Wow. That sure is one helluva housing recovery. It’s the best time to buy. Don’t miss out on guaranteed home price appreciation. The NAR has been spouting that drivel since 2000. And after an 80% decline versus gold, they assure you they are right this time. What do you think?
For what amounts to a touch of good news in what is otherwise a challenging economic environment, home prices have worked their way generally higher over the past year. For some perspective on the single-family home market, today’s chart presents the median single-family home price divided by the price of one ounce of gold. This results in the home / gold ratio or the cost of the median single-family home in ounces of gold. For example, it currently takes a relatively low 105 ounces of gold to buy the median single-family home. This is dramatically less than the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down over 80% from its 2001 peak. However, the recent uptick has home prices once again testing resistance of a steep seven-year downtrend channel.
ThePessimisticChemist says:
Been trying to buy a house. Mortgage company has been putting up road blocks left and right.
I’m convinced that its because they know they won’t be able to foreclose on me because the house is obviously within our grasp financially. Please tell me I’m just being paranoid and that they torment everyone equally.
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27th December 2012 at 9:50 am
Wyoming Mike says:
TPC, I went through a small, neighborhood bank. Process went smoothly, they then sold it to BOA, grrr, but the little bank got the processing cash & walked while BOA took the small interest payment & the risk.
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27th December 2012 at 10:13 am
Maddie's Mom says:
We closed the sale of our previous home on 12/21/12.
We sold it ourselves without “benefit” of a realtor. Our costs were for 2 “For Sale” signs and 2 newspaper ads.
The thousands we saved by not paying a commission will be gifted to our daughter for a nice down payment on a new car.
Screw the NAR.
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27th December 2012 at 10:19 am
ThePessimisticChemist says:
@WM – I tried going through our local bank, but they wouldn’t give me a conventional loan because my credit score is in the upper 600s.
Apparently buying everything in cash or paying it off in its zero interest time period is grounds for a shit credit score.
We are going through a mortgage agency that was very highly recommended by friends and family, however if they put up one more road block my wife and I are going to tell them to go fuck themselves, find an apartment, and then save up enough to buy a house with cash.
Frankly the entire home buying process makes me sick. I’ve never seen so many middle men in my entire life. And each one has everyone buffalo’d into believing that their service is necessary. What the fuck America? How do people put up with this shit?
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27th December 2012 at 10:21 am
Mark says:
They’re not blocking you; something about your background, age, credit history, something has got them thinking you won’t be able to pay at some future date. Profession, something has got them punchy! My mortgage broker friend tells me you’re in an at risk profession if the system collapses. First of all, if you’re having to get a mortgage, a loan, for something you can’t pay for in cash, you’re a risk, face it! Downturn in economy that’s happening full speed now, Obamacare, fiscal cliff, higher taxes, soaring UNemployment, business failures/closings at record highs; bankruptcies, you name it! I wouldn’t loan you a cent based on the above; banks are sitting ON TRILLIONS along with other HUGE corporations pending the outcome of the global economic situation. If I were you, and I’m not, for I wouldn’t go into debt based on the above and financially speaking, you’re a big ol’ fool to even be thinkin’ of goin’ into debt! You could look at your situation as a wakeup call and decline their mortgage which means ’til YOUR death. You’d be smart to buy a mobile home in cash/small home. Sit tight and buy PM’s.
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27th December 2012 at 10:30 am
ThePessimisticChemist says:
@Mark –
Me and my wife’s net income is more than double what the requested loan is.
She works in healthcare. I work in the animal feed industry. Both are companies that are hiring. Both are companies that have been a part of this community since the 50s.
I’m about as risk free as you are going to find these days.
“First of all, if you’re having to get a mortgage, a loan, for something you can’t pay for in cash, you’re a risk, face it!”
The irony of course being that a cash driven society would totally destroy all of the useless parasite middle men who don’t actually have a skill set other than being really fucking annoying.
