Calling the bottom!

[trying2makeabuc]

Enough Negativity. I am predicting we will hit the bottom of the market either this quarter or next! Definition -The total amount of totals sales of DSF homes will increase starting next qtr or the qtr after. That doesn't mean that house prices our at their lowest. Ex. If 3 homes sell in a qtr for $320 that's $960k in total sales. If next qtr 10 homes sell @ $300 each that is $3,000,000 in sales. And I am only talking about DSF homes. I think the condo market will take longer and the land market longer still.

Why? 1) prices are more realistic. After many months of lower prices and few sales, prices are acceptable- slightly above 2003 prices with a modest inflation rate. True vacationers think they can get a deal but aren't expecting a firesale 2) demand hasn't gone away, people are still renting like crazy here 3) the recession/ economy is only affecting certain segments. People have assessed their personal situations and have determined if they'll remain unscathed or not. I am seeing people look at making investments and other financial decisions 4) lower interest rates gets people thinking 5) I'm a contrarian - the negative news is so over the top it'll fade soon as a new news story takes over. It been taken account of in the US economy.

Let the arguing begin!

[BeachKing]

Random PM Thought: Once the market stops looking at a second home at the beach as an "Investment" and begins to look at it as a place to get away to, then and only then will market stop it’s bleeding.

[rapunzel]

We actually had a market bottom prediction thread a while back. Is anyone keeping track of it, because I'm feeling really confident about my prediction at this point.

[Hollibird]

I hope it happens soon. we have a lot in panama city and just want to break even at this point.

[TooFarTampa]

We actually had a market bottom prediction thread a while back. Is anyone keeping track of it, because I'm feeling really confident about my prediction at this point.

Feb. 2009

You also said:

"I just don't think one party or the other makes a whole lot of difference in the market. Everything ebbs and flows from administration to administration. After about eight years the excesses of either party begins to take it's toll. It seems to me the huge debt that is being run up right now with no sort of fiscal responsibility brings in its own set of issues for investment. I worked in a different industry, but always found that when one party was in control all protection went to employer groups and hospitals, and eventually the squeeze would be so tight on doctors and customers and the next party would come in, fix some problems and create others...then the pendulum would swing the other way.

"I just don't trust a lot of the economic numbers coming out right now. And I think that as long as we pretend there is not a problem when everyone can clearly see there are problems, then nothing will get done. Capital gains are hurt as much by an extremely weak dollar as higher taxes, are they not?"

:clap:

http://www.sowal.com/bb/showthread.php?t=9008&highlight=market+bottom+prediction

I never did stick my neck out and predict.

[Bobby J]

I think the bottom is when you see a piece of property you really like at a price you can afford... Afford to hold and enjoy! The investment will happen with time.

[hnooe]

Random PM Thought: Once the market stops looking at a second home at the beach as an "Investment" and begins to look at it as a place to get away to, then and only then will market stop it’s bleeding.

Right on...My friend from Atlanta is staying with me--he just read this thread--- and his comment was that too many people came down here and tried to win the lottery instead of just trying to enjoy a sacred and beautiful place.

[00seer00]

I see 2 more full points cut by July. This will put prime at 4% and you should be able to get home loans at a similar price. First time home buyers and mortgages for people with household income of less than 53K per year will be able to buy with little or no money down. Yes I know that affordable housing is not what SOWAL is known for but many of the people who own here make their living off of mortgage lending, construction, Real-estate sales, ect. You will be able to buy for what you can rent for if you stay in the 100k to 200k range. We are so blessed to have the Airport on the way because of its impact on the economy over the next 20 years. As far as a pricing bottom, many will be forced into selling on fear and desperation and that is heartbreaking to see, though some find joy in it. SOWAL is a amazing place and in time it will be discovered. I hear more and more of Hedge funds buying up REO’s controlled by Banks and people buying up foreclosures. Hopefully this summer will be the bottom but appreciation from the bottom will be a slow climb up.

