Comments on: Home Foreclosure Rates Spiking

Stockton, Calif., Worst Off In 3rd Quarter Look At 100 Metropolitan Areas

[GRPDiver]

I have property in Prince William County, Virginia, and am watching my property value decline. In addition to all the issues discussed in this article, the county council is cracking down on illegal immigrant in a xenophobic approach that is driving both legal and illegal immigrants out of the county. There is a large Hispanic community in the county. It is now harder for both legal and illegal immigrants to get jobs due to racial profiling by employers afraid of making a mistake and mistakenly hiring someone illegal. The people can not make the mortgage payments resulting in foreclosures. With a large number of houses on the market, new housing starts are down. As a result, construction workers are being laid off. My tenant is a native-born, Anglo-Saxon that was a construction superintendent who lost his job. He was out of work for two months and fell behind on his rent. The point is that there unintended consequences for many government actions that negatively affect groups not targets by the action.

As far as sub-prime mortgages--need I say more? If it is too good to be true, it usually is too good to be true. The same is true with ARMs. Some people want the government to bail these people out. The job of the government is not to bail people out of every poor decision they make. They agreed to the terms of the loan; then they have to live with the consequences.

If the lender defrauded people, that is a different story and needs to be dealt with in criminal and civil court.

[jetranger7]

Heres one for Ya''ll, Big Shot Builder want to build houses (27-yrs.old), so he does, wants to "profit" between 125,000 and 150,000 on the house after expenses. Sells house, eventually, House falls down, after a heavy rain in the midwest. Why, because he built it on Fill soil that wasn''t compacted properly, near a large creek. But, you couldn''t of told that to this young BIG SHOT-Hot Shot Builder, why he knows it all, and besides the name on the side of the truck Claims, QUALITY Custom built homes,, Ya, right, he''s never swung a hammer in his life, fresh out of college and hired a bunch of Illegals to do the work for him. But, he''s a big time home builder-right ! While he sits in his 45,000 dollar airconditioned SUV, on his cell phone talking to his wife/girl friend or what ever ! Theres way too much of this going on too, its almost too easy to get into this business and claim your all this and all that when in actuality, some of these so called builders couldn''t build a Dog House by themselves !

[AgentGGG]

The real problem is not increasing housing prices, it is the stagnation of wages to a majority of the population. It takes about $100k in 2007 to raise a family decently in the USA. Unless the media and the public get used to this notion, we are doomed. How often do you hear about $60-75k being a ''good'' salary -- it might be statistically, but in real purchasing power terms, it is closer to poverty for most families. You will not be able to live in a decent area and afford an average lifestyle. Even a college education will not get you higher wages than 20 years ago, but much higher debt. This is a boon for employers and is an important reason why profits for corporations are healthy and stock prices keep rising. Where is the balance?

It seems to me that viewing human labor as a commodity is the most short-sided and self-destructive management policy one could think of. It does not provide any incentive to invest in human capital and boost skill levels in the workforce. The ''labor as a commodity'' thinking is a trap that keeps us all down.

Choose your favorite candidate -- change anytime --
www.netvote2008.com

[jetranger7]

Hey San Francisco, Read your post, if its that Badd out there, I''d move and get a job somewhere else, like Utah, Idaho, Nevada, Missouri Nebraska maybe. All anybody out there is going to be doing, is making someone else a lotta money, for just a home big deal. These real Estate agents, some of them anyway, aren''t helping matters either by encourging these home owners to place a high value on their shacks than what their truly worth, why they have their Mini Mc Mansions too, and 60,000 SUV to pay for and only want to work 5 months out of the year and be on Vacation the rest ! I''d get out of that Bay area, to someplace you can actually afford to live and save for your retirement so your not working till the day you drop dead on the job !!

[nexgen99]

Soon I''ll be able to get that condo on the beach in Florida for pennies on the dollar.

[canyoutellme-2009]

In the SF bay area, the avg home price is 750K (roughly). This is for a 1400 sq foot cheezy home. Someone tell me how this is logical. Let''s say someone has 200K to put down on that home saved up in some bank account somewhere... i''m being VERY generous by saying 200K btw... anywho, that means the mortgage is on 550K. a 30 year traditional 6% mortgage is about 3500/mo if you get VERY favorable terms. PLUS property tax. On 750K, it''s about 1500/mo. So you''re talking about $5,000 per month in home cost? If you make 100K/year pretax, you still cannot afford that and be able to pay for the rest of life''s necessities. The home prices out here are OUT of control. My advice.... RENT for a few years until pricing comes back to earth. We need a 40-50% haircut on home prices now.

[dogsoul]

"However, I do feel sympathy for the families just trying to get into a home before the house prices shot to the sun. "
Amen to that... those who have really lost out ARE those young and/or new home owners... We''ve seen many comments talking about how they''re simply stupid for buying the latest & best while you folks settled for hand-me-downs etc... Perhaps a few, but in most instances - these young/new homeowners have to pay a massively higher price as a % of income for the same home YOU bought back when YOU were young/new to the home buying market. Most of the people I see getting these huge houses & all the latest awesome frills are NOT young/new buyers; rather, they''re mostly people who DID buy way back when & are now sitting on goldmines because their homes appreciated so much in value - that they''ve re-invested in the same real estate market that got them so much equity in the first place - driving prices thru the roof... Basically, there''s 2 groups of people here - those who face very high home prices, yet also benefitted from their OWN home''s value doubling tripling... and those who face very high home prices who did NOT own a home, or own one for long...
Both myself & my wife are professionals who make decent salaries - we''ve only got 1 new baby and could only afford to buy a small vintage condo in Chicago that''s got some shady elements in the neighborhood

