One Homeowner's Burden Is Another's Bargain

Home prices are sinking. Banks are seizing properties from owners who can't pay their mortgages. Yet for Amber Gilmore, the miserable housing market has never looked better.

After searching for a home for more than a year, Gilmore and her fiancé found one in foreclosure. Once the bank cut the asking price by more than $100,000, the first-time home buyers eagerly sealed the deal for $230,000.

In about a month, the couple will move into the two-bedroom house in Chicago with a small fenced yard and garage. The previous owners invested in gleaming granite countertops and hardwood floors. Their loss, Gilmore says, is her gain.

Read the whole story here.

Comments

[CharltonHestonsGUN]

You Americans should read this link.

Greatest Nation on Earth??? I don't think so.

http://news.bbc.co.uk/2/hi/americas/7297093.stm

[Tellurider]

Don't be fooled.
To reach a sustainable economic equilibrium the whole home market needs to fall 30% to 50%.
We aren't there yet.
The real price of homes is inexorably tied to wages.
We've been living beyond our means.
The standard formula that a homeowner cannot pay more than 30% of take-home pay for a mortgage is really unassailable.
The more interesting fact is that when all of our homes have fallen 30% to 50% from the high point they reached about two years ago--70% of us will be upside-down on our mortgage.
Band-aids, hoopla and bull are not going to fix this problem.
It is really all about economics.

[EinChicago]

"The standard formula that a homeowner cannot pay more than 30% of take-home pay for a mortgage is really unassailable."

I think you mean the standard formula that a homeowner cannot pay more than 30% of take-home pay for a mortgage is really moronic and overly simplified. Did that formula hold true when interest rates were at 9% what about at 4% or 12%? The sma emortgage was hundreds of dollars different depending on the rate.

[FreedomCorpse]

I wonder if happy gilmore and his fiance will be happy when they find out next year they could have picked up the same place for $60k to $70k less than they paid today?

[MilwaukeeDan]

The term "homeowner" is missused unless your house is paid for. You are a "homedebtor" or "homerenter" until you pay for it, even then, you have to pay property taxes. "Homeowners" is a feel good term used by banks and the govenment.

[drkazmd65]

true Dan - I always like to say that my wife and I just have 'First Right to pay the bank' for our house.

You don't own the house until at least all you owe annually is the property taxes. My parents, and my wife's father are the only two sets of people that I know that 'own' their houses outright.

The rest of us are just glorified renters.

[CharltonHestonsGUN]

Good one,Dan............I have been saying that for years when people tell me they own their home.

Many people will never be able to pay off the mortgage in this lifetime.

Its good for a tax break but then again you have to pay property taxes.

I bought my house CASH (200k Euros) because I worked in Libya for 2 years tax free and saved everything.

Its a great feeling to have a house and hold the deed.

[MilwaukeeDan]

This article exposes what vultures real estate agents are. As for those who think they are getting great deals now, if this economy keeps going like it is, you're still going to take one in the kazzoo. Optimistic economists think there will be a recovery in home prices in several years. Things will bottom out, how do they know? These are the same guys that stated "there was almost no chance for a recession this year". Americans are tapped out, Europeans with money are not interested in purchasing a vacation home in Milwaukee and the median income for the middle class has stayed the same since 1999, while prices for just about everything have doubled. We are also running out of credit. The big housing boom was created by loaning money to anyone with a pulse. Now you have millions of homes and no one to sell them to. We could afford a nice house in Florida, but well paying jobs there are non-existant and insurance is sky high. You don't need bargains(that's how we were sold on the outsourcing fiasco) you need a real economy, with real jobs that pay well enough to afford homes without fudging numbers.

[ErnestineBass]

Hear! Hear! Well said, Dan.

Companies like KMart and WalMart continue to cannibalize their consumer base.

Dumb. Really, really dumb.

[EinChicago]

You're right! Prices have never bnounced back... why look at 1991.... prices never went up again after that!.

[ImmanuelGoldstein]

And where do you think the credit for another housing bubble is going to come from?

[dadw5boys]

IF INVESTORS WERE BUYING THEN THE F H A WOULD NOT NEED TO BE EXTENDED WITH ABILITES TO HELP THE MARKET.

THE TALE OF INVESTORS PICKING UP RENTAL PROPERTY IS FAR AND FEW BETWEEN.

THIS IS SPIN TO HELP REALESTATE AGENTS MOVE BUILDINGS. LIES AND SPIN TO STOP THE BLEEDING.

[drkazmd65]

Well put dadw5,... despite the Caps lock,

The only people that should be in the market now are those that actually can either afford a fixed-rate 30-year mortgage for some place they are planning on living in for at least 5 years (preferably 10+), or those that can pony up cash up front and afford to sit on the property until that day (perhaps years off) where they can turn a profit on the investment.

It is going to get worse for the forseeable future before it gets better - and anybody that tells you they 'know' when it will bottom out is full of shinola.

[EinChicago]

Or when it already bottomed out.