What Does the Housing Blogger Network (HBN) Stand For?
Our mission is of economic and financial prudence.
We are not anti-housing or apocalyptic soothsayers of the future, but realist that believe housing will adjust and revert to a historical mean.
We believe that housing needs to reflect the incomes of those living in the immediate area.
We believe that easy access to credit and negligence of those offering loans inflated the housing sector.
We are against exotic and ridiculous financing offered to minimum wage works so they can purchase $400,000 mega mansions or 800 square foot boxes in California.
We vow to continue blogging in 2007 and 2008 to offer guidance to newcomers that are just having their eyes open to the housing bubble.
We understand that housing is an emotional and economic issue and that buying a home is not always based on what is economically right, but also the psychology of the current market.
We take an oath against giving in to the propaganda machine that all debt is good and that all debt equals freedom.
What Do I need to Do to Join?
Simply put the below button on your website. You do not need to link it to anywhere. This is your button. If you would like to add additional statements to the mission please do so, this is YOUR mission; this is a living document that we will continually update.
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16 Comments:
I must applaud your oath/mission statement. It encapsulates my over all view of the housing sector in a way that any rational person who is examining the housing market can understand. The reason most people say housing has been insane for the past few years is because in the back of their heads where they might not realize it they believe your statement to be true. Unfortunately most cannot articulate so they call what is taking place to be ludicrous, crazy or insane because the market has lost all rationality. The market is starting to return to rationality.
Anon:
I appreciate the support. You aren't the only one that echoes these cries regarding the current state of affiars in housing. Just take a look at the links to other housing bloggers; you are in good company.
The sentiment is changing though. Spending today via tomorrow's earnings has been the way of life for many years. Yet I feel we are in for a shift. If anything, those least likely to support a major housing payment will hopefully no longer be able to hang themselves; the subprime implosion should limit their ability.
If we look at prices though, the stubborn mindset of many sellers is that they still expect prices to rebound. They feel this is a seasonal change and prices will be back up this summer. Hate to say it but by the end of 2007 all of Southern California will be negative year-over-year.
The stubbornness of sellers is absolutely true. The problem with stubbornness is you can’t really measure it, it does not need to be rational and by its nature it takes time for it to go away. If you can learn anything from “Real Homes of Genius” is stubbornness and irrationality are alive and well with these sellers. You see people get foreclosed on rather than give up a $100,000 profit, people with just weeks left before forclosure can probably unload the monster if they cut their bottom line to just $20,000 profit and they refuse to do it. I have spoken with a person of this mindset, she just got divorced with house they owed $400,000 on and they want $500,000 for it. Early on they got an offer of $485,000 and passed. The house was on the market for market for 9 months plus and it was soon becoming necessary for both of them needing to move back into the house just to make ends. Only with that looming did they finally released some stubbornness and took $460,000. What was most disconcerting is she honestly felt entitled to a $100,000 profit, more so because after the diverse she would only keep half that. They made no improvements to the house the ONLY thing they ever did was live in the house for close to 10 years. When the foreclosures come rolling in this year we should see these prices finally moving downward, at least the foreclosed houses will move downward if nothing else because the bank is not nearly as stubborn. One good sign is home auctions are on the rise as a means of unloading homes quickly.
The perma-bulls of housing sound identical to the perma-bulls of dot com stocks.
"The market has nowhere to go but up"
"The rules have changed"
"new economy"
"Things are different this time"
No bubble lasts forever, and the housing bubble is no exception.
On a side note, here is a link worth looking into
http://www.usatoday.com/money/economy/housing/2007-03-07-mortgage-apps_N.htm?csp=24
Lowest rates of year push up mortgage demand
NEW YORK (Reuters) — Mortgage applications jumped last week as borrowers emerged in droves to
refinance
their existing home loans as interest rates fell to their lowest since early December, an industry trade group said Wednesday.
More are getting mortgages to refinance old mortgages, not to buy.
Expect the Real estate spin meisters to try to make this look like good news for housing.