00seer00

[dude]

just glad to hear the bottom is here!!! only one way to go now....well two if you count sideways. & i hope we do have a slow rise; we do not need the 2004-2005 mess ever, ever again! it was just unhealthy all the way around.

[Bobby J]

I predict in some areas we are going to go below real values. Once the mess gets cleaned up we will spike again in those areas. Just my opinion.

[flyforfun]

but appreciation from the bottom will be a slow climb up.

00seer00

Well, someone needs to tell Walton Co. tax appraisers office that cause I am still not happy my tax bills. You want see investors buying down there until you get a handle on the tax schedule. Taxes have decreased but its not enough. There use to be a time when you could pay cash for rental property, and make a decent return from rentals. "Not any more" thanks to high tax schedules and insurance. Until Walton County and the Florida legislature takes these two problems more seriously, its going to be an extremely slow climb up from the bottom if at all.

[fisher]

Well, someone needs to tell Walton Co. tax appraisers office that cause I am still not happy my tax bills. You want see investors buying down there until you get a handle on the tax schedule. Taxes have decreased but its not enough. There use to be a time when you could pay cash for rental property, and make a decent return from rentals. "Not any more" thanks to high tax schedules and insurance. Until Walton County and the Florida legislature takes these two problems more seriously, its going to be an extremely slow climb up from the bottom if at all.


You used to be much more bullish--what changed your opinion of the market?

[SHELLY]

I'll bite....(you know how to chum the waters :cool:)

Here is a thread from a year ago (Feb 2007) with some "upbeat" comments and, yes, talk of a "bottom." http://www.sowal.com/bb/showthread.php?t=11220&highlight=BOTTOM

We all know how 2007 turned out--so I ask you, what do you see that is different in this upcoming year as opposed to last year? The difference I see is there was no indication in early 2007 (for most people apparently--God knows I tried!) of the impending mortgage security meltdown; credit crunch; devaluation of the dollar; increasing unemployment; decreasing sales revenues; inflation and recession....:scratch: but then these issues going forward, in my estimation, would be a negative thing for real estate.


.

[Bobby J]

It seems sellers are slowly getting more realistic on prices. When the price gets right it will go under contract. There is always a buyer! The difference I see in 2008 versus 2007 is 2008 will be the clean up year. We are having sellers come to us to sell stuff no matter what the price is. A couple phone calls and the deal is done. Some sellers wants it off the books and do not care what it will take. Once this stuff is cleaned up, we may enter a normal market. I actually think we will go below the bottom and then have a small spike once folks realize we were at the bottom. Real estate is ever changing!

I have also noticed that some sellers are saying enough is enough and pulling from the market. They would rather not sell in this climate. Too many folks short selling or foreclosing to compete in this climate. We just have to go through this period.

[up4golf]

Afford to hold and enjoy!
bobby please forward that to the property appraiser's office

[SHELLY]

Once this stuff is cleaned up, we may enter a normal market.

"Normal" as to when all the Baby Boomers and Saudis blow into town with U-Hauls loaded with cash looking to purchase anything at any price....or "normal" as in "real estate normal?"---(not that many people actually know what that means.)

.

[Bobby J]

"Normal" as to when all the Baby Boomers and Saudis blow into town with U-Hauls loaded with cash looking to purchase anything at any price....or "normal" as in "real estate normal?"---(not that many people actually know what that means.)

.


Normal may have been a bad term. How about regular.

"The term regular can mean normal or obeying rules."

No mention of Baby boomers or Uhauls in that definition so I guess I mean Real estate Normal.

[Bobby J]

bobby please forward that to the property appraiser's office


I think they watch this site very closely. ;-)

[elgordoboy]

Normal may have been a bad term. How about regular.

"The term regular can mean normal or obeying rules."

No mention of Baby boomers or Uhauls in that definition so I guess I mean Real estate Normal.
RENAFU.

[Bobby J]

RENAFU.

Is that Like a DILLIGAF?

[SHELLY]

Normal may have been a bad term. How about regular.



Since we're discussing finding the bottom:

"Regular" as in "unconstipated."


.

[Bobby J]

Since we're discussing finding the bottom:

"Regular" as in "unconstipated."


