Renting my Condo in January

Just an update on my situation as of November 2009.

I have been married a little over a year and I am currently taking Organic Chemistry and doing well. I am working two jobs still and have been slowly paying down debt.

My wife pretty much hates the condo because the location is 20 minutes away from her job, and her mom, and about 40 minutes away from her second job. We qualified for a 120,000 dollar mortgage, meaning we could keep ownership of the current condo and still be able to buy another 120,000 dollar home. In California or Florida that may sound like a joke but in Michigan 6 months ago that would have got you a lot of house.

The real estate market in Michigan is not working in my favor though as of right now. The problem involves the first time homebuyers credit. As a result of the credit all the good foreclosures are being fought over and are gone off the MLS in a week or two. It is not so much that the real estate market is recovering. It is just that people are looking for steals and deals and they fly off the market while the regular priced homes languish forever. We put a bid in on a house we loved and were outbid and we have not really found anything else that we like as much.

The Government just expanded the tax credit it to people who already own a home and want to buy another one.
Great!!? right??? I could just use the credit to buy another 120,000 house! and compete on equal ground with the first time home buyers!
WRONG!!! You have to own your home for 5 years, and I have only owned mine for 4 years! Talk about adding insult to injury.

My sisters lease expires in January and she agreed to lease my condo. Because we don't see any good deals right now in terms of housing, and I don't want to lose the ability to get a good renter I could trust I think I am going to rent a place 20 minutes south of here for the same price I am paying on my condo. I would simultaneously rent my old condo to my sister.

This allows me to have a tenant in my condo who I know will not destroy my place.
It makes my wife happy because she is in a location she likes much better.
And it allows me to buy some time for the first time homebuyers credit to expire and the second wave of option arms to hit possibly producing more foreclosures that I could snatch up at the end of 2010.




They say Patience is a virtue... Lets hope that stays true.

House Sales will Tank when Tax Credit Expires

The first time home buyer credit is about to expire, unfortunatly I am sure congress will extend it. If congress does let it die a natural death the net result will be a huge drop in demand for homes.

With winter coming up, which is a historically slow time in the housing market, combined with the tax credit ending I think we will see the real estate market worsen.

In Michigan, the prices have fallen back to affordable levels, the problem is that everyone is losing their job so no one can really afford what is a very great price.

Lets hope the government stays out of the mess and let the free market work its magic....I can still dream right?

GOLD TO DA MOON!

Back in January I wrote a post with some predictions for 2009. Almost all of them have came true exactly as I predicted or have come very, very close.

One of my predictions for 2009 was that gold would hit 1200 an ounce. Today it has soared over 1,000 and I don't think it is going to slow down just yet.

The price of gold has touched $1,000 an ounce for the first time in six months.

The move could be seen as a sign that investors believe the worst of the global recession is over and are worried about inflation.

Others who are less convinced about the strength of the recovery are moving into gold, which is usually sought as a haven from economic turmoil.

Caroline Hepker reports from New York.

I can only say one thing... "Gold to da moon Alice!"

I finally found out what happened to Miami Condo Fiasco.

A Condo Fiasco
Zack Preble auctions his contract for $355,000 condo in downtown Miami. The online reverse auction drops to $215,000 before he gives up. The developer takes his unit and the 70,000 deposit.


I guess not everything has a happy ending... If you are unfamiliar you can read my last article on this fascinating story here . It looks like Zack's last ditch effort, a reverse auction, failed. He could not even recover 5,000 dollars of his 70,000 dollar deposit and finally gave up turning his condo back over to the developer and forfeiting his $70,000 dollar deposit. That is a pretty expensive lesson to learn considering that amount of money would pay off the whole mortgage on my condo in Michigan, with enough left over for a years supply of beer.

The bright side is that it was only a contract with a developer so he still has his credit history in tact, and the $70,000 dollars came as profit from selling his first house during the boom. So it really was a case of easy come...easy go.

It is a shame he never made a final post on his blog Condofiasco.com, however, it is nice to finally see how this story ends.

Anyone been to the mall lately?

Talk about a total ghost town.

I never go to the mall, because I have been following the Dave Ramsey plan and getting out of debt. However, I did go last weekend because I really had a craving for a slice of Sbarro pizza. lol.

