Comments on: Genuine but Misguided: Parade of Affordable Homes http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/ News & discussion about real estate & the housing bubble in the Seattle area. Sat, 21 Nov 2009 10:02:55 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: Ravenor http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15815 Ravenor Thu, 31 May 2007 19:32:31 +0000 http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15815 Elua, you are correct that the recent price run-up has in large part been due to buyers using foolish loans such as the teaser-rate ARM's and the negative amortization loans. So when the ARM's adjust and the negative amortization gets too big, we should see a lot of these homes come back on the market as short-sales or foreclosure sales...which should push prices down. The dual-income phenomenon has been around for a long time; started at least in the 1970's.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('15815','Ravenor',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('15815','Ravenor','Elua, you are correct that the recent price run-up has in large part been due to buyers using foolish loans such as the teaser-rate ARM\'s and the negative amortization loans. So when the ARM\'s adjust and the negative amortization gets too big, we should see a lot of these homes come back on the market as short-sales or foreclosure sales...which should push prices down. \r\n\r\nThe dual-income phenomenon has been around for a long time; started at least in the 1970\'s.',''); return false;">Quote</a></div> Elua, you are correct that the recent price run-up has in large part been due to buyers using foolish loans such as the teaser-rate ARM’s and the negative amortization loans. So when the ARM’s adjust and the negative amortization gets too big, we should see a lot of these homes come back on the market as short-sales or foreclosure sales…which should push prices down.

The dual-income phenomenon has been around for a long time; started at least in the 1970’s.

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]]> By: Eleua http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15811 Eleua Thu, 31 May 2007 15:54:06 +0000 http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15811 <i>When considering affordability, you have to factor in the reality that in most households both parents work. Assuming that both parents earn around $45k per year which is around the median for white-collar work in Seattle, that pencils out to $90k gross income. That makes the $350k asking prices not that far out of line for a single family detached home. </i> Ask yourself...is that $90K/household common among "first time" home buyers? How old is the dual income phenomenon? I'm pushing 40, and I can not ever remember a time where the standard homeowner wasn't a dual income earner. If that is true, why is it just the last 4 years we have seen this epic runup? KPOM is correct. Neg-am suicide loans are needed to make this idea work. That is unsustainable - even in Seattle.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('15811','Eleua',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('15811','Eleua','<i>When considering affordability, you have to factor in the reality that in most households both parents work. Assuming that both parents earn around $45k per year which is around the median for white-collar work in Seattle, that pencils out to $90k gross income. That makes the $350k asking prices not that far out of line for a single family detached home. <\/i>\r\n\r\nAsk yourself...is that $90K\/household common among \"first time\" home buyers? How old is the dual income phenomenon?\r\n\r\nI\'m pushing 40, and I can not ever remember a time where the standard homeowner wasn\'t a dual income earner. If that is true, why is it just the last 4 years we have seen this epic runup?\r\n\r\nKPOM is correct. Neg-am suicide loans are needed to make this idea work. That is unsustainable - even in Seattle.',''); return false;">Quote</a></div> When considering affordability, you have to factor in the reality that in most households both parents work. Assuming that both parents earn around $45k per year which is around the median for white-collar work in Seattle, that pencils out to $90k gross income. That makes the $350k asking prices not that far out of line for a single family detached home.

Ask yourself…is that $90K/household common among “first time” home buyers? How old is the dual income phenomenon?

I’m pushing 40, and I can not ever remember a time where the standard homeowner wasn’t a dual income earner. If that is true, why is it just the last 4 years we have seen this epic runup?

KPOM is correct. Neg-am suicide loans are needed to make this idea work. That is unsustainable – even in Seattle.