.

You are not human! :lolabove:

[Joefromseagrove]

It looks to me that 2008 won't be the year that we hit the bottom,but when the bottom truly drops out of the market.
Just check out some of these stats:

Sowal in this example equals south of 98 along 30-a and the lovely neighborhood of Point Washington.

Sowal

# of homes,condos,and townhomes for sale = 1,645
# of homes,condos,and townhomes sold in 2007= 415
At this rate, it will take 3.9 years to sell what is currently advertised in the mls.:yikes:

#of residential lots for sale=1200
# of lots sold in 2007= 180
At this rate, it will take 6.7 years to sell the lots in mls.

In a traditional real estate market, a healthy inventory is about a 5% vacancy rate with a turnover every 6 months.

Walton County stats:


What about foreclosures?
Last year there were 721 foreclosures in Walton county. The first step to foreclosure is a lis pendens filed with the Clerk of Court.

In January of 2006, there were 20 lis pendens filed.
In January of 2007, there were 47 lis pendens filed.
January of 2008? 147 lis pendens were filed.

If the market keeps up like this, it appears Walton County will be headed towards a record 1800 foreclosures this year.

I get tired of people blaming the poor subprime borrowers for the mortgage mess. What do the upcoming foreclosures look like?

Remember, a lis pendens is a form that can be filed by a contractor,bank, of homeowner's association when a property owner has fallen behind on the payments.

Here is a snapshot of some of the properties that have entered this first stage of foreclosure in just the month of January 2008:

1 Sandprints condo
2 Windswept
1 Ariel dunes condo
1 bay club of Sandestin
1 Dunes of Seagrove
1 Frangista Beach townhome
13 lots in Old Seagrove
2 Beach side Villas Condo
1 Rosemary Beach
2 Grayton Cove
1 Majestic Sun
1 Botany Bayou
1 Gulf Pines
1 Preserve at Grayton
1 Lakeside at Blue Mountain
1 Magnolia cottages by the sea
1 old house in Seacrest
3 at Watercolor
1 at Edgewater beach
1 lot at Beach Highlands
2 at Summer's Edge
1 at Hammock Bay
2 at Maravilla Condo
1 at Emerald Hill
2 at Watersound
1 at Forest lakes
2 at Surfside Condo
1 at Preserve Place
1 at Adagio
1 at Magnolia Cottage
1 at Topsail Village
1 at Preserve at Grayton Beach
1 at Gulf View Heights
1 at Old Florida Village
1 at Cypress Dunes
1 at Luau in Sandestin
1 at Gulf Trace
1 at Magnolia Dune
1 at Melodia
1 at Hachee shores
1 at Cerulean Place (watercolor?)
1 at cypress breeze

These people are not subprime borrowers, they are people who have given up on there investments. If you went through the records like I did you might be shocked how many people you might know who are walking away.

Want to know what your property is worth?
Try finding comparables for your property from the year 2000 and add a modest 3% for each year to obtain a good asking price for your property but be prepared to compete with the HUGE inventory out there owned by banks and distressed and over extended buyers.

By the way, I am a licensed realtor in the State of Florida. "Now is a great time to buy!" Please excuse the typos:cool:

[SHELLY]

By the way, I am a licensed realtor in the State of Florida. "Now is a great time to buy!" Please excuse the typos:cool:


Thanks for the info Joe.

You're a licensed realtor and saying "Now is a great time to buy." :cool:

Would you be so bold as to share your "buyer's catch phrases" for each of the years 2004, 2005 and 2006?


.

[Joefromseagrove]

Thanks for the info Joe.

You're a licensed realtor and saying "Now is a great time to buy." :cool:

Would you be so bold as to share your "buyer's catch phrases" for each of the years 2004, 2005 and 2006?

.

I added that famous National Association of Realtors catchphrase in for a bit of humor. If you knew me you would know I'm not too keen on the NAR cool-aid.

[YoungFT]

I'm an eternal optimist but sometimes the news is just so damn depressing.