What really shocked me was just how many stores were closed. The Great Lakes Crossings mall in Auburn Hills, Michigan was once a pretty affluent area before Michigan's 20% unemployment rate started to transform SE Michigan into the post apocalyptic wasteland it is slowly becoming.

As I walked down the corridors I still saw a lot of people but about 1/3 of the stores were closed or covered up with paper. Even many of the restaurants in the food court were closed.

Once thing is for sure... When this economy does recover from the depression...SE Michigan will be one of the last places that comes out of it.

Its the price stupid...

Real estate used to be about location, location, location. Now it is about price, price, price.

NEW YORK (Reuters) - One in four U.S. homes for sale on August 1 had their prices marked down at least once since landing on the market, data compiled by real estate website Trulia.com showed on Friday.

A total of 24.4 percent of homes had their prices reduced in July, up from June's 23.6 percent. The average discount was 10 percent from the original price, or $40,173 of a median house value, Trulia.com said in its monthly price report obtained exclusively by Reuters prior to its release.

When will these home debtors get it? Your house is not worth what your neighbor sold his for in 2006. It is not worth what you paid for it in 2004, and it probably can't even sell for the amount needed to pay off your outstanding mortgage balance if you bought it in the last five years.

Welcome to the new reality folks. I paid $87,000 for my condo in 12/2005. Now it is worth about $47,000. In fact my whole 20% down payment has been eaten through and I am still underwater.

Buyers don't care what you paid during the bubble. They don't care that you have had your house staged, or that you have granite counter tops. They simply want a house for as cheap as possible and with foreclosures everywhere they will not be looking at your house until the stream of foreclosures has dried up which will not be anytime soon.

Its the price...stupid.

Google Maps now shows Foreclosures

Check it out!

It would be really interesting if Google could start making some headway into the real estate market and put Realtors out of business forever. Think what happened to travel agents after the internet became popular....I guess we can only hope...

House prices still falling...

I love the NAR. I love how they will try to make horrible news sound better in order to advance whatever agenda they have. House prices are falling, however, it is time to celebrate because they are falling at a much slower rate than last quarter!!!

The industry group's chief economist, Lawrence Yun, called the second-quarter sales figures, which are based on a survey of its members, "a hopeful sign for the economy" because sales were up compared with the first quarter.

This is as ridiculous as a doctor telling someone that they are still going to die from a horrible disease, but worry not, you are dying at a much slower rate then you were a few months ago. Somehow I have a hard time seeing the brighter side of that situation. Here are the numbers from Reuters...

*U.S. home values posted their 10th consecutive quarterly decline, falling to $186,500 on the Zillow Home Value Index.

*Home values in the first quarter had fallen by 12.4 percent from the prior-year.

*In the second quarter, 23 percent of all owners of single-family homes with mortgages were "underwater"

*Sales of previously foreclosed homes accounted for 22 percent of all home sales nationally in June

*Nationally, the number of home sales in June fell 23.7 percent versus a year earlier Regionally, price drops were sharpest in the West (-26.6 percent), followed by the South (-10.3 percent), the Northeast (-9.7 percent) and the Midwest (-8.6 percent).

Top 10 decliners, year-over-year
1. Cape Coral-Fort Myers, Fla., down 52.8 to $84,000

2. Las Vegas-Paradise, Nev., down 39.7 percent to $141,000

3. Riverside-San Bernardino-Ontario, Calif., down 39.1 percent to $161,000

4. Phoenix-Mesa-Scottsdale, Ariz., down 36.1 percent to $131,100

5. Sarasota-Bradenton-Venice, Fla., down 34 percent to $175,800

6. San Jose-Sunnyvale-Santa Clara, Calif., down 33.8 percent to $500,000

7. Orlando, Fla., down 33.2 percent to $149,200

8. Miami-Fort Lauderdale-Miami Beach, Fla., down 33.1 percent to $207,400

9. San Francisco-Oakland-Fremont, Calif., down 31 percent to $472,900

10. Saginaw-Saginaw Township North, Mich., down 30.6 percent to $55,700


Don't break out the champagne just yet... the housing crash is still not over.

The people who makes these video's really have a gift.

Its hard not to get filled with a lot of adreniline and maybe even a little bit of hope when you watch this.

