Real Estate Crash thread

[Benny Profane]

I'm sorry, "trash" was rude. I guess I mean normal houses normal people with average incomes can afford.

[cramer]

I'm sorry, "trash" was rude. I guess I mean normal houses normal people with average incomes can afford.

hehe, its ok, i guess id be considered white trash in the bay area. 110K a year (combined) isnt shit around here.

[supermodel159]

The market is heading back up where I am. I'm thankful I closed when I did...after a 90 day escrow (original terms were 25 days...stay away from BOA).

[Nobody Famous]

It sounds like they are raising the qualifying income levels on this? Current upper income limits are AGI $75k, or $125k married/joint file. Whereas that write up says "... will be phased out for annual incomes above $125,000 and for joint filers with incomes above $225,000".

I do agree with the NRA blood suckers comment. I thought Obama campaigned on kicking all lobbyists in the balls before tossing them out on the street. Congress should have made it a stipulation that some of the NRA's practices get opened up to allow more competition.

[ass-to-mouth]

Doomed!!!!

Now would be a good time to remind everyone of 4matics neighbor who sold his crappy home in one week for 30K over asking.

HE CRUSHED IT!!!!

[ass-to-mouth]

As Benny hints... this $10 Billion is being paid out to actual Americans not the Real Estate Agents... and thank god not Wall Street firms to pay it out as hudge bonuses to the already wealthy. I suppose you could argue that Real Estate Agents get a commission on the non-FSBO home sales... but remember they would have gotten commissions on all the sales they would have normally done even without this program, so the only way Real Estate agents actually are benefited is in EXTRA transactions encouraged and created by this program. And since those extra deals are the whole point of this program in the first place... isn't critique of Real Estate agents getting extra transactions essentially admitting this program is working how it was intended?!?!? (<<< See what I did there... ) [/perhaps biased opinion]

Keeping prices artificially high through massive taxpayer subsidies was the intended purpose of this program. And combined with the Feds manipulation of interest rates it has worked perfectly.

[ass-to-mouth]

I do agree with the NRA blood suckers comment. I thought Obama campaigned on kicking all lobbyists in the balls before tossing them out on the street. Congress should have made it a stipulation that some of the NRA's practices get opened up to allow more competition.

Only the lobbyists that didn't support his campaign. NAR was one of his biggest donors.

[4matic]

Now would be a good time to remind everyone of 4matics neighbor who sold his crappy home in one week for 30K over asking.

There's another worse dump with the yard plowed up and full of weeds a couple houses down. I'll let you know how that one does. Area code 94580.

Here it is. listed at $299k:

[ass-to-mouth]

CRUSH IT!!!!!

[Benny Profane]

There's another worse dump with the yard plowed up and full of weeds a couple houses down. I'll let you know how that one does. Area code 94580.

Here it is. listed at $299k:

wow. Do people own pit bulls on your block?

[4matic]

wow. Do people own pit bulls on your block?

Of course. And a guy with no utilities that has been there for 15 years (he cooks in the front yard). They did an abatement on his property five years ago and it took a crew of six three days to clean it up. He's still there...with his five cats and bearded live-in woman friend.

The pictured house is right across the street from the crazy guy. It's owned by an old blue color couple; notice the CB antennae.

[Benny Profane]

It's owned by an old blue color couple; notice the CB antennae.

Blue color?? Maybe it's an antennae to make contact with the home planet.

[4matic]

Blue color?? Maybe it's an antennae to make contact with the home planet.

that would not be out of the question in my hood.

[iceman]

It's owned by an old blue color couple

Um, what does this mean?

[4matic]

Um, what does this mean?

They're old...

[iceman]

....and blue?

Maybe turn up the dial on the oxygen tank.

[liv2ski]

I'll bet you 50 bucks that thing is below 300 in a few years. In affect, it may be now, although I don't have enough data. Craigs isn't the best place to establish price.
Two words about the present market - "cascade down". The bottom has been established with the trash, but all the high end stuff, especially second homes, still have a long way to go. The market is frozen.
That's a neat little place, though. If the garage is attached, that's what I'm looking for.

So Benny, what do you think of this place? Should I hold out for it to get under $400k?

If I sold a rental and bought this: http://www.spotlighthometours.com/to...t=1&mls=767698 I wonder what it would rent for? What do you guys think?

[Benny Profane]

So Benny, what do you think of this place? Should I hold out for it to get under $400k?

If I sold a rental and bought this: http://www.spotlighthometours.com/to...t=1&mls=767698 I wonder what it would rent for? What do you guys think?

I don't know, that's pretty friggin' nice. And would cost a whole lot more if situated nest to crappier mountains with much lower quality snow. Utah is a unique market. They're making a lot of white babies in that place, so, the future looks bright for the economy, especially since they all wind up at least bi-lingual and usually know about the outside world doing it missionary style. I still wouldn't live around those people unless you paid me, and gave me immunity. Let's not even talk about the ugliness that is SLC with a brown cloud over it.

