Home sales weaken as Chinese investors sour on US real estate!!!

[zubs]

So the 40%~50% drop people were wrong...what new economic distortion (new normal) has this created?
I think the new normal is interest rates will never go above 4.5% again, because if it does USA ceases to exist.

 

[irvineshadow]

Prices in Irvine didn't go down as much as other places in So Cal, but those other places did get hammered.  2006-2009 was bleak.

 

[irvinehomeowner]

A 5 or 6 might be possible as long as there are other products that are sub-4 (like ARMs).

But no one thought fixed could drop to 3s either.

 

[zubs]

Do you think libor will ever get above 2?

It is trending up...but look at that drop from 2009 to now. 
flat like yo momma.

 

[lnc]

So the 40%~50% drop people were wrong...what new economic distortion (new normal) has this created?
I think the new normal is interest rates will never go above 4.5% again, because if it does USA ceases to exist.

I'm having the same thought about the interest rates too.  Looks like US is heading towards something similar to the Japan's "lost decades" type of economy where interest rate stays low for years. 

 

[zubs]

And that's why 5/1 arm guys are the smart guys in the room....even though i got a fixed rate...i r dumb..
I left money on the table...approximately $300/month after taxes according to Qwerdog

 

[eyephone]

The analyst are predicting a rate hike.

 

[eyephone]

And that's why 5/1 arm guys are the smart guys in the room....even though i got a fixed rate...i r dumb..
I left money on the table...approximately $300/month after taxes according to Qwerdog

I don't have time to think about the libor rate.

 

[zubs]

Yes I can see that the libor is around 1.2 now..when it was 0.8 for the longest time.  As a self-proclaimed "analyst" myself, I predict interest is going to go up!

However, what will the governments of the world do to drive that monster back into the sea?

 

[Perspective]

And that's why 5/1 arm guys are the smart guys in the room....even though i got a fixed rate...i r dumb..
I left money on the table...approximately $300/month after taxes according to Qwerdog

You're evaluating a long term position far too early.

 

[qwerty]

If mortgage rates go up the whole US housing market implodes. Too many people with sub 4% mortgages. People will not sell because they won't be able to afford the new rate without some drastic price reduction. Then the govt will intervene again and rates would come back down.

5/1 Arm for life!

 

[irvinehomeowner]

We need some guy to start an Irvine housing blog that talks about the details of how 5/1 ARMs are going to implode and cause a foreclosure tsunami in 5 years when they reset and homeowners can't afford the new payments.

Only problem is according to the other thread, the 5/1s are a very low percentage of borrowers.

#dejavu

 

[acf]

lol

We need some guy to start an Irvine housing blog that talks about the details of how 5/1 ARMs are going to implode and cause a foreclosure tsunami in 5 years when they reset and homeowners can't afford the new payments.

Only problem is according to the other thread, the 5/1s are a very low percentage of borrowers.

#dejavu

 

[Perspective]

We need some guy to start an Irvine housing blog that talks about the details of how 5/1 ARMs are going to implode and cause a foreclosure tsunami in 5 years when they reset and homeowners can't afford the new payments.

Only problem is according to the other thread, the 5/1s are a very low percentage of borrowers.

#dejavu

~5% of borrowers in 2016 are choosing ARMs:
http://www.elliemae.com/resources/origination-insight-reports

 

[Perspective]

If mortgage rates go up the whole US housing market implodes. Too many people with sub 4% mortgages. People will not sell because they won't be able to afford the new rate without some drastic price reduction. Then the govt will intervene again and rates would come back down.

5/1 Arm for life!

I generally agree, but a high rate high inflation decade isn't outside of the realm of possibility. i.e. Inflation could soar (the Fed is certainly trying!) taking incomes and therefore house prices up; while rates could increase dramatically concurrently.

So, the appraisal won't be a concern in year seven of your ARM, because your house' value has increased so much, and your rising income affords you the ability to manage the annually increasing mortgage payment, but your next door neighbor will be sitting pretty in their 30-year fixed at 3.5% mortgage.

 

[panda]

Inflation will soar, but i don't see that happening for a very long time. How do i know this? The commodity cycle peaks in a 30 year cycle, It peaked in 1920, 1950, 1980 and recently in 2011 and the next peak will take place around 2035 - 2040 when most of us here are old in our 60s. So yes, I do see another acceleration of inflation taking place, but it will be gradual and will start to accelerate between 2025 - 2050. These Gold bugs are correct that an ounce of gold will reach $5,000 ounce eventually, but not any time soon. Most of us here will be old grandparents in our 60s when this happens. Hopefully IHO finally gets to live in his 3 car wide garage dream in Irvine by then.