In announcing Project Lifeline today, a question was posed to Treasury Secretary Paulson, "Is the worst over?"

His response, "The worst is just beginning."

He was specifically referring to subprime mortgage resets. Read the whole thing here http://www.ft.com/cms/s/0/523f5bf0-d9a6-11dc-bd4d-0000779fd2ac.html

[SHELLY]

I'm an eternal optimist but sometimes the news is just so damn depressing.

In announcing Project Lifeline today, a question was posed to Treasury Secretary Paulson, "Is the worst over?"

His response, "The worst is just beginning."

He was specifically referring to subprime mortgage resets. Read the whole thing here http://www.ft.com/cms/s/0/523f5bf0-d9a6-11dc-bd4d-0000779fd2ac.html


I see he got my memo. :cool:


.

[SHELLY]

I added that famous National Association of Realtors catchphrase in for a bit of humor. If you knew me you would know I'm not too keen on the NAR cool-aid.

You mean you didn't believe this gem?

------------------------------------------------

January 10, 2007 - After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turnaround by summer, according to the latest forecast by the National Association of Realtors.

David Lereah, NAR's chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007. "We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation," he said. "We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it'll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward."
-----------------------------------------------

or this one?

------------------------------------------------


May 8, 2007 -“If it weren’t for a favorable economic backdrop, housing would probably have a hard landing,” said Lawrence Yun, NAR senior economist, in a statement. “As it is, we see this as a soft landing with home sales rising gradually in the second half of the year and prices recovering a bit later.”

------------------------------------------------

How can you call yourself a Realtor®??:confused:


.

[Joefromseagrove]

Shel,
I thought even you could understand that one can be a member of a group and not exactly follow the party line.:biggrin:

[SHELLY]

Shel,
I thought even you could understand that one can be a member of a group and not exactly follow the party line.:biggrin:


Is it kinda like being Dr.Bennell pretending to be a 'Pod Person' in Invasion of the Body Snatchers? :shock:


.

[elgordoboy]

:floor::lolabove:

[BrettMan]

So - I haven't posted here in a very long time - but I do recall a thread some time ago where people were calling the bottom - or at least the right time to buy again... and I said Feb 2009. I still stand by that, and plan to buy back in at that time. I bought a property at Rosemary in 2003, and sold it in a "fire sale" for over 150% of what similar lots are going for today. I did a 1031 into a few really boring (but solvent) rentals in Augusta, GA and I plan to sell those in the fall/winter of 2008 (do another 1031) and buy a condo on 30A in Feb 2009 per my plan. I hate to be right all the time.. but damn....

[SHELLY]

So - I haven't posted here in a very long time - but I do recall a thread some time ago where people were calling the bottom - or at least the right time to buy again... and I said Feb 2009. I hate to be right all the time.. but damn....

:confused:

:shock: Crap! Did I sleep through 2008? :blink:


.

[Bobby J]

:confused:

:shock: Crap! Did I sleep through 2008? :blink:


.

Where are you from? As much as I want you to go away, my life would not be the same without you! You are kind of like an addiction! :blink:

[fisher]

So - I haven't posted here in a very long time - but I do recall a thread some time ago where people were calling the bottom - or at least the right time to buy again... and I said Feb 2009. I still stand by that, and plan to buy back in at that time. I bought a property at Rosemary in 2003, and sold it in a "fire sale" for over 150% of what similar lots are going for today. I did a 1031 into a few really boring (but solvent) rentals in Augusta, GA and I plan to sell those in the fall/winter of 2008 (do another 1031) and buy a condo on 30A in Feb 2009 per my plan. I hate to be right all the time.. but damn....

Here was one of your quotes of another thread--

I bought in back in Jan and Feb at an average per share price of $70.11. Over 17% return in six months. Go Joe!!

I think Joe will go well over $100 per share even if land prices do fall as the speculators clear out. Most of the land they own is still on the books for their purchase price ($1-$2 PER ACRE!!!).


