Subj : Re: New to this
To   : POINDEXTER FORTRAN
From : Dumas Walker
Date : Sun Apr 20 2025 09:43 am

>  DW> Yes.  The last time that happened, we eventually had a housing crisis
>  DW> that set off a recession.  In that event, the housing prices rose well
>  DW> above what the houses were worth.  There was an eventual correct (at
>  DW> least in my area) and house prices fell back closer to their actual
>  DW> worth.

>  It wasn't just the housing price bubble, though, it was subprime loans
>  written as adjustable rate mortgages increasing that caused the default
>  rate to increase, yes?

There was that, too.  Something that people like to gloss over is that
those loans were being written in the 1990s, at least here.  They started
defaulting en masse in ~10 years when the rates increased.

But the fact that the house they signed that deal on was priced well above
what it was worth didn't help as it meant they were paying more and made the
houses more difficult to shift later.

Supposedly, around here, when someone accepted a "zero down loan," if they
actually had money to put down, that was added to the advertised sale
price of the house, i.e. I buy a $75k home and put $5k down, the advertised
sale prices was $80k.  Someone sees that and thinks they might could get
$85k for their similar home.  Eventually, the prices get too high and
houses stop selling.

I can believe that was happening.  I bought a $75k home in 1997 and, by the
Summer of 1999, people were trying to sell houses on the same street that
were the size of mine or smaller for over $110k.  When a couple of owners
tried $125k, that is when houses quit selling in that neighborhood.

I knew the houses there didn't appreciate by 2/3rds in less than 2 years. I
didn't have a zero-down loan, but others in that area did.  When I sold in
2009, the houses were back to selling for about what they were worth, just
under $100k.

>  DW> The neighborhood I am in now has a slighly different problem.  There
>  DW> are a lot of pensioners who live here and own their homes.  If they
>  DW> have kids, chances are they have at least one that is a deadbeat who
>  DW> hangs around waiting for them to kick off in hopes that they will wind
>  DW> up with the house.  It is still mostly nice, but for how long I don't
>  DW> know.

>  We have a couple of those - this is a bedroom/senior community, and
>  there are some 30-something "kids" still living at home, partying in
>  their parents basement and so on.

I luckily have not seen that as much lately.  The last two kids I saw doing
it, one OD'ed and the parents of the other one sold the house before they
both kicked.  They had trouble getting him to move out.

Another kid I thought was doing that eventually moved on (or got arrested,
not sure).  I lately have not noticed any other adult kids sitting on their
parents' porches playing with a cell phone anytime I walk or drive by.

>  DW> For whatever reason, the builders around here started mostly focusing
>  DW> on housing developments where the houses start off in the mid-6 digit
>  DW> range, which is not affordable, and probably barely have a yard.  They
>  DW> don't seem to be building new "starter homes."  Apartments and condos,
>  DW> OTOH, they build those, too.

>  Any time an old house torn down around here, you know a McMansion twice
>  the size right up against the fenceline is going up.

Not sure I would call these "McMansions" but they are right on top of each
other, and they are just big enough not to be affordable to most first-time
home buyers.


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