If mortgage rates go up the whole US housing market implodes. Too many people with sub 4% mortgages. People will not sell because they won't be able to afford the new rate without some drastic price reduction. Then the govt will intervene again and rates would come back down.

5/1 Arm for life!

I generally agree, but a high rate high inflation decade isn't outside of the realm of possibility. i.e. Inflation could soar (the Fed is certainly trying!) taking incomes and therefore house prices up; while rates could increase dramatically concurrently.

So, the appraisal won't be a concern in year seven of your ARM, because your house' value has increased so much, and your rising income affords you the ability to manage the annually increasing mortgage payment, but your next door neighbor will be sitting pretty in their 30-year fixed at 3.5% mortgage.

 

[eyephone]

Did you consider the price of oil might go up?

Inflation will soar, but i don't see that happening for a while. How do i know this? The commodity cycle peaks in a 30 year cycle, It peaked in 1920, 1950, 1980 and recently in 2011 and the next peak will take place around 2035 - 2040 when most of us here are old in our 60s. So yes, I do see another acceleration of inflation taking place, but it will be gradual and will start to accelerate between 2025 - 2050. These Gold bugs are correct that an ounce of gold will reach $5,000 ounce eventually, but not any time soon. Most of us here will be old grandparents in our 60s when this happens. Hopefully IHO finally gets to live in his 3 car wide garage dream in Irvine by then.

If mortgage rates go up the whole US housing market implodes. Too many people with sub 4% mortgages. People will not sell because they won't be able to afford the new rate without some drastic price reduction. Then the govt will intervene again and rates would come back down.

5/1 Arm for life!

I generally agree, but a high rate high inflation decade isn't outside of the realm of possibility. i.e. Inflation could soar (the Fed is certainly trying!) taking incomes and therefore house prices up; while rates could increase dramatically concurrently.

So, the appraisal won't be a concern in year seven of your ARM, because your house' value has increased so much, and your rising income affords you the ability to manage the annually increasing mortgage payment, but your next door neighbor will be sitting pretty in their 30-year fixed at 3.5% mortgage.

 

[panda]

Well that depends. Where do you see the U.S. dollar index going between now until 2018?

Did you consider the price of oil might go up?

Inflation will soar, but i don't see that happening for a while. How do i know this? The commodity cycle peaks in a 30 year cycle, It peaked in 1920, 1950, 1980 and recently in 2011 and the next peak will take place around 2035 - 2040 when most of us here are old in our 60s. So yes, I do see another acceleration of inflation taking place, but it will be gradual and will start to accelerate between 2025 - 2050. These Gold bugs are correct that an ounce of gold will reach $5,000 ounce eventually, but not any time soon. Most of us here will be old grandparents in our 60s when this happens. Hopefully IHO finally gets to live in his 3 car wide garage dream in Irvine by then.

If mortgage rates go up the whole US housing market implodes. Too many people with sub 4% mortgages. People will not sell because they won't be able to afford the new rate without some drastic price reduction. Then the govt will intervene again and rates would come back down.

5/1 Arm for life!

I generally agree, but a high rate high inflation decade isn't outside of the realm of possibility. i.e. Inflation could soar (the Fed is certainly trying!) taking incomes and therefore house prices up; while rates could increase dramatically concurrently.

So, the appraisal won't be a concern in year seven of your ARM, because your house' value has increased so much, and your rising income affords you the ability to manage the annually increasing mortgage payment, but your next door neighbor will be sitting pretty in their 30-year fixed at 3.5% mortgage.

 

[usctrojancpa]

We need some guy to start an Irvine housing blog that talks about the details of how 5/1 ARMs are going to implode and cause a foreclosure tsunami in 5 years when they reset and homeowners can't afford the new payments.

Only problem is according to the other thread, the 5/1s are a very low percentage of borrowers.

#dejavu

~5% of borrowers in 2016 are choosing ARMs:
http://www.elliemae.com/resources/origination-insight-reports

That's probably about right, maybe 10-15% of my buyers opt for ARM loans.

For my West Irvine home which I only owned for 4.5 years I used the following loans...

7/1 ARM to purchase in Dec 2011 at 3% at no cost
5/5 ARM to refi in Nov 2012 at 2.75% at no cost
5/1 ARM to refi in Feb 2015 at 2.50% at no cost

In the 5.5 years that I owned the home my mortgage balance went down from $417k to $380k.  The buyer of my home got a 7/1 ARM at 2.625% rate with an 80% LTV at no cost.

 

[renter1]

Does anyone think a tax like the 15 percent tax implemented in Vancouver on foreign buyers could occur here in Irvine??