Given your knack for being right ;-), when does JOE hit $100?:yikes:

[elgordoboy]

Here was one of your quotes of another thread--

I bought in back in Jan and Feb at an average per share price of $70.11. Over 17% return in six months. Go Joe!!

I think Joe will go well over $100 per share even if land prices do fall as the speculators clear out. Most of the land they own is still on the books for their purchase price ($1-$2 PER ACRE!!!).


Given your knack for being right ;-), when does JOE hit $100?:yikes:
Doh!

[Busta Hustle]

Shelly would it be safe to say that most folks here couldn't grab their bottom with both hands?:biggrin:

[elgordoboy]

Shelly would it be safe to say that most folks here couldn't grab their bottom with both hands?:biggrin:
Maybe you could show us how...take a picture.

[quartz sand]

What are the banks doing through all this? Many have said they are not in the real estate business. But it is big money's business to 'know' whats going on (OK, I know that's flamebait).

I've heard that carrying written off real estate on a banks books impairs their ability (by impacting required reserve percentages) to write new loans. When is this impact greatest- only when the bank chooses to sell at a loss, or does it impact them if they continue to own/carry the real estate on their books at it's original value?

Right now, at least in the higher end of the Sowal market, it seems to me that the banks are choosing to keep the real estate on their books (at the value of the original loan) rather than selling for <90% MLS and writing it off. There may be accounting factors relating to which quarter the bank posts losses in, and there may also be regional/loan value variables in play. Any thoughts?

One way to see if I am right would be to look at Lis pendens/foreclosures over time (say Q307, Q407, Q108) to see how many are still bank owned, and of those that were sold and have closed how the sales price compared to the MLS listed price/prior sale? To really understand the data it would help if it were sliced up according to whether the property in question was middle or high end, by single family, condo, and land.

Has anyone on this board done this?

[Busta Hustle]

Are you trying to reach a conclusion as to what % below loan value banks are accepting on foreclosed properties?

[SSGA]

We've been looking at property in the area for a few months-online and in person and from what I've heard (rumors included), seen on listing sheets and personally experienced (we have a contract pending on the west end of PCB that is a foreclosure) it looks like banks are "offering" about a 35-40% discount on average from what is on their books. The bank had been owner of record for about 9 months. We offered 2002 pricing.

Just my observation, but I am not in the real estate business and definitely don't have a first row seat-besides the fact that I skipped all the business classes in college in favor of beer on the campus lawn ;-) so I'll have to defer the analyzing to others more qualified!

[Bobby J]

We've been looking at property in the area for a few months-online and in person and from what I've heard (rumors included), seen on listing sheets and personally experienced (we have a contract pending on the west end of PCB that is a foreclosure) it looks like banks are "offering" about a 35-40% discount on average from what is on their books. The bank had been owner of record for about 9 months. We offered 2002 pricing.

Just my observation, but I am not in the real estate business and definitely don't have a first row seat-besides the fact that I skipped all the business classes in college in favor of beer on the campus lawn ;-) so I'll have to defer the analyzing to others more qualified!


It seems to depend on how long they have had it. I think you can expect about 25 to 35% off foreclosure asking price once they have had it awhile. They seem to hold firm in the beginning. I know one thing for sure. We are as busy as we have been in 2 years. Our goal for the year was a contract a week. We have written one every day this week! The office is crazy.

[Busta Hustle]

expect a mini frenzy as we approach the half off season...:clap:

[SSGA]

I think BobbyJ is right-even from the people I know, there's more doing and less talking about doing. And, in the interest of full disclosure, I have to say that we are going to have do some cosmetic work and also furnish it. Could we have gotten a BETTER STEAL somewhere someday? Maybe, but the house works well for our requirements, we like the location, love the beach access and carrying the mortgage won't give us a hernia. So, we're going to be happy and frolic in the sand and surf. :D

[SHELLY]

I think BobbyJ is right-even from the people I know, there's more doing and less talking about doing. And, in the interest of full disclosure, I have to say that we are going to have do some cosmetic work and also furnish it. Could we have gotten a BETTER STEAL somewhere someday? Maybe, but the house works well for our requirements, we like the location, love the beach access and carrying the mortgage won't give us a hernia. So, we're going to be happy and frolic in the sand and surf. :D

So did the bank accept your 2002 offer?


