Comments on: Bi-Annual Sales Report

By: Wilda

Wilda — Thu, 11 Mar 2010 12:37:20 +0000

http://www.arcadiahousingblogc.om, how do yoou do it?

By: Kuma

Kuma — Tue, 29 Jul 2008 15:03:22 +0000

I had done the similar calcutation and did a little experiment with my bank. I said that I would like to buy a property valued 1.35 M with excellent credit (800+) and income of $200K with paper. The bank asked for proof of 55% of the value of the property in my asset to allow me to put 47% down with 53% mortgage. The 53% comes from the max of jumbo loan ($729,000).

I don’t know who can buy a property over 1 M ($911,250, 20% down + $729,000 max Jumbo loan) now? Unless your current house has high equality value and you can sell it before you buy the new one. You also need to have very high income, like the top 5% of the current Arcadins do to afford the mortgage.

By: Zodiac

Zodiac — Tue, 29 Jul 2008 04:12:39 +0000

Does refinancing with the new bailout housing bill turn your non-recourse loan (assuming one didn’t refinance or HELOC) into a recourse loan in California? I wonder who wants to refinance if they are underwater since any future profit will go to FHA.

By: T K Eng

T K Eng — Mon, 28 Jul 2008 22:26:46 +0000

Looks like the housing bailout is final. Prudent taxpayers who did not participate in the housing fever will now have to foot the bill to save the day. I can’t help but to feel cheated by Congress and the President. Now this bill will become law, I hope the final version will atleast prevent bailout of speculators/flippers and people who used/abused their homes as ATMs.

By: puckhead

puckhead — Mon, 28 Jul 2008 20:57:45 +0000

MattCURE,

You are assuming that first time buyers will be buying houses north of $500K. Most of the people who buy in Arcadia or expenseive cities like South Pas will be buyers moving up from a current house and will be rolling equity from their current home. Most families have dual incomes today. Unless you have very high income, it’s unlikely a single earner will be able to afford a SFH in Arcadia. It’s just the reality of today.

By: MattCURE

MattCURE — Mon, 28 Jul 2008 18:57:21 +0000

I believe the house prices will collapse much quickly than 6-8 years. Already now most banks require the old standard 20% down, paycheck stubs, bank statements, and credit card statements. Also most banks will only issue 30 year fixed mortgage.

$400,000 loan, and 20% down, $80K, equals $480,000 house.

$400,000 at 6.5% interest 30 year fixed, is about $2300 a month. Add $480 a month of property tax dues. Total liability is $2780.

In order to qualify for $2300 a month mortgage it needs to be between 28% to 36% of your gross monthly income. Most banks are very conservative at 28%. So, at 28%, equals, yearly salary of $98,500.

How many persons make about $100K a year?? Where I work 80% of the employees make about $65K to $75K.

The run-up of house prices were mostly due to very low teaser interest only rates, with no income documentations, and 100% of LTV. It was nothing but greed and reckless lending.

By: missedthebubble

missedthebubble — Mon, 28 Jul 2008 18:24:59 +0000

well.. reading through some of the fine print on the new housing bill…

Debt to Income Ratio of 31 percent… You need 2 years of w-2 to prove this out….

Take another 20 to 30% off home prices…

By: Sean

Sean — Mon, 28 Jul 2008 16:17:14 +0000

But you bring up a great point! As of right now the USD has lost a lot of value compared to the Euro. And I do think we need to worry about the value of the USDollar.

Here is the yahoo chart, it does not look good to me. What do you think of this chart?

finance.yahoo.com/q/bc?s=USDEUR=X&t=5y&l=on&z=m&q=l&c=

By: Sean

Sean — Mon, 28 Jul 2008 16:15:49 +0000

I did not say the dollar is ‘very weak’ weak or ‘getting weaker by the month’. I double checked and didn’t see that in my post.

I did say that the government wants to protect the value of the dollar.

By: Jeff

Jeff — Mon, 28 Jul 2008 07:44:22 +0000

Sean, i agree with most of what you say but right not the dollar is very weak and getting weaker by the month. in the old days fear meant higher dollar and gold, not anymore.

As for investors in these junk bonds many were foreign, like in Japan, Australia and of course China. Individual participation in these bonds is nonexistant as they are usually sold in lots of $10M. So far about $400B has been written off, lood for another $600B before we call it a day.

I think a 6-8yr drop is in the cards, or about 25-40% in SoCa. Tight lending and higher rates are going to hold back any appreciation for years.