Morning Market Buzz
Although delinquencies and foreclosures are still low by historic standards, there is increasing evidence that subprime borrowers are getting into more trouble as rates reset upwards. Housing counselors are helping people like Shirley Bird, 52, a janitor at a Chicago Police Department precinct, refinance her 12 percent variable loan with a 8 percent fixed-rate mortgage….
Although delinquencies and foreclosures are still low by historic standards, there is increasing evidence that subprime borrowers are getting into more trouble as rates reset upwards. Housing counselors are helping people like Shirley Bird, 52, a janitor at a Chicago Police Department precinct, refinance her 12 percent variable loan with a 8 percent fixed-rate mortgage.
Subprime Loans Going From Boon to Housing Bane [NY Times]
Official housing prices are not painting an accurate picture of the market, especially in formerly hot markets like Naples, Florida where a recent auction showed prices 25 percent below where they were a year ago. The big problem with the national stats? They don’t capture all the houses that are sitting on the market not moving because sellers won’t drop their prices.
The Hidden Truth About Home Prices [NY Times]
City Council Speaker Christine Quinn and Mayor Bloomberg last night settled on a tax-credit program that expands the neighborhoods where developers can get tax credits for building affordable apartments. Quinn will release the full details of the plan to the city council today. Bloomberg said the deal “”strikes the right balance towards maintaining a strong housing market while also providing increased funding for affordable housing.”
Deal on Housing Credits [NY Post]
“Lately, in our experience, not many people have been interested in Williamsburg,” says Shana Altstaetter, director of operations at HH Realty Group. “They’re more interested in areas farther out — Clinton Hill and Fort Greene.” [Metro]
Can anyone elaborate on what else is significantly driving the economy besides housing?
Proud to be a bridge and tunnel person!
Less bridge and tunnel crowds? I remember when WE (Brooklynites) were the bridge and tunnel crowd.
Well, Clinton Hill and Fort Greene are just different places than Williamsburg, Historical, kids friendly, more mixed, less pollution,less bridges snd tunnels crowds, Trees …….
More and more people are discovering Brooklyn – and Williamsburg is just plug ugly.
Also, to state the obvious – even if the underlying value of the asset was / is appreciating, if your cost of financing can keep going up, you are screwed. I had a HELOC to finance 10% of my house when I first bought and that piece was a ticking bomb. Fortunately, because of the appreciation of house, I was able to get everything rolled into a good rate fixed, but I did a little of a highwire act myself.
And Donatella, I’m not sure that it’s just that banks loaned to gullible, underinformed people. I heard an awful lot of “real estate always appreciates” and “housing prices have nowhere to go but up”, especially on this site. And if one of those gullible, underinformed people actually believed that and thought that somehow they were investing in a sure thing, you can’t really fault them for overextending themselves. Now that they owe more than their houses are worth and they can’t refinance, they’re really getting screwed.
That’s funny, I was just thinking “it will be an absolute bloodbath for the economy if real estate turns any sourer.”
I like how the second NY Times article says that one could be forgiven for thinking that the housing market was crashing. So glad to hear I’m forgiven.
I hate to be negative, and I’m sure there are a lot of smart people saying this is the bottom of the housing market, but I just don’t see it… The Dow is at an all time high, bonuses are up, and unemployment is low… It will be an absolute bloodbath in real estate if the economy really turns sour…