.

[SSGA]

Yes, they did. However, it was certainly a hmmm...how to phrase this...."learning experience". :shock:

[SHELLY]

Yes, they did. However, it was certainly a hmmm...how to phrase this...."learning experience". :shock:

Please share.

.

[SSGA]

First let me say that I've been lurking on sowal for a couple of months and the fact that Shelly is responding to my posts makes me feel kinda flattered, kinda nervous. Whew, tread gently please, I'm new!

The bank was just a very nebulous presence...hard to pin down...hard to get answers and information. Getting to a contract stage was surprisingly painless--maybe it was a set-up, because actually getting someone-ANYONE-to sign off was like wrestling with an octopus.

[Bobby J]

They must have been down the line a bit. Did you close already?

[elgordoboy]

First let me say that I've been lurking on sowal for a couple of months and the fact that Shelly is responding to my posts makes me feel kinda flattered, kinda nervous. Whew, tread gently please, I'm new!

The bank was just a very nebulous presence...hard to pin down...hard to get answers and information. Getting to a contract stage was surprisingly painless--maybe it was a set-up, because actually getting someone-ANYONE-to sign off was like wrestling with an octopus.
I was at the Tom Thumb in Dune Allen a couple of weeks back and heard some people in the Cheez-Its section talking quietly. I overheard that Shelly has someone following him(her) at all times whispering in his(her) ear "You are but a (wo)man, you are but a (wo)man" :idontno: unsubstantiated rumor? history buff?

[Pirate]

I was at the Tom Thumb in Dune Allen a couple of weeks back and heard some people in the Cheez-Its section talking quietly. I overheard that Shelly has someone following him(her) at all times whispering in his(her) ear "You are but a (wo)man, you are but a (wo)man" :idontno: unsubstantiated rumor? history buff?

:lolabove::lolabove::lolabove::lolabove::lolabove: :lolabove:

[SHELLY]

I was at the Tom Thumb in Dune Allen a couple of weeks back and heard some people in the Cheez-Its section talking quietly. I overheard that Shelly has someone following him(her) at all times whispering in his(her) ear "You are but a (wo)man, you are but a (wo)man" :idontno: unsubstantiated rumor? history buff?

That would be Bobby J...he's been stalking me for quite some time.


.

[SHELLY]

First let me say that I've been lurking on sowal for a couple of months and the fact that Shelly is responding to my posts makes me feel kinda flattered, kinda nervous. Whew, tread gently please, I'm new!


Hi! :wave:

No need to be nervous...unless you're pushing Amway or Preconstruction Condos.

.

[SSGA]

I couldn't log on last night?

Big sigh of relief--no Amway and my bank actually told me that a)they wouldn't close on a condo without some serious scrutinization and no preconstruction at all and b)if they did close on a condo, they automatically take 5% off the top of the appraisal. Never heard of that one, but that's what they said when we were getting the prequalification letter.

We have not closed yet, scheduled for about 2 weeks. We do have a signed contract now, so maybe it really will happen.

What does "down the line" mean-is it real estate speak, sowal speak or do I just not get out enough? :idontno:

[Bobby J]

I couldn't log on last night?

Big sigh of relief--no Amway and my bank actually told me that a)they wouldn't close on a condo without some serious scrutinization and no preconstruction at all and b)if they did close on a condo, they automatically take 5% off the top of the appraisal. Never heard of that one, but that's what they said when we were getting the prequalification letter.

We have not closed yet, scheduled for about 2 weeks. We do have a signed contract now, so maybe it really will happen.

What does "down the line" mean-is it real estate speak, sowal speak or do I just not get out enough? :idontno:

"Down the Line" surfing lingo....:biggrin: It meant bank has held for awhile.

[Bobby J]

That would be Bobby J...he's been stalking me for quite some time.


.