[Benny Profane]

http://www.doctorhousingbubble.com/t...ousing-trends/

[liv2ski]

http://www.doctorhousingbubble.com/t...ousing-trends/

Wow, I spent the last 2 hours reading that link and other related links on that website. Makes me think realistically the CA market should be set to get crushed over the next 2 years, but I also really think the guberment will allow banks to do anything to support values, so all those impending foreclosures from the Option ARM loans done in CA will likely stay of the banks books and off the MLS for years. I don't think the banks can turn the properties into rentals, as that will depress rents and kill values that are based off of gross rent multiples. Man, interesting times are still in front of us.

[cramer]

Wow, I spent the last 2 hours reading that link and other related links on that website. Makes me think realistically the CA market should be set to get crushed over the next 2 years, but I also really think the guberment will allow banks to do anything to support values, so all those impending foreclosures from the Option ARM loans done in CA will likely stay of the banks books and off the MLS for years. I don't think the banks can turn the properties into rentals, as that will depress rents and kill values that are based off of gross rent multiples. Man, interesting times are still in front of us.

Its going to be a feeding frenzy out in my area once these all hit. Most of these people i know on these loans have homes built in the 90's. You are going to be able to get a 3-4br, 2000 sq ft for 125K id imagine. At those prices, i might have to pick up a rental property. You can rent your home out for what your payments are. Although i could do that now.

liv2ski, you have multiple homes right? So anything i rent above what my payment is im assuming is taxable income? What are the taxes on that. Just normal income taxes?

[Platinum Pete]

So anything i rent above what my payment is im assuming is taxable income? What are the taxes on that. Just normal income taxes?

I'm in Oregon, not California, so your rules may be different. For the Feds and Oregon I am supposed to claim rent as income, can't claim the interest tax deduction, and need to come up with a shit ton of maintenance and depreciation in order to offset the additional income - that's according to my accountant at least. That's all if you report the income. If you just rent out your house and give your tenants a slight discount for paying cash you can probably hide the money pretty easily and still take that interest tax deduction, but you leave yourself exposed to some risks.

[liv2ski]

liv2ski, you have multiple homes right? So anything i rent above what my payment is im assuming is taxable income? What are the taxes on that. Just normal income taxes?

Cramer, On rentals you can also depreciate the property, which creates a paper loss to offset some of your rental income gains. Just remember once you sell the rental property, the depreciation write off over all those years is recaptured when you calculate the capital gains due on the sale.
But yes, the income is added to your earned income and taxed at your combined incomes tax bracket.

Frankly, I would like to sell my CA rentals and do an exchange of equity into states that don't have the downside risk to the market I see in CA, but my wife is against it, as she is positive we live in the Golden State

I'm in Oregon, not California, so your rules may be different. For the Feds and Oregon I am supposed to claim rent as income, can't claim the interest tax deduction, and need to come up with a shit ton of maintenance and depreciation in order to offset the additional income - that's according to my accountant at least. That's all if you report the income. If you just rent out your house and give your tenants a slight discount for paying cash you can probably hide the money pretty easily and still take that interest tax deduction, but you leave yourself exposed to some risks.

Pete, of course you show the interest paid to the bank on the loan as an expense on the schedule E just like you do utilities, maintenance, etc.

[cramer]

Cramer, On rentals you can also depreciate the property, which creates a paper loss to offset some of your rental income gains. Just remember once you sell the rental property, the depreciation write off over all those years is recaptured when you calculate the capital gains due on the sale.
But yes, the income is added to your earned income and taxed at your combined incomes tax bracket.

Frankly, I would like to sell my CA rentals and do an exchange of equity into states that don't have the downside risk to the market I see in CA, but my wife is against it, as she is positive we live in the Golden State



Pete, of course you show the interest paid to the bank on the loan as an expense on the schedule E just like you do utilities, maintenance, etc.

Well, i was more thinking backup plan if i lost my job or something. I can rent my house i have now for what my mortgage is. I'm on a fixed rate, so that payments not going anywhere. I'd really hate to go back to paying rent, but A better backup plan i guess would be to just rent my house out and go get an apartment, hehe. I'm not really looking for the headache of being a landlord. I was just a little curious. What state would you buy a rental in right now? I'm assuming nowhere on the west coast, lol?

[liv2ski]

Well, i was more thinking backup plan if i lost my job or something. I can rent my house i have now for what my mortgage is. I'm on a fixed rate, so that payments not going anywhere. I'd really hate to go back to paying rent, but A better backup plan i guess would be to just rent my house out and go get an apartment, hehe. I'm not really looking for the headache of being a landlord. I was just a little curious. What state would you buy a rental in right now? I'm assuming nowhere on the west coast, lol?

Not true. I like Bend Or, which has taken a huge value hit, and is very desirable to lots of people. I would need to look into the local economies (jobs), what is happening to inventories, historical appreciation rates, etc, but I am sure there are many good deals in Oregon and Washington states that will work out as better investments from today to say 10 years from now than rentals in CA, NV, FL. However, these guys agree with my wife: http://realestate.msn.com/slideshow....entid=22129728