PETER SCHIFF MONEY BOMB TODAY!!!!

How far will Americans be pushed before they fight back?

Stick with this video until the end... It gets better and better. A little out dated but the message rings true

What happened to those "Green Shoots" everyone was talking about?

Remember all that talk about the green shoots of a healthy, new economy that were sprouting this spring.




They turned out to be weeds.

I am now officially underwater!

So, I finally decided to give in and sell my house for what I owe.

For those who have not been reading this blog since the start I purchased a 1 bed/ 1 bath 890 sqaure foot condo with a detached garage for $89,000 dollars in January of 2006.

I put 20% down on a 6.5% 30 year fixed mortgage.

After the down payment and 3.5 years of mortage payments I owe about $66,500 on my home.

I figure even though it would be devestating to lose $22,500 dollars in life savings basically giving the house away for what I owe on it, my credit would be intact, and I would be able to get a much larger house at a steal from someone who was taking a much bigger loss.

The problem is when I went to realtor.com I am seeing 1200 sqaure foot 2 bed/2 bath condos selling for $67,000.

Even after putting 20% down and living in the house for 3.5 years of solid payments I am underwater!!!

There is no way I can possibly sell this place without damaging my credit, and damaging my credit would defeat the whole purpose of selling it because we want a bigger house.

It is a really sad situation because while this is a fine condo for a single person, I am married now and my wife would like a real house. We are trapped here and can't move on with the next stage of our lives.

The house crash has claimed another victim.

Fantastic Interview with Ron Paul

WHY ARE REPUBLICANS NOT SAYING THIS TO OBAMA!?!?

Credit Card Companies are slashing limits and Ruining Credit Scores

I am a good credit card customer. I have never missed a payment and always paid atleast my minimum payment no matter how bad my financial situation has been for almost 10 years now. You would think that credit card companies would appreciate me as a customer considering how many defaults have been taking place.

You thought wrong, I am getting the feeling that the card companies see me, and many other good customers, as defaults waiting to happen rather then the responsible customers we are.

American Express is the worst offender, they have slashed my limit twice and have been "chasing" me down as I pay off my card. It is kind of insulting that they would do this when I have given them no reason to suspect I would stop paying my bills.

I know that my credit score is much lower now simply because they have lowered my limit to just above my balance reducing my debt ratio and it pretty much sucks.

My opinion of American Express has really been adversly affected after this treatment and I really question what will happen to them in the future if they continue to treat their good customers this way.

Maybe Dave Ramsey was right after all.

Dead Cat Bounce?

A dead cat bounce is a figurative term used by traders in the finance industry to describe a pattern wherein a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement, with the connotation that the rise was not an indication of improving circumstances in the fundamentals of the stock. It is derived from the notion that "even a dead cat will bounce if it falls from a great height".

The New World Order is about to strike a blow to freedom: World Reserve Currency to be proposed @ G20

In this post back in December, I showed a video of Alex Jones interviewing Ron Paul about the NWO making a move to have a global currency and the inevitable loss of American Sovereignty.
The general consensus at the time was Alex Jones is a nut case and this would never happen:



Well friends...It really is happening and the evidence is right here:

At G20, Kremlin to Pitch New Currency
17 March 2009, Moscow Times Article:

The Kremlin published its priorities Monday for an upcoming meeting of the G20, calling for the creation of a supranational reserve currency to be issued by international institutions as part of a reform of the global financial system.

The International Monetary Fund should investigate the possible creation of a new reserve currency, widening the list of reserve currencies or using its already existing Special Drawing Rights, or SDRs, as a "superreserve currency accepted by the whole of the international community," the Kremlin said in a statement issued on its web site.

The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries.

The Kremlin has persistently criticized the dollar's status as the dominant global reserve currency and has lowered its own dollar holdings in the last few years. Both President Dmitry Medvedev and Prime Minister Vladimir Putin have repeatedly called for the ruble to be used as a regional reserve currency, although the idea has received little support outside of Russia.

...

The Kremlin document also called for national banks and international financial institutions to diversify their foreign currency reserves. It said the global financial system should be restructured to prevent future crises and proposed holding an international conference after the G20 summit to adopt conventions on a new global financial structure.

The Group of 20 industrialized and developing countries will meet in London on April 2.