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]]> By: Denny Retrograde http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15807 Denny Retrograde Wed, 30 May 2007 23:13:35 +0000 http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15807 What a find! The "Washington Homeownership Center" has a website, which if you dig a little yields the following Board of Directors. See if you can spot the industry lean here: - Janice Navarre, President, Department of Community, Trade and Economic Development - Leigh Bezezekoff, Vice President and Secretary, HomeStreet Bank - Randy Robinson, Fannie Mae - Kim Toskey, Eagle Home Mortgage - Mia Vermillion, Countrywide Home Loans - Amanda Apodaca, Peak Systems - Karla Lynch, ENSO - Paula Benson, Freddie Mac - Jim Boudreau, First Mutual - Anna Landa, Community Voice Mail - Jane Bloom, Parkview Services - Bob Wold, Windermere - Ryan Maxwell, HomeStreet Bank Their "supporters" page lists twenty real estate & bank companies, HUD, and the Seattle Foundation.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('15807','Denny Retrograde',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('15807','Denny Retrograde','What a find! The \"Washington Homeownership Center\" has a website, which if you dig a little yields the following Board of Directors. See if you can spot the industry lean here:\r\n- Janice Navarre, President, Department of Community, Trade and Economic Development\r\n- Leigh Bezezekoff, Vice President and Secretary, HomeStreet Bank\r\n- Randy Robinson, Fannie Mae\r\n- Kim Toskey, Eagle Home Mortgage\r\n- Mia Vermillion, Countrywide Home Loans\r\n- Amanda Apodaca, Peak Systems\r\n- Karla Lynch, ENSO\r\n- Paula Benson, Freddie Mac\r\n- Jim Boudreau, First Mutual\r\n- Anna Landa, Community Voice Mail\r\n- Jane Bloom, Parkview Services\r\n- Bob Wold, Windermere\r\n- Ryan Maxwell, HomeStreet Bank\r\nTheir \"supporters\" page lists twenty real estate & bank companies, HUD, and the Seattle Foundation.',''); return false;">Quote</a></div> What a find! The “Washington Homeownership Center” has a website, which if you dig a little yields the following Board of Directors. See if you can spot the industry lean here:
- Janice Navarre, President, Department of Community, Trade and Economic Development
- Leigh Bezezekoff, Vice President and Secretary, HomeStreet Bank
- Randy Robinson, Fannie Mae
- Kim Toskey, Eagle Home Mortgage
- Mia Vermillion, Countrywide Home Loans
- Amanda Apodaca, Peak Systems
- Karla Lynch, ENSO
- Paula Benson, Freddie Mac
- Jim Boudreau, First Mutual
- Anna Landa, Community Voice Mail
- Jane Bloom, Parkview Services
- Bob Wold, Windermere
- Ryan Maxwell, HomeStreet Bank
Their “supporters” page lists twenty real estate & bank companies, HUD, and the Seattle Foundation.
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]]> By: kpom http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15805 kpom Wed, 30 May 2007 22:57:15 +0000 http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15805 Median income for a **household** in King County is 57K. Obviously, a lot of couples do better than that, but the idea that a $350K "starter home" is affordable with conservative financing to "lower-income, first-time homebuyers" is ludcrious. The only way they can "afford" that is with a neg-am suicide loan.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('15805','kpom',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('15805','kpom','Median income for a **household** in King County is 57K. Obviously, a lot of couples do better than that, but the idea that a $350K \"starter home\" is affordable with conservative financing to \"lower-income, first-time homebuyers\" is ludcrious. The only way they can \"afford\" that is with a neg-am suicide loan.',''); return false;">Quote</a></div> Median income for a **household** in King County is 57K. Obviously, a lot of couples do better than that, but the idea that a $350K “starter home” is affordable with conservative financing to “lower-income, first-time homebuyers” is ludcrious. The only way they can “afford” that is with a neg-am suicide loan.
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]]> By: Chris http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15804 Chris Wed, 30 May 2007 22:47:18 +0000 http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15804 That line of reasoning may work over the short term, but over longer terms economic theory suggest new entrants with emerge to undercut prices back to a rational economic profit, based upon construction prices + "x" margin. The problem with affordability is that costs have out paced gains in income in real terms. Costs created prices that drove the need for two-income households (or relative lack of income), not the other way around. FYI - Homesight is an affordable for sale housing group you might want to look into.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('15804','Chris',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('15804','Chris','That line of reasoning may work over the short term, but over longer terms economic theory suggest new entrants with emerge to undercut prices back to a rational economic profit, based upon construction prices + \"x\" margin. The problem with affordability is that costs have out paced gains in income in real terms. Costs created prices that drove the need for two-income households (or relative lack of income), not the other way around. \r\n\r\nFYI - Homesight is an affordable for sale housing group you might want to look into.',''); return false;">Quote</a></div> That line of reasoning may work over the short term, but over longer terms economic theory suggest new entrants with emerge to undercut prices back to a rational economic profit, based upon construction prices + “x” margin. The problem with affordability is that costs have out paced gains in income in real terms. Costs created prices that drove the need for two-income households (or relative lack of income), not the other way around.