You know you love it :wub:

[YoungFT]

If you believe that the current turmoil in the real estate market was caused by speculation fueled by lax lending standards, then you could conclude that the bottom will come as a result of the unwinding of these mortgages.

See the attached article...
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/03/ccview103.xml

Here's my logic for how this relates to Walton County,

Assume this trend is similar for Florida mortgages. If peak adjustment period is March, and foreclosure proceedings start 120-150 days delinquent (depends on the mortgage agreement - could be sooner), these Option ARM's will be pinching homeowners in the June - July timeframe.

But summer rental income may afford these homeowners some time. Once the peak rental months end, the homeowners will simply walk away.

As a side note, I crossed paths with an old acquaintance yesterday and she shared with me that she was inches away from losing her home because she couldn't afford the mortgage payment (sub-prime Option ARM). She suggested she'll simply pack up and go when the time comes because "everyone else seems to be doing it." Although it's a sample size of 1, I think this is reflective of an enormous shift in people's attitudes toward foreclosure. The stigma is gone.

Therefore, September - October 2008 might be a good time to start looking for opportunities. Cash will be king.

[30A Skunkape]

I wonder how long the ARM mess will linger. The foreclosure I am most familiar with (no, I am not being foreclosed upon) has an ARM that adjusts in 2012...well, it would have adjusted, anyway. I have no idea how common this flavor of mortgage was, but I guess it is possible that somebody might be able to scrape by for a few years then get whacked with an adjustment.

[30A Skunkape]

So can we count on an increasing number of ARM adjustments in the near future for the SOWAL jumbos?:creepy:

[SHELLY]

If you believe that the current turmoil in the real estate market was caused by speculation fueled by lax lending standards, then you could conclude that the bottom will come as a result of the unwinding of these mortgages.

See the attached article...
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/03/ccview103.xml

Here's my logic for how this relates to Walton County,

Assume this trend is similar for Florida mortgages. If peak adjustment period is March, and foreclosure proceedings start 120-150 days delinquent (depends on the mortgage agreement - could be sooner), these Option ARM's will be pinching homeowners in the June - July timeframe.

But summer rental income may afford these homeowners some time. Once the peak rental months end, the homeowners will simply walk away.

As a side note, I crossed paths with an old acquaintance yesterday and she shared with me that she was inches away from losing her home because she couldn't afford the mortgage payment (sub-prime Option ARM). She suggested she'll simply pack up and go when the time comes because "everyone else seems to be doing it." Although it's a sample size of 1, I think this is reflective of an enormous shift in people's attitudes toward foreclosure. The stigma is gone.

Therefore, September - October 2008 might be a good time to start looking for opportunities. Cash will be king.

Another monkey wrench was thrown into the system today with Fanny & Freddie essentially ending the era of "The Drive-By Appraisal." :clap:

"Seeking to head off the threat of lawsuits from Mr. Cuomo, the two government-sponsored providers of funding for mortgage loans agreed to a code of conduct due to take effect next Jan. 1. Because Fannie and Freddie are the dominant sources of funds for home loans, the code will become an effective standard for the industry.

The code bars lenders and their representatives from pressuring appraisers to supply inflated estimates of property values, which are widely viewed as an important contributor to the mortgage crisis. Appraisers have long complained that they risked losing business if they didn't appraise homes at values that would allow loans to be made.

Bank employees who are involved in making loans won't be allowed to choose appraisers. And lenders won't be able to make loans on the basis of appraisals from their own employees or from other companies they control.

The code also bars lenders from using appraisals ordered by mortgage brokers. The National Association of Mortgage Brokers said that rule could drive many brokers out of business. Officials of the trade group said appraisals ordered by brokers sometimes can be used for more than one potential lender, giving the consumer more flexibility. Under the new code, they said, consumers who use brokers might end up paying for two appraisals. Mr. Cuomo said he didn't believe the code would hurt brokers who follow "legitimate" practices.:cool:

http://online.wsj.com/article/SB120456185094007821.html?mod=googlenews_wsj

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One surely might want to start "looking" after hurricane season, but it would be better to hold off on 'buying' until after a more honest appraisal system is put in place.

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