Noah,
This is the musical chairs that we’ve been playing for six years. Get an attractive rate for two-years. Two years comes up, refinance into another loan product, rinse and repeat. Like you mention and the article describes is that these folks are jumping to refinance and get out of the reset machine that is on the way. The bulk isn’t from new home buying but people trying to reach for the lifesaver in the blue abyss known as mortgage debt and resets. It is also known as the debtor’s spiral; just look at the notorious credit card hoppers. They jump from one credit card to another shifting the debt around; like taking $20 out of your right pocket and putting it into your left and feeling richer for it.
But with the implosion of the subprime market and considering this data is probably one to two months old, the subprime market is only a few weeks old, what will happen when these people come back in a few months and find out the free money is now shut off? Not only that, what will people do when their monthly payment goes from $1,500 to $2,500 or $3,000 per month? Glad to see the mainstream media reporting on this but they are a lagging indicator on this pent up beast ready to break from the cages of debt. No stopping this now because the train has left the housing station and no exotic loan product is going to stand in its way.
Dr. Housing Bubble- Can you please email me the code for the button?
sonomahousingbubble@yahoo.com
Thank you,
Athena
Housing prices are out of whack with fundamentals - it's going to be some year and the next few too - button added
Athena and Rich:
Thanks for joining the network. We've already got a handful of housing bloggers that have joined and linked up.
Quarter 1 is coming to an end and we've already seen the implosion of the subprime market. What we have in store for Q2, Q3, and Q4 will be just as interesting.
Cheers,
Dr. Housing Bubble
Yes indeed anyway you look at it, house prices are irrationally overpriced vs any metric.
Just stupid, but the mron loser buyers with no money down toxic loans had no sense of value when they speculated on a purchase. Now it will be fun watching them go down in smoke as the resets send tyhem out in the streets where they belong so rationals folks can buy a house at a sane price.
From Tony.
Dr. HB. I propose a simple solution (another category of loans) to sustain housing and stop this spiral of foreclosures. This saves the buyer and the lender and the real estate industry and by extension teh economy.
-Make open-ended loans...or someting like "till-dead-do-us-part" loans. It works something like this. Take a $400K loan for say $500 a month flat....and on your death the house reverts to the lender. Assume you got the house at age 30 and lived till 80, you would have paid $300K so far...yet the house still belongs to the lender...and both make out just fine. No stress. no wahala!!!. You should be able to manage $500 a month in payments even with a few months job loss
...think of it..
Tony,
I like your idea but I think we already have something in place like that. Its called taxes.
Even in death we still carry this. Maybe we use the loan you propose as a gift tax. The gift of debt.
QUESTION: If I own a house valued at $350k and owe $200k, can I borrow a second mortgage of $150k to buy two SUV's, a boat, 3 plasma TV's and a European Vacation? Then, when I can't pay the new higher loan payments, blame my lender and have all of you guys bail me out, like Hillary is trying to do for my neighbor?
This is one of the most honest and candid sites I have seen yet regarding the housing situation. I'm not familiar with the authors but I salute you and your integrity.
The wellspring of info / reality checks offered is remarkable. I have hesitated to buy a house and prefer to "watch & wait" while renting - presently my relatives are pushing me to either invest in foreclsure properties or buy into the current market.
I think you will find that we share very similiar views. Take a look some slides on the mortgage market I attended. I am a mortgage banker in CA.
http://thegreatloanblog.blogspot.com/
The truth must be told...
Unfortunately the people in SoCal are way too greedy!!! For example, a house in Downers Grove, IL, you can find a house about mid-300 to mid-500 thousand dollars for double the lot size compare to mid-600 to mid-700 thousand in Downey, CA...what are these people in SoCal thinking??? Oh, I know...too much sun and ultraviolet radiation have cooked their brain cells to a skull full of $hit. I have never respect 90% of the people in SoCal. But that's my take anyways. However, I respect people on this site due to the fact that people say it like how it is. People need to realize on average, a married couple's combined income is about $600,000 at best and the house prices is 10 times of their annual income. WTF??? Are they gonna eat $0.10 ramen noodles everyday??? I wish the SoCal housing market would crash. This would be a wake-up call for a lot of folks in SoCal!!!
Nicely said...your button is on my blog now!
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