FYI – Homesight is an affordable for sale housing group you might want to look into.

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]]> By: Ravenor http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15803 Ravenor Wed, 30 May 2007 21:48:01 +0000 http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15803 When considering affordability, you have to factor in the reality that in most households both parents work. Assuming that both parents earn around $45k per year which is around the median for white-collar work in Seattle, that pencils out to $90k gross income. That makes the $350k asking prices not that far out of line for a single family detached home. If the income-earners make less than the $45k each, townhomes/condos are what they will have to accept. Ironically, one of the key drivers of home price inflation has been the trend throughout the country towards both parents in a home working. A big chunk of the additional income that resulted from the shift to single-income to double-income families went into housing; initially homebuyers were able to buy a lot more house, but as households jumped on the double-income bandwagon that drove prices up as builders realized they could raise prices without increasing house size further. Now, first-move-up homes are out of reach unless a household has two median incomes.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('15803','Ravenor',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('15803','Ravenor','When considering affordability, you have to factor in the reality that in most households both parents work. Assuming that both parents earn around $45k per year which is around the median for white-collar work in Seattle, that pencils out to $90k gross income. That makes the $350k asking prices not that far out of line for a single family detached home. \r\n\r\nIf the income-earners make less than the $45k each, townhomes\/condos are what they will have to accept. Ironically, one of the key drivers of home price inflation has been the trend throughout the country towards both parents in a home working. A big chunk of the additional income that resulted from the shift to single-income to double-income families went into housing; initially homebuyers were able to buy a lot more house, but as households jumped on the double-income bandwagon that drove prices up as builders realized they could raise prices without increasing house size further. Now, first-move-up homes are out of reach unless a household has two median incomes.',''); return false;">Quote</a></div> When considering affordability, you have to factor in the reality that in most households both parents work. Assuming that both parents earn around $45k per year which is around the median for white-collar work in Seattle, that pencils out to $90k gross income. That makes the $350k asking prices not that far out of line for a single family detached home.

If the income-earners make less than the $45k each, townhomes/condos are what they will have to accept. Ironically, one of the key drivers of home price inflation has been the trend throughout the country towards both parents in a home working. A big chunk of the additional income that resulted from the shift to single-income to double-income families went into housing; initially homebuyers were able to buy a lot more house, but as households jumped on the double-income bandwagon that drove prices up as builders realized they could raise prices without increasing house size further. Now, first-move-up homes are out of reach unless a household has two median incomes.

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]]> By: deejayoh http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15802 deejayoh Wed, 30 May 2007 21:19:08 +0000 http://seattlebubble.com/blog/2007/05/30/genuine-but-misguided-parade-of-affordable-homes/#comment-15802 Question: How can home ownership be at an all time high, yet the press is reporting that rental vacancy rates are decreasing - when we know that we are adding to our housung stock faster than our population is growing? any votes for a whole lot of vacant infestor-owned units out there?<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('15802','deejayoh',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('15802','deejayoh','Question:\r\nHow can home ownership be at an all time high, yet the press is reporting that rental vacancy rates are decreasing - when we know that we are adding to our housung stock faster than our population is growing?\r\n\r\nany votes for a whole lot of vacant infestor-owned units out there?',''); return false;">Quote</a></div> Question:
How can home ownership be at an all time high, yet the press is reporting that rental vacancy rates are decreasing – when we know that we are adding to our housung stock faster than our population is growing?

any votes for a whole lot of vacant infestor-owned units out there?

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