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27th December 2012 at 10:43 am
ThePessimisticChemist says:
PS: We are putting almost 30% down.
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27th December 2012 at 10:44 am
sangell says:
It would be nice if housing has bottomed and is making even small gains. It does generate a lot of jobs. Unfortunately many of those jobs are unnecessary. It would hard to imagine a more fossilized industry than real estate.
Zillow can market your home as effectively as any listing broker. Why we have to have all these sales agents given that is beyond me. Had the banks not made such a shambles of everything they could have been one stop shops for the selling and purchasing of residential real estate. You go to your bank and say you want to buy a home. They qualify you for a loan. You go shop for a house on line the same way people do for a car now. You and seller negotiate a price and the bank sends its appraiser and inspector out to verify the house is worth that. They then draw up and process the paper work and that’s that. No 5 or 6% commission because the bank can do it for a third of that. No FHA or FNMA involved.
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27th December 2012 at 10:46 am
IndenturedServant says:
@TPC, If I recall correctly, you are trying to get out of your in-laws place. I can understand that but there is no fucking way I’d buy a house right now. My first thought would be to buy a nice 5th wheel travel trailer or motorhome (nice ones are cheap now) and live in that until after the next crash or until I saved enough cash to buy a house.
Home prices will continue to drop in general and interest rates are in no danger of going up.
During the frenzied housing boom, all kinds of hangers on and other associated low life figured out a way to get their hands involved in the sale of homes. And yes, low debt balances, paying your bills on time and not paying interest on loans (paying them off during grace periods) will kill your credit score. I discovered this 20 years ago. Your score s based on being the best debt slave you can be. The sad thing is that now, your life insurance and car insurance rates, plus who knows what else, is based on your credit score. About 10 years ago, Geico, my car insurer at the time started hounding me to provide my SS number to them. I kept refusing. One day I had to call them for something and they brought it up again so I asked why. They said that if I had good credit, my rates could be significantly lower. The only debt I had was my mortgage but my payment history was perfect and my credit score was nearly perfect as well. I finally consented and my car insurance premiums were cut in half. Economically, nothing makes sense anymore. It hasn’t made sense for a very long time.
I_S
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27th December 2012 at 12:06 pm
ThePessimisticChemist says:
@IS
“Your score s based on being the best debt slave you can be.”
I figured that out when I tried getting a cellphone at age 18 and they wanted a massive downpayment. Not just paying for several months in advance, which I would understand, or paying for the phone up front (which I was doing). No, they tacked on an arbitrary $500 fee for taking such a “substantial risk.”
“you are trying to get out of your in-laws place.”
Its not a matter of trying. If this deal falls through I will be moving out within the month one way or another. I will say this though: It will be a cold day in hell before I live in a trailer again.
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27th December 2012 at 12:44 pm
sangell says:
I remember back in 2007 on Kudlow’s show one of his regular guests at the time was arguing housing was overvalued and that no one should own a house. He was right of course but Kudlow asked him if he had sold his. He sheepishly said he would but his wife wouldn’t let him! Its not all dollars. Living in a trailer is fine. I did for three years after I sold my house in 2006 but I was a single guy then and wanted to save money. I damn sure wasn’t going to go out boom valuations for another house because that was what enticed me to sell mine to the greater fool!
Now housing is at or close to a bottom depending on where you are. Inventories are slowly being absorbed and they aren’t building many new single family homes. We may never see the kind of price appreciation we had a decade ago but there is a limit to how low prices for a decent house can go. A mansion in Pacific Heights in 1933 may have cost less than it did in 1928 but no one was giving them away. People are flipping houses again in SW Florida. Life goes on.
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27th December 2012 at 1:30 pm
DaveL says:
I just heard an ad from Quicken Loans. “Is your house underwater? Do you owe more that your house is worth? Maybe we can help. Let’s say you owe $300,000 on your home and it is now worth $100,000. We can help you modify your loan. HOW THE FUCK WILL THAT WORK OUT?
