem going away is if the bubble inflates, again. And quickly. And I don't think anybody really wants that "solution", either.

---------- Post added June-10th-2011 at 09:26 PM ----------

I now have at least 30k in "equity"

:ols:

Do what everybody else was doing, for the last decade. Refi, with a bigger mortgage. Take the 30k you've now got, and do something with it. Heck, put it in the stock market.

[/sarcasm]

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chipwhich

chipwhich

Posted
Posted

Heck, I own some stocks that have gone down a bunch since January. And I have to admit that if I had some way that I could stick somebody else with the loss, I could see that it might be tempting.

Especially if it appeared very likely that it might be 10 years before my stock is in the green again.

Granted, if that kind of thinking happens to too many people, then we could be looking at one hell of a crash, affecting a whole bunch of things. But can you really blame people for doing what's in their personal self interests

Really poor comparison.

You own the stock, unless you bought them on margin.

These people don't own their houses.

You can walk away and just write off the loss. The homeowner walks away, yet still has a liability. Don't trivialize it.

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Redskins Diehard

Redskins Diehard

Posted
Posted

This thread is full of people blaming a political party...the wrong political party. Some things always hold true(like people pointing out stuff that isn't happening)

---------- Post added June-10th-2011 at 09:44 PM ----------

How does that tax write off (difference between rental income/mortgage) work?

Of course your income/tax burden must be high to take advantage I suppose.

The way it works for me(in a "pass through LLC") is that mortgage counts as expense and rental income counts as income. Factor in depreciation(and other expenses like insurance, home owners fee, etc) and it ends up being a net loss every year. My income tax burden isn't all that "high"

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chipwhich

chipwhich

Posted
Posted
How does that tax write off (difference between rental income/mortgage) work?

Of course your income/tax burden must be high to take advantage I suppose.

Declare the rental income, deduct the mortgage interest in full. You can't write of the loss between mortgage payment and rental income until you sell the property.

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twa

twa

Posted
Posted
Declare the rental income, deduct the mortgage interest in full. You can't write of the loss between mortgage payment and rental income until you sell the property.

But you can add depreciation,but that can come back on you if you sell right?

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chipwhich

chipwhich

Posted
Posted
But you can add depreciation,but that can come back on you if you sell right?

Yeah when you sell it's complicated, take sale of house, less depreciation, losses from rental income, etc. It's more complicated because when calculating depreciation, they separate the land value and the improved value of the property due to the house. So you are really only depreciating the house. Not the entire purchase price.

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