[jetranger7]

WAGES: AGREE with you on that, I''m seeing the MIDDLE-CLASS and just under the middle class working people being offered wages that are compareable to that of 1985 and 1992 wages!! Meanwhile, these companies are Giving their CEOs and Top Management huge Salaries and Bonuses and Perks,its Ridlicious, while not taking care of its actual workers who do the work. Rather you have a college degree or not, the wages being offered and the benefits are about what they''d offered you 20-25 Years ago ! I''m actually working for Wages that were considered decent back in the early 90s, hello this is 2007, MILK is 4.00 a Gallon, cost of living has tripled since then, EMPLOYERS WAKE UP !! Then theres the ANTI-AMERICAN Companies who shut down and went to China or Mexico, just to please their Shareholders. ENOUGH is ENOUGH time to Quit catering to these companies and helping them, all were doing is doing our ownselves in by doing it !!

[drivelphobe]

ozilot...

You are correct in what you say. There is considerable value in homeownership for the reasons stated plus many more. I agree with you about the unscrupulous methods and people involved in the creation of the bubble. It is a tough time for first-time buyers.

[jetranger7]

One thing that should be Stopped, if everybody would get on the bandwagon about it,is to Quit letting these Mortage-Finance companies and Banks, having your Loan in some other state, than what you reside in ! Its Ridlicious and absurd, that you may live in Ohio, , Illionis,Colorado, but your Loan/Mortage is with some bank up in God only knows where, its clearly sets the stage for FRAUD-CORRUPTION ! Back when my parents were growing up in the 1950s-1960s,and had bought their house, most of the banks that carried their loans were right in the local community they lived in, now they want to sell your loan/mortage, who knows where or how many times it''ll be sold, it could end up in CHINA or Russia before the end of your term, this needs to STOP! It sets the stage for Fraud & Corruption, which is also some of what were seeing now. I say we band together to put a stop to it, Demand it !

[drivelphobe]

lochian....

It''s not so much that the dollar is worth less. It''s more an issue of home prices compared to earned incomes. While the value of a dollar may only be half of what is was in 2001, the wages and earnings have not kept pace. It''s not in any kind of balance and I agree with ozilot that the scam artists are mostly responsible for the synthetic jump in prices.

[forthepeopl1]

TO ALL AMERICA YES, CONGRESS HAS AGAIN SLAP AMERICANS RIGHT IN THE FACE WITH THIS, PLEASE DONT BELEIVE ME THAN GO AND READ THE LAW BUSH SIGN INTO LAW.

ITS CALL THE MILITARY COMMISSIONS ACT 2006, AND HIDDEN IN FINE PRINT CONGRESS HAS GIVEN THEMSELFS AND ANYONE WORKING IN THE GOVERNEMNT IMMUNEITY ON ANY THING THAT HAS HAPPEN IN THE WAKE OF THE WAR,OR ANYTHING ELSE THEY CAN FIND.

THIS IS THE BEST PART, THEY BACK DATED IT TO ( 1997) why?????

why would they need to back date this all the way before 2001????

because they have been ease dropping on america way back then...think about it america, and you better think about this, cheney/bush/rumsfeld/rove/rice started this war on all lies on top of lies, and remember 18 out of 19 involved in 2001 was saudi araibans you know the king and bush hold hands walking in the woods??? and this is why bush said he doesn''t care about finding bin laddan because bin is part of the royal family that bush loves..

so if you look at the hole law, hillary help get it into law, why why why sounds funning because her husband bill was president at that time in 1997..so what are they all hideing in washington???????????????

david a belanger,veteran,us army, 978-618-3105,[e-mail]

[badfish911]

ITS ALL BECASUE OF THE ILLEGAL ALIENS

[lochlan-2009]

"Home Foreclosure Rates Spiking" - And again, the buck is passed to the poor and middle class.

[vcdb]

no real jobs no real estate

[ralan40]

here''s a wild concept....its called:

************************
LIVING WITHIN YOUR MEANS
************************

Perhaps people should give it a try, sometime...

[curiousread]

i will never be able to afford a house... this country is out of control...

Jon Boy
my blog: www.curiousread.com

[shanev137]

This is not news. Everyone already knew this was going to happen.

[bookwerm314]

Want to know a metric for evaluation of how far down the drop might be? You can scale this up or down for whatever your house price was before the "run up".

Assume a house is 300K 5 years ago. Normal appreciation rates are below 4%, so lets say its "normal" price today would be 300K x (1+.04)^5th power, which is 300K x 1.217=365K.

Now lets do the math again with that same 300K house from 5 years ago, with 20% appreciation for 3 years, flat for two, how much would it have to drop to get back to the "fair value" price?

300K x (1 .2)^3 power = 300k*1.728=518K. So, to get to "fair value", 365K, that is a change of (518-365)=153K.

And 153K divided by 518K=29.5% DROP.

Now, in many areas the housing went up EVEN MORE! So until there is a 30% or more drop in prices, we have NOT seen bottom.

[lochlan-2009]

"How ridiculous is it for a starter home to cost upwards of $400,000" - I guess that depends on if your looking at that $400,000 in todays dollars or in 2001 dollars, since our dollar is now worth half of what it was then.