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27th December 2012 at 3:14 pm
ThePessimisticChemist says:
“I did for three years after I sold my house in 2006 but I was a single guy then and wanted to save money.”
I did my time as a poor bastard growing up. Its why I worked hard and saved for so long.
I’m not going to force my wife to live in a trailer when our combined income is in the top 10% of US households. I’m more likely to emmigrate to Spain or Greece than I am to move back into another shit hole.
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27th December 2012 at 3:16 pm
Spaceman says:
TPC – “Please tell me I’m just being paranoid and that they torment everyone equally.”
Our 1st home buying experience back in the late 70’s was a nightmare. We lived in a remote area and were doing business with a bank a 1 ½ hour away. Paperwork was filled out, due dates were set and then ignored by the bank. Something else always came up that needed a form filled out and sent to somebody somewhere. We were the ones always calling the bank asking WTF. Before it was over with, the bank branch president and I had a brief discussion over the phone about how his bank (employees) problems were his problems, not mine, and if he ever talked to my wife the way he had earlier I was going to break both his arms. As it turned out, one of the neighbors down the road had been on the Board of Directors of the bank I was doing business with. Our neighbor offered to intervene and we accepted. I don’t remember the details but what I do remember is the neighbor telling us that he had made some inquires. He said that if we got the loan at the interest rate we were quoted it would be up to us to decide if we wanted to move forward or not. The rate was pretty favorable at the time if I remember right. Within a couple of weeks the bank called to say the loan had been approved. We decided to accept the loan. We brought a lawyer to the closing and he did all the talking. Our Cashier Check was more than the amount we owed. The bank had removed 1 or 2 of the fees without any explanation. It was in our favor so we didn’t care. I’ll never forget when the admin brought the check back into the room and handed it to our lawyer. The president of the branch told him to tell us (now I remind you we’re all setting around a table looking at each other) that we would have to take the check across the street to the other bank in town to cash it; “he did not want our business”.
My advice, if you really want the house and you’re getting a fair deal all the way around, be patient. If you think you’re getting jerked around call the lender up and tell them so. It doesn’t look like they’ve changed much in 40 years.
If you and your wife agree that you can save the money to pay cash for a home, there is no better feeling then not making that monthly payment and you can save yourself a lot of money in the long run. We purchased our last home with cash and it was a walk in the park.
The bank we received the loan from sold the loan to another company a few years later. The branch president left the bank shortly afterwards and ended up being the caretaker for the old folks housing complex in town. A job he may have been better suited for. The bank itself finally was purchased by another larger bank and is no longer in business.
Good Luck
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27th December 2012 at 3:42 pm
Novista says:
TPC
I don’t think they torment the second wave of speculators and investors because these people are pig ignorant.
” … they won’t be able to foreclose on me …” It is to laugh. Imagine buying a short sale for cash and being foreclosed a month later! True story, one of many. When Ambac sued JPM/Bear, they had examined one tranche of 5,000 mortgages — and 88% of them had clouded title. Robosigning is still alive and thriving, as are the rest of the slimy tricks being played on many people.
Even if you get a mortgage, you are still at risk of fraudulent paperwork. The average lawyer would not even know what to look for.
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27th December 2012 at 6:30 pm
ThePessimisticChemist says:
@Spaceman – Your story warms my heart. It appears the industry has been run by douchebags for quite some time now.
@Novista – Its one of my biggest fears that they commit fraud and we end up houseless and penniless.
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27th December 2012 at 9:24 am
sangell says:
TPC
There could be cloudy title issues I’m sure but if you are at all worried about this just buy an existing home that has not been sold since MERS and all the securitization issues arose. There are plenty of homes out there that have no mortgage or one that pre-dates all this robo-signing, MERS crap.
I bought my place from a guy who bought it new, paid the mortgage off and owned it free and clear. No title issues on these kind of properties.
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27th December 2012 at 9:53 am