Mortgage Loans

[Noah_Bodie]

There's a reason I'm having to look for a home that's a 30 mile commuter train ride away from work. It's also the reason why one cannot simply bury one's head and say, "But there's a subprime lending crisis. I cannot buy a home now."

WRONG!

You have to access your situation and the location you're considering. In some areas, now is the time to buy. In other areas, you might wanna wait a little longer to let that bubble burst or keep bursting.

http://seattletimes.nwsource.com/html/businesstechnology/2003878839_homesales11.html

That price, $501,000, was up 10.1 percent from last year's $455,000
...
A worker would have to earn $57 an hour — about $119,000 a year — to afford that Seattle home
...
on the Eastside, a worker needs to earn nearly $152,000 a year to afford a house with the $643,750 median price
...
The four-county Puget Sound area experienced a 5 percent increase in sales prices from last year
...
nationally, housing prices fell 3.2 percent between April and June

[noname1]

"There's a reason I'm having to look for a home that's a 30 mile commuter train ride away from work." Hey Noah, I think I may have some good news for you - later this month we will be running 2 additional Sound Transit commuters between Tacoma and Seattle, as well as another one Seattle - Everett. I dispatch that territory for BNSF.

[Noah_Bodie]

Much appreciated. One is a reverse, but more trains is better.

http://www.soundtransit.org/x2462.xml

[TheNewWorldMan]

This just goes to show the wisdom of that saying I read on some other site: "The future is here, it's just not widely distributed yet."

People with a geography-insensitive source of income who live in Seattle could play the bubble game...sell off when prices peak there, then buy into a market elsewhere where the bubble has burst, getting a larger home, or having $150,000 or so in cash left to invest elsewhere.

[Noah_Bodie]

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TheNewWorldMan wrote:
People with a geography-insensitive source of income who live in Seattle could play the bubble game...sell off when prices peak there, then buy into a market elsewhere where the bubble has burst, getting a larger home, or having $150,000 or so in cash left to invest elsewhere.

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I think Seattle, the city itself and not the surrounding suburbs as much, stands a really good chance of getting bubble bursted, sorta, to a degree that will lead to some sellers selling and not losing while some buyers buy and gain huge.

Here's my hypothesis.

Someone bought their home in the early 90s in Seattle for $120K. Home is today worth $500K. Buyer who bought it for $120K still owns it and is very wealthy, on paper.

Their home value "bursts" down to $375K. Owner frets about the loss and believe it's only going to fall further so they sell, "cut their losses", move out to the burbs or maybe to Iowa. They still walk away with a wheelbarrow of money.

Buyer of the home rents it or lives in it, and the bubble begins to reinflate which yields a handsome profit.

Now, this ain't gonna work for everyone. The person who bought their bungalow in Kirkland for $750K last year, which after a bubble burst might be worth only $550K, will be upside down in their loan and their choices are far less flexible. They could:

1) do a deed in lieu, or

2) they could just ride out the storm, stay in the home, stay in the loan (unless it's completely untenable)

I'm betting a bursted real estate bubble out here will yield the best and most plentiful deals in Seattle itself.

Real question is how mobile folks around here truly are. Seattle and it's burbs are home to some very snooty folks who land in a great school district or neighborhood and get pretty entrenched. I know a number of true locals who complain about the snootization of the Puget Sound area.

[rhinocl]

Burst bubbles are usually worst in suburbs. Check out the rubber band theory of RE.